How multiple car theft claims can impact your clients’ auto insurance

It has been estimated that a car is stolen in Canada every five minutes.

Recently, in one day, over 100 stolen vehicles were recovered in an auto theft investigation involving a ServiceOntario employee.

With reports of criminals putting steering locks on stolen vehicles to prevent them from being stolen by other thieves, it is clear that auto theft has become a significant challenge not only for authorities but also for the insurance industry.

As incidents of car theft continue to rise, policyholders are increasingly likely to file multiple claims related to theft and damage. However, that can have consequences too.

Adam Mitchell (pictured above), CEO of Mitch Insurance, discussed the impact of multiple car theft claims on auto insurance and offered insights into how drivers can protect themselves.

“Auto theft is the hot button issue in insurance, especially in Ontario and Quebec. Any areas that are close to big cities, highways and ports, as it’s highly suspected that most stolen vehicles are leaving through the Port of Montreal,” shared Mitchell.

While comprehensive auto insurance provides coverage for theft and theft-related damages, frequent claims can pose challenges for these policyholders.

Mitchell warns that exceeding three claims in three years can categorize drivers as high-risk, resulting in potential premium hikes and policy adjustments.

However, as theft rates rise, policyholders are increasingly likely to make more claims. So what steps can insureds take to prevent their policy premiums from increasing?

It may best for them to avoid filing an insurance claim until they have a clear idea of the potential recovery and the long-term impact.

In cases like attempted theft, where damage might be minimal, they may want to think twice about making a claim – making multiple theft claims can affect insurance status significantly.

However, if a car is stolen and the claim amounts to $50,000 or $100,000, despite deductible and premium considerations, the decision may be more straightforward.

“It’s always best to speak with your insurance broker to see how many comprehensive claims you can make before jeopardizing your coverage,” said Mitchell.

Risk mitigation solutions

To bolster auto theft risk mitigation, policyholders should consider investing in anti-theft devices like engine immobilizers or steering wheel locks.

Additionally, it’s crucial to avoid purchasing vehicles that are frequent targets for theft, especially luxury models like Lexus and Land Rovers, which top the list of commonly stolen vehicles.

“We’ve seen cases where clients have had their cars stolen multiple times,” said Mitchell. “Some have even been advised by police not to replace their stolen vehicles immediately, as they risk being targeted again.”

In the wake of Ontario’s car theft epidemic, the insurer-client landscape has shifted.

Previously, the ideal insurance consumer was someone with a brand-new car, excellent credit, and residing in an upscale neighborhood. Now, these clients may be more of a liability.

“If you live in a nice neighbourhood and drive an upscale car, you are a high probability target for theft,” confirmed Mitchell.