Canada’s auto theft crisis: What it means for your ride and your insurance

Five years ago, auto insurance companies in Ontario, Quebec, Alberta and the Atlantic provinces paid out $400 million in theft claims. In 2022, that figure ballooned to $1.2 billion, the worst on record. Amanda Dean, interim vice president of Ontario region for the Insurance Bureau of Canada, says the situation isn’t likely to improve for 2023. 

“As theft rates increase, and along with it claims costs, insurers are certainly worried about what the future could hold,” she says. For drivers, even those with no history of theft or damage, auto insurance is likely to get more expensive so long as theft rates remain high. Fortunately, experts say there are some things drivers can do to minimize their chances of losing their ride. 

Why car theft is on the rise across Canada 

Joyriders and opportunists aren’t responsible for most Canadian car thefts, according to insurance experts. Organized crime groups, using sophisticated techniques, bear much of the blame for Canada’s billion-dollar-a-year auto theft problem. 

Bryan Gast is the vice president of investigative services for Équité Association, a national not-for-profit that helps Canadian insurers fight fraud. He says one common technique is a relay attack: intercepting the radio frequency used by a key fob to unlock a car remotely. Another is by using the electronic diagnostic port found under a car’s steering wheel to reprogram the car. 

Once inside, a thief can drive away with your ride and sell it off. In the most extreme cases, it may end up smuggled through a port—generally on Canada’s eastern seaboard, Gast says—and shipped to West Africa or the Middle East. “We have thousands of vehicles, that have been identified, that we’re working to repatriate back to Canada,” Gast says. 

Alternatively, a car might be given a false vehicle identification number (VIN) and used as a car by an organized crime group for its operations. Then there are old-fashioned “chop shops,” where stolen cars are stripped down and sold off for parts. “It’s extremely lucrative,” Gast says.

Experts blame a couple of factors on the rise in auto thefts over the past few years. Dean points to outdated anti-theft standards for Canadian vehicles—the last update, in 2007, was before keyless entry became a common feature on many cars. Then there’s the price of cars themselves. Thanks to persistently-high demand, the average new vehicle cost $66,288 in June 2023, according to Autotrader. 

The most stolen cars in Canada

Many of the most-stolen vehicles in Canada aren’t all that flashy. Gast says the models vary by region. In Alberta, for example, pickup trucks are high on the list. According to Équité Association, the most commonly stolen vehicle model in Canada last year was the Honda CR-V. The Ford F-150, Honda Civic and Toyota Highlander—all mainstays of Canadian driveways—made the list of top five most stolen vehicles, as did the Lexus RX, a higher-end model.

Even if you don’t own one of these vehicles, Dean says you’re still on the hook for the ongoing auto theft epidemic. “Claims made by the few are paid for by the premiums of many—this is one of the basic principles of insurance to ensure that claims can be paid.”

How car theft is impacting auto insurance rates, especially in Ontario

The Canadian auto insurance sector uses its own system, known as the Canadian Loss Experience Automobile Rating (CLEAR), to determine the likelihood and risk of a vehicle being stolen. This, in turn, helps determine how much an insurer charges to cover your vehicle.

Although your insurance premium is based on your specific circumstances, drivers as a whole are feeling the impact of a rise in auto theft claims, particularly in Ontario and cities like Toronto, where there are greater incidents of theft, Dean says. “Auto theft has picked up in other jurisdictions, and the premiums of drivers in those areas will reflect the rate of theft in those areas. This is a national crisis, but an epidemic in Ontario.”

In 2022, Ontario drivers paid anywhere between $125 and $140 a year for their policies, regardless of whether they drove high-risk vehicles, simply to cover the broader cost of auto theft. “As we’re looking at 2023, with the year worsening, that number will increase in terms of what insurers are paying out,” Dean says. 

How much have rates increased? 

Rates are already rising in Ontario, home to roughly $700 million in auto insurance claims in 2022 alone. According to data from Ratehub.ca (whose parent company, Ratehub Inc., also owns MoneySense), average premiums in the province jumped 10% in 2023 compared to 2022.

Meanwhile, a database maintained by the Financial Services Regulatory Authority of Ontario, which approves rate increases by auto insurers, suggests many insurers are keen on hiking their rates. Aviva, for example, was approved to hike rates by 5.33%, while CAA received permission to increase premiums by 8.22%. 

Charging higher premiums is in the cards for auto insurers, but Dean says they’re also looking for ways to help customers avoid theft in the first place. That includes covering the installation cost of tracking devices for vehicles, working with the provincial and federal governments on stopping theft, and simply teaching consumers how to avoid theft in the first place. 

“There’s certainly a role for everyone,” Dean says. “It really will require a whole-of-government approach to stem the tide.” 

How to prevent car theft

There are many steps you can take to prevent car theft. First, consider installing an anti-theft device. The most popular is an old-fashioned steering wheel lock—and it’s a good visual deterrent to a thief. Pedal locks have the same effect, preventing a thief from slamming on the gas. There are even locks designed to keep thieves from accessing your car’s diagnostic port. 

Immobilizers capable of disabling your vehicle, as well as tracking devices to guide law enforcement to a thief, can also be good additions—although Gast says to check with the vehicle manufacturer and to always have devices professionally installed to prevent voiding the car’s warranty. 

There are even ways for car owners to prevent a relay attack. Modern key fobs often have a ‘sleep’ mode, which shuts them off and prevents their signal from being intercepted. For car owners without one of these fobs, Gast recommends buying a Faraday pouch, a container capable of blocking the range of a fob’s radio frequency so it cannot be hacked. 

Still, there is no such thing as a fully theft-proof vehicle. Even if a diligent owner installs a tracking device, buys a lock for their diagnostic port and uses a Faraday pouch, a gang of professional thieves may still be able to drive away with their car. 

However, implementing multiple anti-theft systems creates what Gast calls a “layered’ approach.” Would-be thieves are looking for easy targets—and may overlook a well-locked vehicle in favour of one with few or no countermeasures. 

What does a layered approach entail? On top of installing protective devices, Gast says, park in a garage wherever possible. Barring that, park in a well-lit area. If you have several vehicles you can’t securely park, ensure whichever one is the most tempting for thieves—such as a newer model SUV with push-to-start capabilities—is parked against a building with other vehicles around it. 

While thieves can circumvent individual prevention techniques, Gast says a combination of several at once can frustrate the efforts of even dedicated thieves. “You don’t have to turn your vehicle into Fort Knox,” Gast says. “If they don’t have the right tools to be able to defeat whatever layers you’ve chosen, they will seek another vehicle.”

Read more about auto insurance:

• How much is insurance for a new driver in Ontario?
• What is comprehensive insurance and what does it cover?
• How much does it cost to insure an electric car?
• Everything you need to know about your car insurance deductible

About Brennan Doherty

Brennan Doherty is a Toronto-based writer. His work regularly appears in the Toronto Star, Globe and Mail, BBC Worklife, The Local, and elsewhere.

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