Question: I bought a seven-year-old car recently. One of its many features was a factory-installed anti-theft device. There are also specially made keys for the door locks, trunk and ignition lock. These are part of measures to reduce the risk of theft.

A previous car was stolen when it was parked at my home. I replaced the factory system in my new car with a more modern one that I bought overseas. It has sensors, motion detectors, and a radio receiver that allows wireless control, siren, remote starting and a control unit. A hidden 'kill switch' disables the ignition system by default. The engine will not start unless the system is disarmed. Even if the vehicle were to be left unlocked, thieves would have difficulty in starting the engine. Shouldn't I get a discount off my motor premium for this system?

- CS, Kingston 6.

Answer: Insurers in Jamaica have "been consistently averse to offering discriminatory pricing ... where consumers have taken action to reduce the size (and frequency) of losses".

I wrote those words over nine years ago. They applied to insurance for buildings and contents.

I decided to do a quick and random survey after you contacted me. I wanted to see whether that opinion was still valid when applied to motor insurance.

After all, we are now in the 21st century. Perhaps some of the life-insurance rating practices were now being used in the business of motor insurance.

Insurance company critics say that I am biased. In order to maintain the integrity of this column and ensure that the informal survey was conducted impartially, I entered the phrase: "car alarm system and insurance" into my search engine. It was the first step in the process.

Google located 1,080,000 references.

This is an extract from the first one titled 'Easy ways to save on car insurance': "You'll pay lower premiums if your vehicle is equipped with a tracking system, a car alarm or other anti-theft devices for one big reason: Insurers say they work."

It was written in the United States and also said the Federal Bureau of Investigations (FBI) estimated that "1.2 million cars were snatched there in 2006."

Another stated that New York's Department of Insurance enacted a law in 1979 on anti-theft devices. The regulator ordered insurers in that state to offer "premium discounts for cars equipped with anti-theft devices".

Other states have enacted a similar law. Insurers opposed it. They question the effectiveness of car alarms.

The United Kingdom insurance market approached car alarms in a very different way.

Forty years ago, insurers set up a motor insurance repair research centre. It is called Thatcham.

That body, among other things, sets standards for anti-theft devices. When approved alarm systems are installed by Thatcham-accredited companies, insurers offer discounts.

The three local insurers I called believe in tracking systems.

Only cars fitted with recovery devices that are installed and monitored by two named security providers get discounts.

Owners of other anti-theft systems, including factory-fitted devices get nothing. Tracking systems are not cheap.

The cost of buying and fitting one can amount to $32,620 (including GCT). There is also monthly charge of $1,500 (plus GCT) for monitoring.

Insurers in other countries give discounts for anti-theft devices. These include Australia, New Zealand and Trinidad & Tobago. The discount ranges from a low of five per cent to a high of 15 per cent.

The actual amount depends on the type of alarm. Discounts are not limited to cars with tracking systems that are designed to facilitate recovery when thefts occur.Motor insurers in Jamaica say that "Toyota, Honda and Nissan top the list of stolen vehicles or theft-related incidents" for the period 2004 to June 2006, according to information on the website www.jagiconline.com.

Five models stand out: Honda Accord and Honda Civic; Nissan Sunny; and Toyota Corolla and Hiace.

The statistics do not say if any of these vehicles had working alarm systems when they were stolen. Rate making is the process insurers use to calculate premiums.

The Dictionary of Insurance Terms says premiums should meet three criteria:

1) They should be sufficient to pay losses based on expected frequency and severity. When this happens, insurers remain in business and do not become insolvent.

2) Premiums should be reasonable. Insurers should not earn excessive profits.

3) Premiums should not be unfairly discriminatory or inequitable. This means "in theory that each insurance applicant should pay a unique premium to reflect a different expectation of loss".

My survey suggests that insurers are treating persons like you who fit alarm devices to their cars no differently than those who do not. Common sense plus information from the other sources I listed suggest that cars without alarm systems are more prone to suffer theft losses than those with the devices.

Additionally, if a vehicle is not in the insurers' high-risk category of stolen vehicles, the risk of loss should, on average, be lower than one in that group.

On paper, therefore, you are entitled to receive a discount.

I strongly suggest that you take the matter up with your insurer/broker.

Cedric E. Stephens provides independent information and free advice about the management of risks and insurance. Email: aegis@cwjamaica.com.