Auto Theft and Your Auto Insurance Premiums

Published: April 11, 2018

Updated: September 20, 2018



Auto theft causes an increase of $35 in the premiums of each policy holder, according to the Insurance Bureau of Canada. Also, an estimated $1 billion is spent on court proceedings, policing, and deductibles every year. That is to say the issue affects everyone.

Many clients lack the understanding of how car insurance companies adjust their rates to minimize these losses. Read on to learn how insurers evaluate the possibility of your vehicle being stolen. You will also learn how to prevent the theft of your vehicle and what to do should this occur.

The comprehensive portion of your policy will cover the loss of your vehicle if it gets stolen. This does not automatically imply that your insurance company will pay you the replacement value of your car. It depends to a large extent on your deductible and coverage limit.

For instance, supposing you own a 2018Honda Civic which is valued at over $30,000. Assuming you have comprehensive coverage, you mayreceive a cheque that is less than what your car is worth, if you do not have OPCF #43 Waiver of Depreciation added to your vehicle.

To save on your auto insurance, an alternative is to drop the comprehensive coverage which is a good method for reducing your premium if the replacement value of your car is low. Another option is to buy a car which is considered by insurers are having a lower chance of being stolen.

Car insurance companies depend on a rating system which examines the possibility for claims related to losses – such as auto theft – for each make and model. It is referred to as theCanadian Loss Experience Automobile Rating (CLEAR) system. Cars are grouped into categories depending on the risk they cause to insurance companies. Each vehicle is given a rating. Customers who buy cars that have low CLEAR numbers are considered according to statistics as less likely to have their cars stolen. As a consequence, their insurer may agree to reduce the comprehensive aspect of their premium.

The best thing to do is to prevent your car from being stolen. If you want to leave your personal belongings in your vehicle, ensure they are out of sight. Place them in the trunk or cover them. If a thief notices a new device on your passenger seat, they will be tempted to steal it. Make sure you secure a property insurance policy to insure your personal items since it is unlikely that your auto insurance coverage will cover this.

Contact the police to file a report once you find out that your vehicle has been stolen. Ask for a report number from the attending officer. Next, call your insurance company to file a claim i.e. if you have comprehensive insurance. You will be asked to provide the report number and other details concerning your car. The reimbursement process will be explained to you based on your coverage.