Often stolen cars have high insurance: how to reduce premiums

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TORONTO – Finding a break on car insurance premiums is often a major concern for drivers.

And finding ways to reduce this rate is especially important when frequent thefts lead to insurance costs.

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According to experts, installing a monitoring device and parking in a garage is one of the actions that can help reduce insurance costs.

In general, many factors determine insurance premiums — driving history, vehicle type and location, among others, says Matt Hands, vice president of insurance at rate comparison site Ratehub.ca. But as car theft increases, some car owners may see insurance premiums, he added.

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“As a consumer, when you see the price, you're like, 'Oh, that's too expensive,'” he said. “A good broker will explain to you why that is the price and is out of their control.”

Sticker shock in insurance is more likely to occur on vehicles that are prone to theft because insurance agencies pay more on claims. Honda CR-Vs, the latest Dodge RAM 1500 series and the Ford F150 are among the top three most stolen vehicles in 2022, according to the Equite Association's insurance fraud prevention group.

In some cases, companies refuse to insure certain vehicles. Others charge higher premiums, but there are still ways to lower that amount a bit.

Vehicle owners may consider installing an aftermarket tracking device called a tag system.

Liam McGinty, vice-president of strategy at the Insurance Bureau of Canada, said the tag helps in vehicle recovery and also reduces the risk of vehicle theft.

“It reduces the risk of a claim because (the vehicle) can be recovered,” McGinty said. “Also, some aftermarket tracking devices come with a sticker on the vehicle, so they can act as a deterrent.”

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The tracking device costs about $400, Hands said — with car owners covering the extra cost. But some insurance companies are willing to offer discounts or cover partial device costs to encourage faster adoption, he added.

Hand-rated discounts can range from 10 percent to 30 percent.

Some insurers may lower your premium when a tag system is installed. Others charge extra for owners without the device. Hands said the surcharge could be $500 a year.

But even a badge won't necessarily lower insurance premiums on cars that are often stolen, experts warn.

Every insurance company works differently, McGinty said.

“There's no standard answer from the insurance industry that if you install an aftermarket tracking device, you'll get X premium discount,” he said.

“It doesn't work like that.”

However, this could deter potential thieves – which could affect insurance premiums in the future, as drivers who have had their vehicles stolen in the past may pay more over time.

Hands explained that taking preventative measures can benefit car owners, even if the insurance company doesn't offer discounts or reimbursements.

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

Shopping for good insurance deals is also an important cost-saving step.

Steve Henderson, managing partner of Youngs Insurance Brokers Inc., says he's noticed some insurance companies taking a step back, dropping coverage on cars that are high on the list of the most stolen vehicles.

When working with a client, he said he will do his best to negotiate favorable deals and share any advice from insurance companies.

“We're going to check out a lot of companies to see who's the best,” Henderson said. “We try to use our companies to benefit our customers.”

Some tips to help prevent car theft and lower insurance premiums include parking inside a garage, locking the steering wheel with a device when parked on the street; and storing car keys in a Faraday bag, an aluminum-coated bag that blocks fob signals.

Hands said people thinking about buying a new car should look at the top stolen car models and see if they're part of a potential purchase list.

“If you're looking for a utility vehicle, a vehicle that's not on this list might be something you want to consider because it will save you money in the long run,” Hands said.

In general, drastically reducing premiums is more difficult because the industry is regulated and any insurer that wants to increase or decrease rates must be approved by the rate regulator, McGinty said.

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