Canada’s Auto Theft Rates Decline, Insurance Still Rising

Canada’s auto theft problem might be showing signs of easing, but drivers are likely to continue feeling the pinch on their insurance premiums, according to experts consulted by Global News.

A recent Ratehub.ca survey revealed that nearly half (48 percent) of respondents have experienced a “significant” increase in auto insurance premiums recently. This surge in costs is partly attributed to the country’s high rates of vehicle theft. A report by Interpol recently listed Canada among the top 10 countries for stolen vehicle reports.

The impact of car thefts on insurance premiums has been substantial. The Insurance Bureau of Canada reported that private auto insurance firms paid out $1.5 billion in theft claims last year, a staggering 254 percent increase from 2018 levels. In Ontario alone, these costs exceeded $1 billion for the first time, marking a 524 percent rise.

Morgan Roberts, vice-president of RH Insurance, noted the dramatic increase in car thefts during her 15 years in the industry. “There’s been more theft than I’ve ever dealt with in my career. So that definitely does have a cost in the insurance industry as well,” she told Global News.

Despite the grim statistics, there are signs of improvement. A recent report by the non-profit Équité Association showed a 17 percent national decline in auto theft in the first six months of 2024 compared with the same period last year. This improvement is partly due to increased attention from federal and provincial governments and law enforcement agencies.

Adam Mitchell, CEO of Mitch Insurance, explained that insurance premiums do not rise immediately in response to current events. Instead, there is a delayed impact as insurers need to book claims and demonstrate to regulators the incurred losses before they can raise premiums. As a result, premiums might continue to rise even if auto theft rates decline.

Insurance operates as a collective pool of funds where many pay in so that a few can claim when needed. With more claims being made, the pool must grow, leading to higher premiums. This means that even drivers with clean records might see their premiums increase due to the overall rise in theft-related claims.

“It’s OK to get your head around the idea that you didn’t necessarily do anything wrong. The environment changed,” Mitchell said.

Mitchell advised that the cost of buying a car should be considered alongside potential insurance premiums. Vehicles that are more commonly stolen will cost more to insure. “If you’re shopping for a car, directly or indirectly, you’re shopping for insurance as well,” he noted.