Lorraine Explains: Insurers adding $1,500 surcharge on Canada’s most stolen vehicles

Car thefts are coming down, but your insurance rates may not be so quick to follow—here’s what you can do to pare back your bill in the meantime

“Rates have to be put before FSRA [Financial Services Regulatory Authority of Ontario] board to be approved,” says Debbie Arnold, a broker with Sound Insurance. “It takes time to gather stats, and time for that approval process. Right now, we’re just starting to pay for the 2022 – 2023 period where theft is concerned.” The same is true regardless of province; rates are regulated. Shorter version: your current rates reflect information that is nearly two years old. Adjusting to the current news is going to take some time. For 2023, insurance paid out $1.5 billion for auto theft in Canada. Arnold says that’s a quarter of all claims overall.

Chubb Insurance is taking a different approach. Though they are a niche market of high-end vehicles, they’ve chosen a $500 surcharge, but will provide free TAG systems on listed vehicles, and subsidized installations on any others. They’ve also upped deductibles to $5,000 for vehicles valued $100K to $200K, and $10,000 for vehicles over $200K. Deductible will not be waived for total theft loss, and theft coverage will be removed if you have two or more total theft losses in five years. Talk to your broker about vehicles tagged as high-theft.

Intact Insurance has a similar list of HTTVs:

• 2016-2021 Lexus RX series
• 2016-2021 Honda CR-V
• 2015.2020 Ford F-150, F-250, F-350, F-450
• 2013-2019 Toyota Highlander
• 2016-2021 Honda Civic
• 2015-2021 Land Rover Range Rover
• 2018-2021 Honda Accord Series
• 1999-2006 Chevrolet/GMC Silverado, Sierra 1500, 2500 & 3500
• 2009-2018 Dodge RAM 1500, 2500, 3500
• 2016-2021 Toyota Tacoma

This list is also evolving frequently, and similar subsidies available for authorized tracking and recovery systems. They go one step past the $500 surcharge, however. If you don’t have one of their recognized systems as of this week for new business and a month from now for renewals, you will no longer be able to get OPCF 43/43A coverage. That’s the Limited Waiver of Depreciation that all new car owners should be taking; it provides you, depending on your policy, with the full replacement value (usually from two to five years) of your car if it’s stolen or totalled based on your bill of sale, not current market value.

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The actions an owner can choose to reduce or remove that surcharge are as follows:

• To remove the entire surcharge, owner must install an aftermarket immobilizer — either CAN-Phantom or Autowatch Ghost II — professionally installed with proof of payment.
• To remove half of the surcharge, owner must install other aftermarket immobilizers, or cut-off systems including engine wire kill switch, fuse box kill switch, remote or car battery kill switch, fuel cut-off or any two factor authentication system (needs a PIN to start), proof of purchase and installation to be provided.
• To reduce the surcharge to $500, owner can opt for a steering wheel lock, a brake pedal lock, a wheel and tire lock, keyfob signal blocking (excluding Farady devices) or retractable bollards.

Chubb Insurance is taking a different approach. Though they are a niche market of high-end vehicles, they’ve chosen a $500 surcharge, but will provide free TAG systems on listed vehicles, and subsidized installations on any others. They’ve also upped deductibles to $5,000 for vehicles valued $100K to $200K, and $10,000 for vehicles over $200K. Deductible will not be waived for total theft loss, and theft coverage will be removed if you have two or more total theft losses in five years. Talk to your broker about vehicles tagged as high-theft.

Intact Insurance has a similar list of HTTVs:

• 2016-2021 Lexus RX series
• 2016-2021 Honda CR-V
• 2015.2020 Ford F-150, F-250, F-350, F-450
• 2013-2019 Toyota Highlander
• 2016-2021 Honda Civic
• 2015-2021 Land Rover Range Rover
• 2018-2021 Honda Accord Series
• 1999-2006 Chevrolet/GMC Silverado, Sierra 1500, 2500 & 3500
• 2009-2018 Dodge RAM 1500, 2500, 3500
• 2016-2021 Toyota Tacoma

This list is also evolving frequently, and similar subsidies available for authorized tracking and recovery systems. They go one step past the $500 surcharge, however. If you don’t have one of their recognized systems as of this week for new business and a month from now for renewals, you will no longer be able to get OPCF 43/43A coverage. That’s the Limited Waiver of Depreciation that all new car owners should be taking; it provides you, depending on your policy, with the full replacement value (usually from two to five years) of your car if it’s stolen or totalled based on your bill of sale, not current market value.

The discount most insurers are providing for the installation of their designated anti-theft devices is usually around 20%, but that’s only off the comprehensive part of your policy. Most insurers are affixing surcharges — usually $500 — on high-risk vehicles. Check with your broker or provider for up-to-date details, especially if you’re buying a new vehicle.

Debbie Arnold has a word of caution to everybody staring hard at rate increases due to auto theft: “It’s not just auto theft: severe weather and wildfires are dominating claims. The Toronto flood is $1 billion in anticipated claims payout.”

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