Does my auto insurance policy fully protect me from theft?

The number of vehicle thefts in Toronto almost tripled between 2015 and 2022, according to a recent Canadian Finance & Leasing Association report — and that rampant theft is driving up premiums across the province.

Average auto insurance rates across Ontario cities have surged 12 per cent in 2023 compared to 2021, in part due to the increase in theft, according to Ratesdotca, and the average premium for an Ontario driver is $1,744.

The premium is what keeps your policy in force. But even with such high premiums, you may be surprised to learn that most basic auto insurance quotes don’t completely protect you in the event someone steals your car.

While your insurance will cover the cost of replacing your car, most basic policies will only cover the depreciated value, so it’s unlikely you’ll be able to buy a new one if your car gets stolen. Similarly, under most policies you’ll only be covered for the depreciated cash value of items physically mounted to your vehicle, such as roof racks.

Personal items left in the car often are often not covered, but those would be covered under home or renter’s insurance policies. You would need comprehensive auto coverage, which includes policy add-ons, to protect you from the theft of such items.

Some vehicles are more susceptible to theft, and owning one can raise your premium. While every insurance company compiles its own list of the most-stolen vehicles, Daniel Ivans, insurance expert with Ratesdotca, says SUVs and trucks top these lists.

“If a particular vehicle is stolen a lot and insurance companies are losing a lot of money in terms of claims for thefts of a certain type of vehicle, then we can anticipate that there’s a chance that those vehicles might see a surcharge on renewal,” says Ivans.

To offset this surcharge, some insurance companies are offering significant discounts or outright eliminating surcharges to drivers who install anti-theft tag devices or a club device on their steering wheel.

Morgan Roberts, director of RH Insurance in Ontario, says Ford F-150 and Dodge Ram pickup trucks often rank high on the list of most-stolen vehicles. Roberts says you need to contact your broker directly to make sure your insurance policy covers you for vehicle theft.

If you recently bought a new vehicle or are on the market for one, Ivans and Roberts recommend purchasing a waiver of depreciation. Ivans says this coverage will ensure your vehicle is covered based on the actual purchase price instead of its depreciated value.

Ivans also recommends talking to your broker about “loss of use” coverage. This coverage, also known as OPCF 20, covers the cost of a rental vehicle while your vehicle is being replaced or repaired. Ivans says it pays to have this add-on, as it’s far more affordable than renting a vehicle out-of-pocket. (Depending on your insurance company, the OPCF 20 add-on can cost about $60 to $80 per year, while you can expect to pay almost double that to rent a car per day in Ontario.)

“Bundling your policies together is the best way to keep rates low,” explains Ivans. Otherwise, he recommends looking into usage-based insurance that charges drivers based on factors like mileage and driving behaviours, which can offer savings for good driving habits.

“For theft specifically, the anti-theft tag and steering-wheel club are going to be your two biggest allies depending on the insurance company you’re with,” says Ivans.

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