Theft and car insurance: Why it increases premiums

As vehicles become more technologically-advanced, car thieves are becoming more adaptable and tech-savvy. Thieves can now break into your car seamlessly using a wireless transmitter via keyless entry. Not only is it a headache to file a claim and procure a rental vehicle, the cost of your stolen car can cost you higher car insurance premiums, as well. Let’s examine how the increase in car theft is impacting car insurance premiums.

Car theft and crime rings

According to the Toronto Police Services (TPS) auto theft statistics, a car is stolen every six minutes in Canada. In Toronto, where auto theft is most rampant, 9,606 cars were stolen in 2022. This is nearly triple the number of vehicles stolen in 2015. How often the make and model of your vehicle is stolen is one of the factors insurers consider when determining your insurance premiums. In addition, research by the IBC finds that thieves try to steal your vehicle for one of five reasons:

1. To sell abroad

80 to 85 percent of stolen vehicles are in connection to organized crime and will most likely be sent overseas.

2. To sell to local unsuspecting customers

Thieves give these vehicles a false VIN and then sell to unsuspecting consumers here in Ontario.

3. To be sold for parts

“Chopping”or dismantling vehicles for parts is a common practice for converting your car into cash.

4. To get somewhere

Also known as “joyriding”. Your car might be taken for no more than a night’s entertainment.

5. To commit another crime

Thieves are frequently in need of vehicles to help them commit other crimes — usually robberies.

Because of the complex relationship between auto thefts and crime rings, the Government of Ontario is stepping in, too. They are investing $51 million (since May) to target car thefts linked to organized crime, reduction of gang violence to dismantle vehicle theft rings, to boost community safety and more. The investment will carry out over the next three years.

Premiums increases follow auto theft claims

When so many cars disappear from our driveways and curb-sides, it doesn’t just affect the car owners. “It’s important to note these dramatic losses have fallen squarely on the shoulders of Canada’s insurers,” says the Insurance Bureau of Canada (IBC) in a statement to RATESDOTCA. According to the IBC, theft claims costs in Ontario were approximately $700 million in 2022 alone – up nearly 300% from 2018. The insurance industry lost one billion dollars to auto theft last year.

“It’s a national crisis,” Bryan Gastl, VP of Investigative Services at Équité Association told Global News. “In 2023, the first six months are proving to be worse than 2022.” Research Specialist, Ernesto Lopez, co-author of the Council on Criminal Justice’s crime trends report also declare that, “Motor vehicle thefts are up about 34% during the first half of 2023 [in comparison] to the same time frame last year. They are 104% higher than in the same period in 2019, the year before the pandemic.” At the end of the day, experts agree that premiums follow claims costs.

High-risk vehicles

With no signs of auto theft slowing down, some insurance companies are adding surcharges if you drive a vehicle at risk of being stolen. According to rates.ca, some insurance companies are raising premiums if your vehicle is ‘a higher risk’ of being taken by thieves, partly due to covering massive insurance losses. According to the Equite Association’s latest Vehicle Theft Trend Report, here is the list of the most popular models of vehicles stolen:

Because these cars are more likely to be stolen, it is increasingly more expensive to insure them. According to data from the RATESDOTCA auto insurance quoter, comprehensive insurance claims (where theft claims will be covered) on these specific commonly stolen cars jumped between 25% to 50% over the last two years.

Car theft doesn’t just impact insurance premium increases

In addition to higher premiums, some insurance companies are adding on other charges to help make up their losses. Insurers, such as CAA, are also charging an extra $500 for vehicles with high rates of theft. However, the surcharge is removal once drivers prove they have an anti-theft device, such as a wheel lock (known as The Club). Other insurance companies, including Aviva and Gore Mutual amongst others, partnered up with the Canadian anti-theft tracking company Tag to help prevent and recover stolen cars. The Tag System places individual trackers on commonly sold parts of the car to make the resale of parts harder for thieves. Additionally, it makes automobile recovery across North America more possible.

Customers who own high-risk vehicles may be charged a High Theft Vehicle surcharge at renewal unless they install a Tag tracking system on their car. Some of these insurance partners will offer reimbursement for the Tag installation, which costs around $400. Or they may offer a credit for the installation and remove or refund the surcharge; others remove the surcharge only.

Increases in car theft costs everyone

According to government estimates, auto insurance fraud – including theft – costs Ontarians up to $1.6 billion yearly. These costs include:

• Fixing or replacing stolen vehicles
• Increases in health care and treatment costs
• Investigative and judicial costs that link to detecting and penalizing fraudsters and thieves

In addition to using a steering wheel club and installing the Tag tracking system to your car, you can also ward away car-seeking criminals by keeping your keys in a signal-blocking Faraday bag at home. Furthermore, you can park your cars in a well-lit location overnight.

On average, a car is stolen every six minutes in Canada, and with stolen vehicle trends on the rise, your car may be next.

Key takeaways regarding car theft impacting car insurance premiums

1. It’s no surprise that stolen vehicle trends are on the rise. There are various ways a thief can access your vehicle, including the use of your vehicle identification number (VIN), smart key fobs, and Apple AirTags.
2. Whether your insurance covers car theft will depend on the exact terms of your policy. Adding comprehensive coverage protects you against non-collision risks, including a stolen vehicle.
3. Because insurance premiums are all about weighing the risk, highly stolen cars and those who live in theft-prone areas tend to face more expensive rates.
4. To crack down on stolen vehicle claims, some insurers may offer special programs for anti-theft technology. Aviva, for instance, is offering a limited-time, free installation for auto theft recovery software to select Ontario drivers.

To learn more about how to protect your vehicle or ways auto theft is impacting car insurance, check out our list of articles below:

• Smart keys and auto theft: Does keyless remote entry help thieves?
• Apple AirTags and car theft: Downside of tracking technology
• AirTags and stolen cars: Apple to improve safety measures
• Top 10 most stolen cars in Canada
• Parking insurance: What is it and do I need it?

Related Articles

Car theft in Ontario: Which car models are at risk?

Canada’s auto theft crisis – What’s being done?

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