According to the Insurance Bureau of Canada, auto theft results in a $35 increase in each policyholder’s premiums. In addition, another $1 billion is spent annually on costs related to policing, court proceedings, and deductibles. In other words, the problem affects everyone, even if the resulting costs are small enough to escape notice.
Many consumers are unfamiliar with how auto insurers adjust their policyholders’ rates to mitigate the loss. We’ll address this issue below. You’ll learn how insurance companies evaluate the likelihood your vehicle will be stolen. We’ll also provide a few suggestions regarding how to prevent auto theft, and what to do in the event it occurs.
Auto Theft And Your Comprehensive Coverage
If your vehicle is stolen, the loss is covered by the comprehensive portion of your policy. This does not necessarily mean your insurer will send you a check for the replacement value of your car. Much depends on your coverage limit and deductible.
For example, suppose you own a 2011 Mercedes-Benz CL, a car valued at over $100,000. Further suppose your comprehensive coverage limit is $75,000, and your deductible is $1,000. If your car is stolen, you’ll receive a check from your insurance company for only $74,000. You’ll be responsible for covering the remaining $26,000.
Also noteworthy, there’s a good chance the comprehensive portion of your annual premiums will increase after your claim has been paid. One option is to drop the coverage, a good strategy for lowering your rates if your car’s replacement value is low. Another option is to purchase a vehicle that insurers consider less likely to be stolen.
Getting A CLEAR View Of The Potential For Auto Theft
Auto insurance companies rely on a ratings system that assesses the potential for claims-related losses – including, but not limited to auto theft – for each make and model. It is called the Canadian Loss Experience Automobile Rating (CLEAR) system. Vehicles are categorized into groups based on the risk they pose to insurers. Each is given a rating.
Consumers who purchase cars that have a low CLEAR number are statistically less likely to have their vehicles stolen. Consequently, their insurers may be inclined to lower the comprehensive portion of their premiums.
Some vehicles are less popular with thieves, but still associated with a high claims loss experience due to other circumstances (e.g. injuries stemming from collisions). While such vehicles may lower the comprehensive part of your annual premiums, they might raise the cost of other coverages. Keep this in mind when looking at the least stolen cars in Canada.
Preventing Your Car From Being Stolen
The best solution is to prevent your car from being stolen in the first place. First, if you intend to leave your personal belongings in your car, make sure they are out of sight. Cover them or place them in the trunk. If a thief observes a brand new laptop sitting on your passenger seat, the temptation to take it may be irresistible. Also, make sure you have a property insurance policy to cover your personal items since your auto insurance coverage is unlikely to do so.
Second, never leave your vehicle with the engine running. An experienced thief can take your car within seconds. Make doing so difficult. Roll up the windows, lock the doors, turn the engine off, and take your keys with you.
Third, avoid parking in dark or isolated places. Such settings invite car thieves since they can work without fear of being noticed.
Fourth, if your vehicle was built in 2007 or afterward, it is equipped with an immobilizer. This is a device that automatically cuts important circuits necessary to start your engine. It makes stealing your car more difficult. If your vehicle was built prior to 2007, it may lack such a device. Consider installing an aftermarket unit.
What To Do If Your Vehicle Is Stolen
Once you realize your car has been taken, contact the police to file a report. Ask the attending officer for a report number. Then, call your insurance company to file a claim (assuming you have comprehensive coverage). The representative will ask you to provide the police case report number along with various details about your vehicle. He or she will then explain the reimbursement process based on your coverage.
Auto theft is a persistent problem that is unlikely to go away in the foreseeable future. Realize that insurance companies calculate their policyholders’ premiums differently, even though they refer to the same CLEAR numbers. For this reason, always request quotes from several insurers to make certain you find the best coverage at the lowest rates.