Fewer Mich. Thefts Don’t Necessarily Mean Auto Insurance Price Cut

02/03/2012 // Lansing, Michigan, USA // [email protected] // Online Auto Insurance

Data recently released by the Michigan Auto Theft Prevention Authority (ATPA) showing that significantly fewer cars are being stolen in the state is good news for car owners, but it doesn’t necessarily mean they’ll be seeing savings when they go to renew coverage, according to Online Auto Insurance.

The ATPA recently reported that statewide volume of car thefts in 2010 represented a drop of nearly 10 percent from 2009 and of more than 50 percent from 2000.

Because insurers’ pricing practices are heavily influenced by loss history, some might be expecting a drop in prices for comprehensive coverage, the only type that provides protection against theft. But comprehensive auto insurance quotes for Michigan policyholders are affected by much more than the statewide theft rate.

First of all: Insurers look at the theft rate that is represented in their own claims numbers rather than in those produced by government sources. While statewide drops are likely to be a positive development for most insurers in the state, it will benefit some more than others. And that will affect whether, and how much, companies adjust their rates.

Second: Insurers break their statewide claims data up into much smaller, more digestible parts. According to the ATPA data, Dearborn Heights saw a 50 percent decline in thefts between 2004 and 2010, but Farmington Hills saw a decline of only 7 percent. If that were a car insurance company’s claims data and not ATPA data, the insurer might reduce rates in Dearborn Heights but keep them relatively stable in Farmington Hills.

Third: Some types of cars get stolen often, while some are seldom stolen. And some cars cost more to replace than others. Both of these aspects will get factored in to how much the owner of a particular car pays to insure his or her vehicle against theft.

If Michigan residents want to lower the cost of coverage, the best things to do are to research policy prices for different models before buying a new car, shop among different insurers and use effective antitheft methods, which many insurers will give discounts for.

One example is to have a professional perform a VIN etching on a vehicle, which puts permanently identifying marks on different parts of a car. If you’ve done this, you may be entitled to an insurance discount, although it is not required by law.

The Authority’s data show that VIN-etched vehicles are 29 percent less likely to be stolen compared with vehicles that had no etching.

Source: http://1.usa.gov/yjDVL7

To learn more about this and other insurance issues, you can go to http://www.onlineautoinsurance.com/michigan/ to get access to informative resource pages and a free-to-use quote-comparison generator.

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