Do Cars With Remote Shutdown Systems Cost Less to Insure?
Last Updated on May 17, 2022
If your car has a remote shutdown system, then it’s harder to steal. That could mean cheaper insurance.
Many insurance companies offer discounts for remote shutdown systems like OnStar. These systems are proven to aid vehicle recovery, increasing the chances of recovering your vehicle after theft.
How much money can you save with remote shutdown systems? How do remote shutdown system discounts work? Keep reading to discover everything you need to know about insuring a car with a remote shutdown system.
Yes, Remote Shutdown Systems Lead to Cheaper Insurance
Having a remote shutdown system could lead to cheaper insurance premiums. Today, many insurers offer discounts for using remote shutdown systems.
The average car insurance company offers discounts of 10% to 25% on comprehensive coverage for using a remote shutdown system like OnStar.
Remote shutdown systems are a type of anti-theft device. Like other anti-theft devices, they deter theft. Remote shutdown systems allow law enforcement to safely turn off your vehicle without direct access to the vehicle, increasing the chance of vehicle recovery.
If you have a remote shutdown system, then your insurer should charge lower rates on comprehensive coverage, which is the type of car insurance that covers vehicle theft. You could save anywhere from 3% to 25% on comprehensive coverage for driving a vehicle with a remote shutdown system.
Why Insurers Offer a Discount
Insurance is all about risk. When your vehicle is less risky to insure, you’ll pay less for car insurance.
When a vehicle is stolen, your insurer needs to compensate you for the full value of the vehicle (assuming you have comprehensive coverage).
If police recover your vehicle, however, then the insurer does not need to compensate you for the full value of your vehicle. In fact, if there’s no damage to your vehicle, then your insurer may pay nothing for the theft.
A remote shutdown system increases the chances of a speedy vehicle recovery. Instead of having your insurer pay, say, $20,000 to compensate you for the lost value of your vehicle, your insurer could pay just $1,000 to repair the broken window of your car after vehicle theft.
How Much Can You Save with Remote Shutdown Discounts?
Remote shutdown discounts can help you save anywhere from 3% to 25% on car insurance.
Some insurers apply this discount to your full insurance premium. Others apply it only to comprehensive coverage.
Depending on how much you pay for car insurance, you could save anywhere from $100 to $500 per year by carrying a remote shutdown system on your vehicle.
- GEICO offers discounts of up to 25% for anti-theft devices, including remote shutdown systems, GPS monitoring, and other anti-theft systems
- Most insurers offer discounts between 3% and 15% according to the type of anti-theft device
- A remote shutdown system is considered an advanced anti-theft device, which means it will lead to the largest discounts (typically 15% to 25%)
- As anti-theft devices become more common, insurers are reducing their discounts
- Some insurers stack anti-theft discounts, allowing you to maximize savings by carrying multiple anti-theft devices (like a remote shutdown system and GPS monitoring)
Because this discount only applies to your comprehensive coverage, you may save less than you think. Instead of saving 25% on your entire $1,500 premium, for example, you might save 25% on your $500 comprehensive coverage premium, or around $100 per year. By comparing quotes and shopping around with different insurers, you can find an insurer that provides the best possible remote shutdown discount.
Types of Remote Shutdown Systems
There are multiple types of anti-theft systems, including remote shutdown systems, passive and active alarms, VIN etching, and GPS monitoring. There are also multiple types of remote shutdown systems.
The two best-known remote shutdown systems are OnStar and LoJack. Both systems can remotely shut down a vehicle after it has been stolen.
OnStar: OnStar is a subsidiary of General Motors. With OnStar, drivers get several in-vehicle services, including a cellular connection, an emergency services button, advanced diagnostics, and a remote shutdown system. OnStar subscribers pay a monthly fee for the service. At the basic Connected Vehicle tier, you get remote access, vehicle GPS monitoring, and advanced diagnostics. At the Premium tier, drivers get automatic crash response, emergency services, crisis assist, roadside assistance, stolen vehicle assistance, and turn-by-turn navigation. If the police have verified that your vehicle has been stolen, then an OnStar representative could send a command to the vehicle’s OBD-II system slowing down the vehicle and aiding recovery. Some vehicles also allow OnStar to remotely disable the ignition system, making it easier to recover the vehicle.
LoJack: LoJack is the only system that works directly with the police to help you recover a stolen vehicle. When a vehicle is stolen, LoJack silently leads police to your vehicle’s location. Your LoJack system emits a uniquely coded signal to the police network in your area. Police can use LoJack to track the location of your vehicle. LoJack even works where GPS does not work, using radio waves instead of GPS to monitor the location of your vehicle. Although LoJack does not have remote vehicle shutdown, it can significantly increase the chances of recovering your vehicle after theft.
Other Remote Shutdown Systems: The global remote vehicle shutdown market is valued at around $400 million. A growing number of dealerships and lenders now use remote shutdown systems to make it easier to recover stolen vehicles. Some cars include remote shutdown functionality in the base model. If your car has a remote shutdown system (or any anti-theft device), then you should pay less for car insurance.
Generally, drivers with OnStar or LoJack save more on car insurance than drivers with other types of anti-theft systems. You could save 15% to 25% with OnStar or LoJack, for example, while your insurer provides a discount of just 1% to 5% for other anti-theft systems (like VIN etching).
The Discount Only Applies to Comprehensive Coverage
Car insurance does not automatically cover vehicle theft. Car insurance only covers theft if you have comprehensive coverage, which is optional in all states. If you have a remote shutdown system, then your discount only applies to your comprehensive coverage.
Here are the main components of car insurance:
Liability Insurance: Required in virtually every state, liability insurance covers damage you cause to other people, property, and vehicles.
Collision Coverage: Optional in all states, collision coverage covers the cost of repairing your own vehicle after a collision.
Comprehensive Coverage: Optional in all states, comprehensive coverage covers damage that occurs to your vehicle outside of accidents, including storm damage, vandalism, fire damage, and vehicle theft.
Let’s say you pay $1,500 per year for full coverage car insurance (which includes liability, collision, and comprehensive coverage). Roughly half may cover liability insurance, while the remaining half covers collision and comprehensive coverage.
Your remote shutdown system might give you a discount of 15% to 25%. However, because this discount only applies to comprehensive coverage, you may end up saving less per year than you realized.
Compare Quotes to Find the Best Insurer
OnStar and other remote shutdown systems are an investment in your safety. Some insurers reward you for making that investment, while others do not.
GEICO and several other major insurers offer steep discounts for remote shutdown systems. Some insurers, however, offer no discounts whatsoever.
By comparing quotes, you can find the best insurance company for your remote shutdown system.
Final Word – Remote Shutdown System Discounts
Cars with remote shutdown systems cost less to insure. Many insurers provide discounts on vehicles with remote shutdown systems.
If you have installed a remote shutdown system like OnStar in your vehicle, then contact your insurer to save money on car insurance. Some insurers offer discounts of 15% to 25% for using remote shutdown systems, helping you save hundreds per year on car insurance.