Boomerang Tracking System Quickly Becoming Insurers Default

Seymour Alper Insurance Brokers

SKOPE Newsletter

5/1/00

The Canadian auto theft epidemic continues to show no sign of abating. Over the last two years insurers have studied the impact that sophisticated tracking systems installed in vehicles have on their losses. While tracking systems do not necessarily prevent auto thefts from occurring they have a huge impact on the potential to recover a stolen vehicle quickly and thus greatly reduce the number of theft-total loss payments made. Here's how they work: A tracking device-a form of signal transmitter - is installed in a vehicle. If this vehicle is subsequently stolen it can then be tracked and quickly re- covered. Recently, many insurers have decided that the Boomerang Tracking System is the most effective in facilitating auto recoveries. "We believe that the Boomerang Stolen Vehicle Tracking System continues to be one of the most effective systems to combat automobile theft in our province" stated Jo-Anne Polidoro Personal Lines Manager of Chubb Canada's Montreal office when she was contacted for this article. Anne Marie Tourner, sales representative at ING Commerce Group, one of Quebec's largest insurers, was able to cite that her company "had recovered eight stolen vehicles thanks to Boomerang in the month of February 2000 alone."

Insurance companies consider the Boomerang System superior to competing systems because its tracking technology is cellular-based and it, alone can pick up signals from deep underground. Other automobile manufacturer installed systems such as GM's OnStar and Mercedes' GPS are multipurpose, giving drivers lots of bells and whistles but when it comes to vehicle tracking their satellite based technology falls short of what Boomerang can do. Insurers are not merely endorsing Boomerang though. They are beginning to insist as a prerequisite to granting theft coverage that Boomerang systems be in- stalled in high-risk vehicles.

How will this affect you? "In the long-run, if the use of tracking technology lowers theft losses, auto insurance premiums will remain stable or possibly even decrease" states Karla Alper-Lach Vice President at Seymour Alper Inc. But many insurance buyers can expect short-term expense increases according to Alper-Lach. "Purchasing and installing a Boomerang system costs approximately $300 and that's with the insurance company discount already factored in. Boomerang charges a further $140 annually for monitoring services." An advantage of the Boomerang system cited by Alper-Lach is that "It is easily transferable and can be reinstalled into another vehicle so that you do not have to purchase a new system each time you get a new car." For the time being Alper-Lach says that insurers will be imposing the Boomerang requirement only on newly acquired or newly insured cars but that means that "Some insured renewing policies on non-boomerang-equipped vehicles may not be able to switch insurers, even if their cars are five years old, without first installing a Boomerang system." Vehicles previously installed with OnStar or GPS systems will not necessarily be exempt. "If someone buys a new car with one of these other systems or he already owns one and wants to change insurers he may also become subject to the Boomerang requirement, the previously installed tracking system notwithstanding" says Alper-Lach. But she also expects the theft component of auto insurance premiums to increase for non-Boomerang equipped vehicles so that it may pay to install the system in some grandfathered vehicles.

Pat Albert, Seymour Alper Personal Lines Customer Service Representative is preparing herself to deal with confused and possibly irate customers. "We're just familiarizing ourselves with each insurers' new Boomerang requirements" says Albert, "and frankly the scope of vehicles that they consider to be 'target' that will require Boomerang installations in order to be insured is astounding. All vehicles valued new at over $50,000 are subject, as are SUVs and vans valued at over $40,000 new. Some high risk models such as certain Hondas, Acura Integras and jeeps may have to be Boomerang-equipped regardless of their value."

Karla Alper-Lach offers one final in- sight. "Although no one likes to have something forced on them, especially something that will incur cost, I think that if the Boomerang can reduce auto theft losses and help control auto premiums, it is a good thing. We must educate our customers. I think that if we do a good job at this they will come to recognize the benefits that this technology can bring."

Boomerang® is a registered trademark of Boomerang Tracking Inc. It's headquarters are located in Montreal, Quebec. Boomerang products are sold and distributed in the provinces of Quebec, Ontario, British Columbia and in the Dominican Republic. Boomerang Tracking Inc. shares are traded on the Toronto Stock Exchange (TSE) under the trading symbol "BMG".