What to know about insurance before buying a high-theft vehicle

Auto theft rates might be on the decline in Canada, but high claims costs and the tariff dispute mean insurance rates have yet to drop.

While drivers of some of the most stolen cars often face the heftiest insurance bills, experts say there are a few things they can do to tamp down on their premiums.

Here’s some of their advice.

How do you find out if you have a high-theft vehicle?

Debbie Arnold, a business development manager of personal lines at Sound Insurance Services Inc., urges drivers to call their insurance company or broker for a quote before buying any vehicle.

Because every insurer relies on a different pool of data from their customer base, Arnold said a car that is considered a high-theft vehicle at one company may not have that classification at another.

A call to an insurer can identify where your vehicle falls on its spectrum and give you a hint of what you may pay, if you purchase that car.

Generally, hybrid and electric vehicles aren’t considered high theft because they create more grunt work for thieves and aren’t as coveted on criminal markets, Arnold said.

By comparison, she has found SUVs and pickup trucks tend to be on most stolen lists and thus, they often generate higher insurance fees.

Many insurance companies demand drivers of high-theft vehicles install specific tracking or anti-theft devices. How does that work?

Morgan Roberts, Vice President of Ratehub.ca’s in-house property and casualty brokerage RH Insurance, said many drivers of high-theft vehicles are typically presented with an ultimatum as soon as they insure their car.

The drivers either have to install specific anti-theft devices or pay surcharges, which she said can total up to $1,500 annually in some cases.

“If you really want the car, like, the No. 1 car on the top stolen list, and it’s going to be a giant surcharge, definitely check into the anti-theft and see if it brings it into your budget,” Roberts said.

Should I install the device if I have a high-theft vehicle or just pay the surcharge?

Usually, the economics of installing the device makes sense, Roberts said. 

Tag Tracking and KYCS Locate — tracking and stolen vehicle recovery systems many insurers insist on — can often cost about $400. Immobilizers, which prevent a vehicle from starting without the correct key or authorized signal, often range from $850 to $1,500, Arnold said.

In many cases, these devices can be less than the surcharge for not installing a device. 

Installing an anti-theft system is also a good idea because some insurers won’t give you a waiver of depreciation if you buy a new car and skip adding such a device, Roberts said. A waiver of depreciation ensures you get your purchase price as opposed to the depreciated value if your new car is stolen or written off.

Roberts argues the devices also have a non-monetary benefit; they offer some peace of mind because if your car is stolen, you have an extra tool to help get it back.

But there’s also some logic to skipping the device, if you can afford the surcharge.

“I have a client that refuses to have any anti-theft device installed because if his vehicle gets stolen, he doesn’t want the vehicle back because he doesn’t know what the thief has done in that vehicle or done to that vehicle,” Arnold said.

If I want to install the anti-theft device to avoid a fee, how do I know which to go with?

Every insurance company that requires drivers of high-theft vehicles to install devices has specific rules around what systems they will accept in exchange for waiving a surcharge.

“Don’t just get any anti-theft device,” Roberts said. “Make sure it is the one that’s approved by the insurance company that you’re with.”

Anything else I should know about buying a high-theft vehicle?

Some insurers won’t offer collision or comprehensive insurance for vehicles they consider as having a high likelihood of being stolen, Arnold said. 

Collision insurance often covers drivers affected by crashes and other accidents, while comprehensive insurance protects cars from non-collision events, such as theft, weather, vandalism or animal strikes.

What else can I do to shave down my costs if I have a high-theft vehicle?

Bundling your home and auto insurance together and keeping all your household’s vehicles together under one carrier can often generate savings, Arnold said.

She also recommended people consider enrolling in their insurer’s telematics program, which uses smartphone apps or devices implanted in a vehicle to monitor speed, braking patterns, acceleration, mileage and other driving habits. 

Arnold has seen drivers who are participating in telematics programs and have safe habits shave up to 30% off their insurance costs.

Read more about insurance:

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• After a fire or flood, the financial fallout can be costly
• You bought a home—should life insurance be next?
• The state of the Canadian used car market: Trends, insurance, and the true cost of ownership

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