Grand Theft Auto I : How Your Car Insurance Premiums are Affected

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Grand Theft AutoIt seems hard to believe, but every 39.7 seconds a vehicle is stolen in the U.S. according to the Federal Bureau of Investigation’s Uniform Crime Report for 2009 (the latest national statistics available).   This adds up to nearly $5.2 billion dollars per year, and contributes substantially to high car insurance premiums, particularly in urban and other high risk areas.

You’d think that with all of the anti-theft systems, devices, and tracking technology available on modern cars, stealing a car (or breaking into one) would be a high-risk crime for a thief.   After all, who hasn’t been woken up in the middle of the night by a car alarm blaring somewhere in the neighborhood?   If you think about it though, how many of these car alarms did you actually phone into police?   Probably none.   Sadly, most people view car alarms with more annoyance than concern.

Theft Impacts Car Insurance Premiums – Directly and Indirectly

While vehicle theft and break-in statistics have consistently declined over the past 10 years, the fact remains that car theft is one of the leading reasons for high car insurance premiums.   If your vehicle is stolen, the crime will probably directly affect your car insurance premiums at renewal time.   Filing a claim on your insurance, regardless of the reason for the claim, will most likely cause your annual premium to increase.

But even if your car is never stolen, vehicle theft has an impact on your auto insurance premiums, simply because the risk of theft is spread among all policy holders of any individual insurance company, and particularly those who live in high risk areas.

Theft Coverage

Theft coverage is typically provided by a policy’s comprehensive coverage.   But realistically, not everyone carries this optional coverage.   Many people elect to reduce their car insurance premiums by dropping comprehensive, especially if the car is not financed.   When considering whether or not to carry this coverage, you should inquire about car theft rates in your area to assess your risk, and also think about whether or not you could afford to replace the car out of your own pocket if it was ever stolen.

The recovery rate for stolen vehicles is actually rising due to technology innovations, but no one can count on their stolen car being returned, at least in one piece.   So, when looking for ways to reduce your car insurance premiums, consider increasing the deductible on your comprehensive coverage before you drop it entirely.   You may find that a $1,500 deductible substantially reduces the cost of this coverage, while still giving you peace of mind that you can replace the car if it’s stolen.