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When you own a car, you must sign up for an insurance policy. In Ontario, doing so is mandatory. However, shopping for the right insurance can be time-consuming, and there are many details and questions that need to be considered. One frequent question is whether car insurance covers theft?

The answer to that important question will depend on the insurance coverage that you choose. Do note that there are many types of car insurance that you can buy and the only way to know if your car is insured against theft is if you read the fine print.

The most common car insurance add-ons are for collision or upset. Among all add-ons, it is the most basic kind that will pay for any damage sustained by your car, whoever or whatever causes it. This insurance will protect your car from any accident that may happen along the way. However, it will not cover theft.

What type of insurance covers car theft in Ontario?

Protection against theft is included in special types of car insurance. If this is the coverage that you want, you must be ready to pay extra for it. Each insurance provider may have other names for it, but it is referred to as comprehensive car insurance coverage.

Comprehensive car insurance will pay for all other insured damages to your vehicle, such as vandalism, fire, and theft, but it may not cover collision damage. This is because it is already covered by your default car insurance. If you want to protect your car from theft, you have to buy an additional option for it.

Alternatives to Comprehensive Car Insurance

If you don’t want to get a comprehensive car insurance plan but still want theft protection for your car, you might have to attach a specified perils add-on to your basic car insurance coverage. This won’t cover your car for all possible damages, but it will protect you from theft if that’s what you decide to buy. Specified perils insurance will only pay a particular coverage that is included in the plan. By choosing this option, you’ll get the cheapest deal, but not necessarily the best coverage.

A good example of specified perils coverage is TD’s Replacement Cost Solution. It is a car insurance option for Ontario residents, to get their car protected from theft or serious accidents leading to the total loss of their vehicle. The coverage will replace the insurer’s car if it is declared irrecoverable. The insured’s eligibility for this type of coverage will vary.

Do Theft Rates in My Area Affect Auto Insurance Rates?

Car theft is a legitimate concern in Canada. It costs the government, insurance companies, and the police an estimated $1 billion on a yearly basis. Car theft is more common in cities along waterways like Toronto, Montréal, or Vancouver. About 30% of cars stolen in Canada are shipped to the US. The identification numbers of stolen vehicles are falsified and resold in parts to unsuspecting buyers. If you live in any of these cities, you are likely concerned about the safety of your car and the impact on your auto insurance rate. Read on to learn the effects of high auto theft on your insurance rate.

How do auto-theft rates affect your insurance?

Vehicle theft costs insurance companies approximately $600 million annually. These costs are offset by policyholders through car insurance premiums. One of the factors considered by insurance companies in calculating your premium includes your current address. If you reside in a neighborhood that is notorious for car theft, you will likely pay more for your car insurance than if your neighborhood has a lower rate of car theft. If you are moving from a smaller town to a larger city like Toronto, Vancouver, or Montréal you will probably face a higher insurance rate on your car insurance.

Is Your Unlocked Car Theft Protected?

unlocked car

Leaving a key in your car for those times you forget or need a second key when you’re miles from home does make life easier. Unfortunately, it makes a car thief’s life easier also. There are only so many places to put an extra key where it can be retrieved quickly. One of the favorite spots – under the car mat – requires that at least one door is left open. When you leave your car unlocked you’re voiding your insurance coverage, right? Even worse if there’s a key waiting. Well, as it turns out, that’s probably not the case.

Unlocked Car Theft Insurance Provisions

As it turns out, there aren’t any clauses in standard car insurance coverage that void coverage if your car is unlocked or keys are left behind. Even if your keys are in the ignition and you leave the car running, your insurance company is probably going to pay out a settlement if you’re a victim of car theft. At least the first time. It’s only when a motorist develops a history of car theft that insurers may take further steps. This could include a deeper investigation into the claims or, in the worst case, a cancellation of the driver’s policy. For the average driver though, there’s no concern about denial of claims, even in the provinces with public insurance run by the governments.

