Insurance Coverage for Frequently Stolen Vehicles is High. How to Reduce Your Premiums

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TORONTO – Finding relief from car insurance premiums is often top of mind for drivers.

Especially now, when the number of thefts has led to higher insurance costs, it is particularly important to find ways to reduce this number.

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Experts say installing a tracking device and parking in a garage are among the measures that could help reduce insurance costs.

“In general, a number of factors determine insurance premiums – including driving history, vehicle type and location,” said Matt Hands, vice president of insurance at rate comparison website Ratehub.ca. But as car thefts increase, he added, some car owners may have to pay an insurance surcharge.

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“As a consumer, when you see the price, you might think, ‘Oh, wow, that’s pretty expensive,'” he said. “A good agent will explain to you why the price is largely beyond their control.”

Insurance sticker shock is more likely for vehicles that are more prone to theft because insurance agencies pay more for claims. Honda CR-Vs, the latest Dodge RAM 1500 series and Ford F150s were the three most stolen vehicles in 2022, according to insurance fraud prevention group Equite Association.

In some cases, companies refuse to insure these particular vehicles. While others charge higher premiums, there are still ways to lower this amount somewhat.

Car owners might consider installing an aftermarket device called a tag system.

A trailer can help recover the vehicle and also reduces the risk of the car being stolen, says Liam McGuinty, vice-president of strategy at the Insurance Bureau of Canada.

“It reduces the risk of a claim because (the car) could be repossessed,” McGuinty said. “In addition, some aftermarket tracking devices come with a sticker on the car, so they could have a deterrent effect.”

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A tracking device can cost about $400, Hands said — an additional cost that car owners will likely have to cover themselves. However, some insurance companies are willing to offer discounts or reimburse partial costs of the device to encourage faster adoption, he added.

Hand estimates the discounts could be between 10 and 30 percent.

Some insurers may also lower your premium if a tag system is installed. Others charge extra for owners without a device. Hands said the supplement could be up to $500 per year.

But for the most frequently stolen vehicles, even a sticker doesn’t necessarily reduce insurance premiums, experts warn.

Every insurance company works differently, McGuinty said.

“There is no set standard answer from the insurance industry as to whether you will receive an X premium discount when you install an aftermarket tracking device,” he said.

“It just doesn’t work that way.”

However, it could deter would-be thieves – which may impact insurance premiums in the future, as drivers who have had a vehicle stolen in the past may end up paying more over time.

Hands explained that even if an insurance company doesn’t offer discounts or refunds, preventive measures still benefit car owners.

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“The longer you can stay claim-free on your record, the better your insurance rates should be,” Hands said.

Finding better insurance deals is also a crucial cost-saving step.

Steve Henderson, managing partner at Youngs Insurance Brokers Inc., says he has seen some insurance companies take a step back and refuse to insure cars that were at the top of the list of most stolen vehicles.

When working with a client, he does his best to get appropriate quotes and pass on any advice passed down the chain by insurance companies, he said.

“We’re reviewing our range of companies and figuring out who’s the best,” Henderson said. “We try to use our companies to benefit consumers.”

Tips for preventing car theft and likely relief from insurance premiums include parking in the garage and locking the steering wheel with a device when parking outside. and storing car keys in a Faraday bag, an aluminum-lined bag that blocks fob signals.

Hands said people thinking about purchasing a new vehicle should look at the most commonly stolen vehicle models and see if their potential purchase is on the list.

“If you are looking for a commercial vehicle, you may want to choose a vehicle that is not on this list because it can save you money in the long run,” Hands said.

Overall, it’s harder to cut premiums dramatically, largely because the industry is regulated and any insurer that wants to raise or lower rates must be approved by the rate regulator, McGuinty said.

This report by The Canadian Press was first published April 15, 2024.

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