How auto theft will affect insurance in 2024

Although the industry is trying to pump the brakes on auto theft across Canada, the national crisis is bound to get worse before it gets better, industry sources predict.  

It means higher premiums for consumers who are already feeling the effects of inflation. 

“Consumers are at a tipping point, and they will soon feel the tangible effects of the auto theft crisis,” says Elliott Silverstein, director of government relations at CAA Insurance said in a release. “If the rate of vehicle theft does not decrease, it will lead to an increase in auto-related costs that could become unbearable for drivers in Ontario, many of whom are already struggling with affordability.” 

The industry paid a record $1.2 billion for auto theft in 2022, and 2023 is on pace to exceed this, sources previously told CU. Final figures have yet to be announced. 

“As we head into 2024, organized auto-theft hasn’t slowed down, but rather worsened,” said Rates.ca in a recent blog.  

The rate aggregator lists auto theft as one of the foremost trends predicted to affect the industry in 2024.  

The industry’s been vocal about the need for auto theft intervention. And while government and other stakeholders have been receptive — the feds recently announced they’re hosting an auto theft summit — the issue is still rampant. 

MP Anita Anand said the federal government plans to focus on the auto theft problem. “Everyone I know has had their vehicle stolen or has a friend who has had their vehicle stolen. We are taking steady action to address the rise of auto theft,” she said during a news conference on Monday. 

Yet, the matter is pressing for the industry. 

“The impacts of auto theft are significant. For the insurance industry, it is the equivalent of addressing a year-round catastrophic incident (like a flood or tornado) with no visible end in sight,” Silverstein said in a release. 

Auto theft’s impact on insurance is compounded by provincial legislation that impedes the industry’s ability to manage rates, the vehicle parts shortage, and repair delays, Rates.ca suggested in its blog.  

Across Canada, the cost of auto insurance averages around $111 per month, according to Ratehub, another rate aggregator.  

And because insurance premiums are influenced by inflation, the price of services and repairs, and claims against the industry, this number doesn’t seem to be getting any lower in 2024. That is, not if prices increase and theft remains rampant.  

 

Feature image by iStock.com/krisanapong detraphiphat