Types of Auto Theft

Car thieves come in two general varieties: the organized car theft ring and the opportunist. The target of the theft ring is the high-end vehicle. Thieves are sophisticated and don’t leave their success to the chance a hidden key may be present. Their techniques include hijacking the signals of wireless key fobs, cloning keys or simply removing a car on a flatbed tow truck. For a dedicated pro thief, your car is as good as gone if he decides to target it. Unlocked car theft is almost irrelevant.

The opportunist is the greater general threat to any motorist. Even beaters can be targeted for parts or if the thief is simply tired of walking. The old days of hotwiring are gone. Since 2007, when Transport Canada mandated the installation of anti-theft engine immobilizers, cars won’t start without recognizing a chip in the ignition key fob. Even an unlocked car won’t go anywhere without the key.

That strategy is paying off. None of the most stolen vehicles in Canada in 2015 had anti-theft systems installed. However, in 2014, about 45,000 car thefts in Canada happened because car keys were easy to find. So though you don’t need to worry about insurance coverage if you leave a spare key in your car, you are exposing yourself to needless aggravation, the inconvenience of settling the insurance claim, and potential increases in future car insurance premiums.

Ways to Prevent Car Theft

Regardless of the type of vehicle you drive, it is important that you take preventive steps to ensure the safety of your car. Car thieves are not only interested in luxury cars but also economy cars, so keep the following guidelines in mind:

#1 Always Lock Up

Ensure that your car is always locked, even if you will only be away for a minute. Taking a few seconds to lock your car can save you from weeks of paperwork and headaches. Never leave your car running or keep keys in the ignition while you’re away from it.

#2 Park In Well-Lit Areas

Parking your car in a well-lit area protects your car. A car thief is less likely to tamper with a car parked under a bright light because it increases their risk of being caught. Parking in areas that are poorly lit or hidden from the public eye sets up both you and your car for potential danger. When paying to park in a large parking lot or garage, leave just the valet key or the ignition with the attendant. Ensure that no other personal information is attached. Also, keep this in mind when you take your car for repairs.

#3 Shut Windows

Keep your windows and sunroof shut. Leaving windows open encourages break-ins. Many keep a spare key on or near the car, in case they lock themselves out. Thieves know exactly where to check for a spare key. Consider keeping your spare key in another location.

#4 Don’t Leave Valuables in the Car

Your car is a dangerous place to leave valuable items. Suitcases, shopping bags, laptop accessories, smartphones, and GPS devices attract thieves. Make sure you keep all valuables out of sight in the trunk if you must leave them in the car for a short time.

#5 Anti-Theft Devices

One way to deter car thieves is by installing alarm systems. You can also install steering wheel locks and car-disabling locks for the ignition and other systems. GPS tracking devices will help improve the chances of finding and recovering a stolen car. A vehicle immobilizer can also help protect your car should a thief bypass the ignition system. You can install collars, j-bars, or clubs (which lock to the steering wheel column to prevent the wheel from turning). Having an anti-theft device installed on your car can also earn you a discount on your auto insurance.

#6 Use a Smart Key

When looking to purchase a car, check models with smart keys. These models have unique computer chips that cannot be altered or duplicated. The ignition will never start without that particular key.

#7 Comprehensive Insurance Coverage

Comprehensive coverage will help cover the cost of replacing a stolen vehicle. Comprehensive coverage is optional (unless the car is leased or financed), but you may wish to add it if you live in a high-risk neighborhood.

#8 Common Sense

Use common sense. Do not ignore your instinct. If you see someone loitering around the parking lot, or you feel like the safety of your car is jeopardized, park somewhere else.

As you cross the parking lot after a long day of work, the last thing you want to find is an empty parking spot where you left your car that morning! Cases of car theft have risen in recent years. According to an estimate, about 699,594 cars were reported stolen in 2013. Before you panic, there are practical ways to prevent this from happening to you. We’ve gathered eight helpful tips to prevent auto theft.

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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