How Auto Theft Impacts Your Insurance

The alarm (excuse the pun) over the rise in auto thefts across Canada — and especially in Toronto — has reached critical mass. The numbers for 2023 are in and, according to the Toronto Police Service, total thefts in the city were 12,170, up from 9,785 in 2022 and 5,346 in 2019.

“That's 34 vehicles every day. That's one every 40 minutes,” Police?Chief Myron Demkiw said at a March 18 news conference. “We know this is a concern for our communities and we are continuing to take action.”

Most alarmingly, the level of violence around auto thefts in Toronto is spiking this year. According to Demkiw, there have been 68 carjackings in 2024 (more than double during the same period in 2023) and 34 break-and-entry offences for the purpose of stealing a vehicle, up from 22 in total for all of last year.?Things are getting worse, not better.

Our last newsletter discussed the main reasons and culprits behind the surge; this edition looks at how increased theft claims impact insurance companies and how they’re responding.

Rising Costs

• Accruing financial losses due to more theft-related claims and increased payouts for replacement and repairs
• Reallocating resources to investigate theft-related claims, combat fraud, and implement anti-theft measures to mitigate risk
• Reassessing underwriting practices and risk assessment models and criteria to accurately reflect the current threat landscape

Reactive Responses

• Not surprisingly, the extra costs insurers bear for increased theft claims end up hitting customer bank accounts. (How much depends on your postal code.)
• Adding extra premiums to policies covering the vehicles most likely to be stolen

Proactive Responses

• Collaborating with law enforcement to share information, coordinate anti-theft initiatives, and expedite recovery efforts
• Incentivizing drivers to install recovery, anti-theft, and theft-recovery devices such as immobilizers, tracking systems, and steering wheel locks
• Leveraging analytics and data-mining techniques to identify suspicious claim patterns and detect instances of fraud or misrepresentation related to vehicle theft
• Educating consumers on the importance of safeguarding against theft, and providing tips for prevention and guidance on insurance options

Customers should understand that in most cases, thieves aren’t taking stolen cars for joyrides or purposely damaging them. These are high-tech operators targeting valuable business assets that need to be in the best shape possible for resale.?

At Armour Group, we have a viable vehicle recovery system that may lower insurance premiums and work to combat the crime rings at the root of this scourge. Contact your local territory manager for more details.

Whether on the insurance or dealership side, if you have anything to add on this topic, please share and comment. And if you want to know more about our recovery solution, please get in touch.