Canadian Underwriter

How auto theft can affect your clients’ premiums

June 16, 2022   by Alyssa DiSabatino

Man with a ski mask inserts a tool into a locked car door at night

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Although making a car theft claim won’t yield higher premiums, repeated claims may make it difficult for an insured to hold onto their theft coverage, says one insurance expert. 

Not all auto insurance policies cover car theft, Matt Hands, director of insurance at RateHub says. “You can add optional coverages to your policy that would cover theft. But…it’s not standard. It’s something you have to opt into.” 

Comprehensive coverage, all-perils or specified perils are among the types of coverage options insureds have to protect their vehicles from theft. Pertinent, as auto thefts are up by 55% in Toronto since last year.  

Ninety-three carjacking incidents have occurred in Toronto in 2022 thus far. Comparatively, this time last year saw only 21 carjackings, and only 103 occurrences in all of 2021, according to a letter penned by Mayor John Tory.  

“Neighbourhoods that have a higher propensity or have a history of claims related to theft and vandalism are going to see their rates higher in those particular regions as opposed to other areas,” says Hands.  

Simply making a claim through a comprehensive coverage policy won’t affect your premiums, although “there’s a little bit more nuance to that,” he adds.  

By making multiple comprehensive coverage claims in a short amount of time — whether the vehicle was stolen, vandalized or damaged from harsh weather — an insured may run the risk of having that type of coverage revoked. 

“[If] you make multiple comprehensive coverage claims in a short amount of time — so, say over a couple-year period — what happens is your insurance company has paid you out three [or more] times, but they haven’t increased rates.”  

Insurers may deem a client high-risk and revoke their comprehensive coverage, leaving them only with the mandatory coverage, if they’ve made multiple claims in a short amount of time.  

“It will take a number of years, depending on your insurance company, for those claims to come off your record where they’d be willing to then offer you comprehensive coverage again,” Hands says.

Despite this, Hands recommends drivers opt into comprehensive coverage if it fits their needs. “For most of us that operate or drive vehicles, comprehensive coverage should be pretty standard. Especially if you buy a vehicle, why wouldn’t you opt into the fullest level of protection?” 

Financed or leased vehicles often require comprehensive coverage, he notes.  

Like most insurable items, premiums vary based on a car’s value. But insureds can potentially see lower premiums in a variety of ways, all of which are tied to mitigating their risk of theft. 

“You can sometimes get a better rate if your vehicle is parked inside a garage or a monitored building — therefore, the vehicle is a little bit more secure and safe — instead of being on the road, or out in front of your garage, or in a public parking lot, where there’s a chance that could be broken into or stolen,” Hands says. “Some companies might offer [safety] discounts for special monitored alarms that may deter theft more.”  


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