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HomeCar Insurance ResourcesHow does car theft affect insurance premiums

Car theft can impact insurance premiums in several ways:

  1. Individual Impact: If your own car is stolen and you file a claim with your insurer, your individual premiums may increase. This depends on your insurer and your policy, as well as how many claims you’ve filed in the past. Insurance companies often see policyholders who file claims as a higher risk, which can lead to increased premiums.
  2. Community Impact: If car theft rates are high in your community or city, this can impact your insurance premiums even if you haven’t personally experienced car theft. Insurance companies use statistical data, including crime rates in a specific location, to calculate risk and determine premiums. If you live in an area with a high car theft rate, you’re statistically more likely to have your car stolen, which can lead to higher premiums.
  3. Model-Specific Impact: Certain car models are more likely to be stolen than others due to their popularity, resale value, or the demand for their parts. If you own a model that is frequently targeted by thieves, you may see higher insurance premiums.
  4. Type of Insurance: The type of insurance coverage you have can also be affected by car theft rates. Comprehensive car insurance, which covers theft, can be more expensive in areas or for car models that are at a high risk of theft.
  5. Effect of Anti-Theft Devices: Insurance companies often offer discounts for vehicles equipped with anti-theft devices. This is because these devices can reduce the risk of your car being stolen, which in turn reduces the risk to the insurer.

So, while experiencing a car theft firsthand will most likely increase your premiums, just living in an area with high car theft rates, or owning a car model that is frequently stolen, can also lead to higher insurance costs.

Car insurance rate increases % before and after theft

  1. Toronto: Before Increase – $1,500 / After Theft Claim – $1,725 (15% increase)
  2. Mississauga: Before Increase – $1,450 / After Theft Claim – $1,693 (16.8% increase)
  3. Ottawa: Before Increase – $1,200 / After Theft Claim – $1,392 (16% increase)
  4. Hamilton: Before Increase – $1,400 / After Theft Claim – $1,624 (16% increase)
  5. Brampton: Before Increase – $1,550 / After Theft Claim – $1,820 (17.4% increase)
  6. London: Before Increase – $1,250 / After Theft Claim – $1,450 (16% increase)
  7. Markham: Before Increase – $1,300 / After Theft Claim – $1,495 (15% increase)
  8. Vaughan: Before Increase – $1,350 / After Theft Claim – $1,567 (16% increase)
  9. Kitchener: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)
  10. Windsor: Before Increase – $1,150 / After Theft Claim – $1,322 (15% increase)
  11. Richmond Hill: Before Increase – $1,300 / After Theft Claim – $1,495 (15% increase)
  12. Oakville: Before Increase – $1,250 / After Theft Claim – $1,437 (15% increase)
  13. Burlington: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)
  14. Greater Sudbury: Before Increase – $1,100 / After Theft Claim – $1,265 (15% increase)
  15. Oshawa: Before Increase – $1,250 / After Theft Claim – $1,437 (15% increase)
  16. Barrie: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)
  17. St. Catharines: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)
  18. Guelph: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)
  19. Cambridge: Before Increase – $1,150 / After Theft Claim – $1,322 (15% increase)
  20. Waterloo: Before Increase – $1,200 / After Theft Claim – $1,380 (15% increase)

Who pays for damage caused by stolen car?

The party responsible for covering damage caused by a stolen car can vary depending on the jurisdiction and the specifics of the incident. Generally, insurance companies often bear the financial burden, but how this works in practice can vary from province to province in Canada (assuming that’s what you are referring to).

  1. British Columbia (BC): ICBC (Insurance Corporation of British Columbia), the province’s public auto insurer, provides coverage for theft under its comprehensive insurance policy. If a stolen vehicle is used to cause damage, the claim may be covered by the insurance policy of the vehicle that was damaged.
  2. Alberta: In Alberta, auto insurance is provided by private insurance companies. The vehicle’s owner may make a claim under their own comprehensive coverage for the theft of the vehicle. Any damage caused by the stolen vehicle would typically be covered by the collision or comprehensive coverage of the vehicles that were damaged.
  3. Saskatchewan: SGI (Saskatchewan Government Insurance) provides basic auto insurance for all residents. Similar to BC, if a vehicle is stolen, the owner’s comprehensive coverage would cover the theft. Damage caused by the stolen vehicle would likely be claimed under the insurance of the vehicles damaged.
  4. Manitoba: In Manitoba, MPI (Manitoba Public Insurance) provides coverage for auto insurance. The situation would be similar to Saskatchewan and BC.
  5. Ontario, Quebec, and Atlantic provinces: In these provinces, auto insurance is provided by private insurers. The situation would typically be similar to Alberta, with the vehicle owner’s comprehensive coverage covering the theft and other vehicles’ insurance covering any damage caused by the stolen vehicle.

Will my car insurance rate come back down if the stolen car gets found?

If your stolen car is recovered, whether or not your insurance premiums decrease will depend on several factors:

  1. Claim Status: If your car is found before you have filed a claim or before your claim is paid, your rates might not be affected as there may not be any payout from the insurance company.
  2. Car Condition: If your car is recovered with substantial damage and you’ve already filed a claim, the insurance company may have to pay for these damages, which could affect your premium.
  3. Insurance Company Policies: Insurance companies have different policies when it comes to calculating premiums. Some might adjust your rate based on claims history, while others might not.
  4. Location and Frequency of Claims: If car thefts are common in your area or if you have filed multiple claims in the past, these factors could affect whether your rates decrease after recovery of your vehicle.

In general, if a claim was paid out by the insurance company (for instance, to cover a replacement vehicle), finding the stolen car afterward won’t likely result in your premiums decreasing immediately. Insurance rates usually don’t change in the middle of a policy term; rather, they’d be recalculated at the time of policy renewal. At that point, the insurer will take into consideration your claims history, among other factors.

While the theft of your car might cause a temporary increase in your premiums, many insurance companies use a “claims forgiveness” policy, where the first claim does not result in an increase in premiums. However, this can vary widely between different insurance companies, so you should check with your specific insurer for their policies.

What happens if stolen car is found after insurance payout

If your stolen car is recovered after an insurance payout, what happens next can vary based on several factors, including your insurance company’s policies, the laws in your specific region, and the condition of the vehicle.

Generally, once your insurance company pays you for the stolen vehicle (minus your deductible), the car technically becomes their property. This is because the payout usually represents a “total loss” claim, effectively buying the stolen car from you. Therefore, if the vehicle is later recovered, it usually belongs to the insurance company, not to you.

Here are a few potential scenarios:

  1. The car is found before you spend the insurance payout: In this case, the insurance company may retract the payout, and you get your car back. If any repairs are needed because of damage inflicted while the car was stolen, those would be covered under your policy (minus the deductible).
  2. The car is found after you’ve spent the insurance payout: In this case, the car typically belongs to the insurance company since they’ve effectively bought it from you. They might sell it as a salvage vehicle, or if it’s in good condition, they might sell it normally. However, some insurance companies might offer you the chance to buy it back, particularly if you have an attachment to the vehicle.
  3. The car is found, but it’s damaged: If the car is found and it’s in a bad state, the insurance company will likely handle it the same way they do with other totaled cars. It might be sold for parts, or it could be repaired and sold, depending on the extent of the damage.

The specifics can vary based on the terms of your insurance policy, the laws in your location, and the practices of your insurance company.

About the Author: Valerie D. Hahn

Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.

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