Does Auto Insurance Cover Theft?: Everything You Need to Know

Posted on May 24, 2019
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Did you know that in 2016, there were over 1.16 million property crimes reported to the Canadian police? Almost 7% of that -- a whopping 78,710 cases -- was for motor vehicle theft.

As if that's not bad enough, auto theft crimes went up 6% in the country the following year. New Brunswick had it the worst, as it had a 28% increase from 2016.

With car theft crime on the rise, you might ask "does auto insurance cover theft?" This is especially true for those thinking of buying one of the predicted 1.93 million car sales this 2019.

If you’ll be one this year’s new car owners, it's best to ensure your policy will cover you for theft. So, will it?

The simple answer is that it depends. Don't worry though, as this post will go into more detail, so be sure to keep reading!

A Quick 101 on Auto Insurance in Canada

Under Canadian law, car insurance is a legal requirement, wherever in the country you may be living in. For most provinces, $200,000 is the legal minimum third-party liability coverage.

Note that in Quebec though, the least amount of coverage the law allows you to get is $50,000. In Nova Scotia, the required third-party liability coverage is $500,000.

Not meeting these requirements can lead to hefty fines and even license suspension! It can also lower your insurance credit score, which can then lead to higher premiums. Penalties vary from province to province though.

For example, in Ontario, driving uninsured can result in a 12-month license suspension. Your ride may also end up in impounded for up to three months. Furthermore, a first conviction can lead to a $6,250 fine, while a second can cost you up to $12,500.

That’s why it’s best to shop around before buying auto insurance and the new (or used) car itself. This way, your policy will be ready for use as soon as you bring that ride back home from the dealer or seller.

So, Does Auto Insurance Cover Theft? A Basic Policy Won’t

Did you notice how we kept using the term "third-party liability" in the previous section? That pertains to coverage for any injuries or losses you may cause others. This part of the mandatory car insurance policy will help pay for these costs.

The other legally-required auto insurance coverage in Canada is accident benefits. This one helps pays for your medical treatment in case you sustain injuries in an accident. It also provides you with some level of income replacement.

These are the only things covered by a basic Canadian auto insurance policy. If someone steals your car, a basic policy won't provide coverage for its replacement. Car theft in Canada is more common than you think, with one car getting stolen every seven minutes.

What Type of Auto Insurance Coverage Will Cover Theft Then?

Granted, mandatory minimum car insurance coverage is enough to legally operate your ride. But the thought of losing your car should be good enough reason to get more than the required coverage.

The good news is, there are specific optional auto coverage types that cover auto theft. Let’s take a closer look at each of them.

Comprehensive Car Coverage

Comprehensive coverage protects you from non-collision related car damages. Yes, including the cost of repairing and recovering a stolen vehicle. You do need to pay the deductible for this coverage to kick in though.

Depending on the insurer you choose, some items in your car may also get covered.

Let's say you invested in an awesome stereo system for your ride, and a thief broke your car window to steal it. If you have comprehensive coverage, your insurer will cover the cost of the window repair. They may also pay for the stereo replacement or at least part of the costs.

Comprehensive coverage isn't only for theft though; it also covers vandalism. It even helps pay for damage caused by falling or flying objects, such as a rock breaking your windshield. If a fire or explosion damages your ride, it'll also provide some level of protection.

Furthermore, comprehensive coverage protects you from damages caused by hitting an animal. It also provides coverage for inclement weather, such as windstorm, hail, and lightning.

All Perils Coverage

All Perils coverage combines comprehensive and collision/upset coverage types in one package. Plus, it covers losses or damages to the insured car caused by a member of your household. For example, if someone who lives with you steals your car, this coverage will protect you.

The same goes for any of your employees who may steal your vehicle. It also protects you from theft committed by an employee of an auto servicing shop.

The collision/upset coverage part of the policy pays for damages or losses caused by a crash. The collision should be with another object, like a vehicle or trailer attached to your car. That other object should also be under your current insurance policy.

Add-On Specified Peril Coverage

As great as comprehensive and all perils coverages are, they can be quite expensive. If you want to get extra protection only for theft, then you can go for a specified perils coverage.

As the term suggests, a specified perils coverage is coverage for a specific peril. You can get this additional coverage just for theft or attempted theft. If you live in Hamilton or Brantford, where most car thefts occur, this is a smart addition to your policy.

Getting only a car theft specified peril coverage can help you save money, but keep in mind that it will only cover theft and not fire- or weather-related damages or losses.

Are All Personal Belongings Covered by Optional Car Theft Insurance Coverage?

No, and not all comprehensive coverage policies provide any coverage for stolen items. In this case, you may not get coverage if a thief steals your wallet, phone, or GPS in your car.

The good news is, coverage for these items is often provided by a home insurance policy. Not always though, so be sure to ask your homeowner's insurance provider.

Tips to Protect Your Ride from Theft

Did you know that all the top 10 most stolen vehicles in Canada in 2017 were Ford series? Of that 10, the top five make up the Ford F-series.

Now, that doesn't mean your ride is already safe if it's not a Ford. The best way to keep thieves from getting away with your car is to take preventive security steps. Besides, these safety and security hacks can get you a better car insurance deal.

Never Leave Your Ride Unlocked

Otherwise, it will be gone in sixty (or less) seconds. Locking up your car only takes a few seconds, whereas it takes years to pay off a new car.

Keep in mind that the 2017 average transaction price of a new vehicle in Canada was $33,464. Reports for last year and this year aren't in yet, but it's no doubt that the rates are higher. The last thing you want is to keep paying for a loan on a car that you'll never get to use again.

Invest in Anti-Theft Devices

Today's latest car security technology comes with ignition-disabling and steering wheel-locking features. GPS trackers have also improved over the years, making recovery a bigger possibility. Combine that with an alarm system, and you can deter criminals from stealing your ride.

Always Park in Brightly-Lit Areas

Most car thieves are opportunists, so they tend to avoid areas they can get discovered in. These include areas that have bright lights and possibly even security. Don't forget to take your wallet, phone, and other pricey valuables with you.

Ensure All Windows are Completely Shut

This includes your sunroof. Leaving even the tiniest gap in your car windows can already encourage a break-in.

If you tend to bring your pets with you on a ride, take them outside of the car with you. Don't leave them in the car, as this will only require you to open your windows. Never leave them in a fully-closed car either, as it only takes minutes for a hot car to put their lives in danger.

Find the Best Auto Insurance with Theft Coverage Now

As you can see, the answer to your question, "does auto insurance cover theft?", is that it depends. If you get comprehensive or all perils coverage, then yes, your policy will cover car theft. For lower premiums with theft protection, get specified car theft perils coverage. 

What's important is to insure your car as soon as possible so you can drive it legally and at ease. Even if you're still shopping around for a new car, it's best to compare auto insurance during this time too.

We can help make your search for quality yet low-cost auto insurance easier! Ask us for a quote now so we can start looking for the best insurance deals for you.

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