Canada’s Insurers Are Taking Action to Combat Auto Theft
Toronto, ON (Sept. 11, 2023) – As Canada faces an auto theft crisis, insurers are taking proactive steps to better protect consumers and their vehicles.
“Fighting auto theft requires a whole-of-society approach – and Canada’s insurers are proudly doing their part,” said Amanda Dean, Interim Vice-President, Ontario, Insurance Bureau of Canada (IBC). “While insurers are taking proactive steps to better protect their customers, our industry cannot combat auto theft alone. All stakeholders, including governments, law enforcement and auto manufacturers, have a critical role to play and must take immediate steps to address the auto theft crisis.”
As revealed by Équité Association in a recent media release, 2022 marked the first time in history when Canada’s insurers paid over $1 billion in claims for stolen vehicles.[1] Regions at higher risk of auto theft include the Greater Toronto Area (GTA), which is responsible for approximately $500 million of this total. Three regions in the GTA that have seen some of the steepest increases in auto theft insurance claims costs in the country over the last five years are Durham (+561%), Halton (+514%) and York (+497%).
In Ontario alone, theft claims costs were approximately $700 million in 2022, up from approximately $160 million in 2018, a staggering 329% increase. While claims payouts for theft have increased 329%, insurers are incentivizing consumers to take steps to protect their vehicles from theft and manage their premiums.
Many insurers are now subsidizing the costs associated with the installation of approved aftermarket tracking devices, typically priced in the hundreds of dollars per vehicle. While insurers may apply a surcharge on vehicles at highest risk of theft, many insurers are waiving this surcharge if the policyholder takes proactive steps, outlined by the insurer, to better protect their vehicle.
“It’s clear that government action is required to combat auto theft in Canada. But empowering drivers with information on the steps they can take to protect themselves is also important,” added Dean. “Whether it be installing anti-theft or tracking devices, or simply buying or leasing vehicles that are harder to steal in the first place, drivers can take action to keep themselves from being victims of auto theft and to reduce their auto insurance premiums.”
Insurers assess many factors when calculating an insurance premium – like the policyholder’s driving record, where they live, how much they drive, the type of vehicle they drive, and the frequency of theft for their particular vehicle’s make, model and year. Generally, the harder a car is to steal and the less expensive it is to repair, the less it costs to insure. To help make an informed decision when purchasing a vehicle, speak to your insurance representative and check out Équité Association’s list of the top 10 most stolen vehicles in Canada.
The auto insurance industry uses the Canadian Loss Experience Automobile Rating (CLEAR) system,[2] which groups vehicles into higher and lower rankings, as a factor in determining auto insurance premiums. A vehicle with a lower CLEAR ranking could indicate a lower theft risk, perhaps because it was manufactured with stronger anti-theft devices.
IBC and its members are continuing to work with all levels of government, Équité Association and other key stakeholders to address the ongoing auto theft crisis in Canada. As criminals constantly evolve their techniques to steal vehicles, it is incumbent on every stakeholder to take immediate action to protect Canadian drivers.
Notes
1. Vehicle Theft Reaches A Crisis Level As Canada Becomes A Source Nation For Illegal Trade: Équité Association recommends a layered approach to combat the dramatic increase in Canadian vehicle thefts (June 6, 2023).
2. CLEAR (Canadian Loss Experience Automobile Rating): Insurers use CLEAR to estimate future claims more accurately and to price premiums fairly for owners who buy vehicles that experience fewer claims and smaller losses.
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada’s private home, auto and business insurers. Its member companies make up the vast majority of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
For more information, visit www.ibc.ca. If you have a question about home, auto or business insurance, contact IBC’s Consumer Information Centre at 1-844-2ask-IBC.
Source: Insurance Bureau of Canada (IBC)