Taking a Bite Out of Theft

Car theft costs Canadians about $1.2 billion a year, including health care expenses, court policing, legal and out of pocket costs such as deductibles, according to the Insurance Bureau of Canada. The average auto claim in Toronto is $34,858 (outside of the Greater Toronto Area, this figure drops to $11,067), Moneyville reports.1 These losses are made up through insurance premiums, costing each Canadian policyholder. Factor in other vehicle thefts, such as cargo and heavy equipment and you start to get a clearer picture of a potential epidemic.

So why is vehicle theft so rampant in Ontario? It has a lot to do with insufficient legislation and ineffective current laws. Car thieves know their penalty is merely a slap on the wrist. They are charged under the Criminal Code with possession of stolen property over $5,000 or with theft over $5,000. Repeat offenders and those charged with multiple thefts rarely face jail time. In fact, police often arrest the same miscreants who are the front line for a more clandestine group which operate behind the scenes. Until Nov 5, 2010, border and customs officials had no power to inspect and seize suspicious shipping containers of vehicles leaving the country. However, the implementation of Bill S-9 provides tough action on property crime, including the serious crimes of auto theft and trafficking in property that is obtained by crime. This is a great first step in stopping vehicles from leaving the country. The bigger challenge is: How do we prevent vehicles from being stolen in the first place? Consumer education has helped by encouraging common sense behaviours such as locking doors and not leaving the car running while unattended, to name a few. Standard 114, under the Motor Vehicle Safety Act, mandates that all vehicles under 4,536 kg GVWR manufactured after Sept. 1 2007 must be outfitted with an electronic immobilizer. These measures have helped by stopping the petty or quick and easy theft. It has done nothing for theft as a result of organized crime.

There is a misconception that vehicle theft is a victimless crime. However, there are plenty of reports and examples contradicting this misjudgment.

Through vehicle theft, terrorists fund their operation. Home invasions and business break and enters typically occur with a stolen vehicle. Bomb deployments in other parts of the world have been often a result of a plated North American car packed with explosives.

Of course, I have just identified the theft as a pure claim item from an insurer’s standpoint. What is not clear and harder to define is the sundry costs to vehicle theft. The figure of $1.2 billion could be substantially larger when miscellaneous costs are considered. For example, medical costs due to mental or physical trauma. These costs are shouldered by taxpayers and through accident benefits of insurers. A theft always requires additional support from police and possible emergency services. These costs are paid by the taxpayer. Business break and enters could leave a business inoperable for weeks, thereby putting people out of work. This leads to business interruption claims. In some cases, insurance could be inadequate which could lead to non-compensable losses. Almost everyone can consider scenarios where the spin off from vehicle theft has far-ranging ramifications. Of course, no one can put a price on loss of life as the result of vehicle theft.

Although there has been a noble attempt to eliminate the problem, it still exists. Although harsher penalties are needed, a more permanent fix is required. The governing bodies have the power to implement change, however they first need to embrace current world-class initiatives and solutions.

Car manufacturers have built-in anti-theft technology, which is inadequate for a seasoned thief. A properly installed three circuit immobilizer has been identified as an almost fool-proof deterrent, as reported in other parts of the world where theft is a much greater issue. With the proper technology installed, thefts decrease and a subsequent reduction in claims. This scenario already exists in Manitoba. The provincial government, as an insurer, enforced electronic immobilization in September 2007 and has reaped the rewards of its action. The city of Winnipeg has recorded up to a 75 per cent reduction in car thefts alone.  By 2014, the province estimates a savings of up to $157,324,000 due to the immobilizer program. To date, the province has saved $31,586,000 due to enforcement of proper immobilization. These numbers are purely based on theft claims for cars and does not take into account cargo and heavy equipment theft, as well as associated sundry costs.   

Anthony Mannella is a corporate sales consultant with Ontario Security Solutions.

1. http://www.moneyville.ca/article/846694–toronto-auto-insurance-claims-average-cost-34-858