What carriers are offering auto customers seeking lower premiums

Car thefts are way up in Canada and that’s got the attention of property and casualty (P&C) insurers.

Thefts have risen particularly fast in the greater Toronto area, Montreal and some other parts of Quebec, noted Paul Gilbody, SVP operations for Central Canada at ClaimsPro.

In some cases, thieves target certain car types simply because they’re easy to steal. “Typically, these are older cars,” he said. “And there are cars that are obviously in high demand, such as SUVs or sports cars.”

Faced with sharply rising annual premiums for certain makes and models, alongside jumps in the inflation rate during the past two years, carriers are exploring options to ease consumers’ financial burdens.

Related: Canada’s top-10 stolen cars

“Some carriers are looking at implementing a surcharge, which some of them are calling a high theft risk premium [or] high theft vehicle surcharge where they’re adding on an additional premium to an auto policy,” Julian Bugeja, senior vice president, private client group at NFP Canada told Canadian Underwriter.

“And then they’ll reverse that and apply a discount if the individual has an approved tracking device — something that can help in the relocation of a vehicle — once it’s installed.”

Carriers are looking for ways to mitigate the user side of potential losses, he added. And some are even proactively reaching out to clients who own certain vehicles that are in high demand among thieves – including Land Rovers, Honda CRVs, Ford F150 pickups, Toyota Highlanders and others.

A recent RatesDotCa report noted insurers’ objective in issuing the surcharge is to recoup rising auto theft claim losses. Each insurer has its own list of which vehicle makes and models are surcharged, said one industry source.

“A wide spectrum of vehicles are being targeted,” Bugeja said. “[Certain] carriers are reaching out to their clientele saying, ‘Given the number of thefts occurring, we are willing to pay for the installation of a tracking device [that will help] in the event the vehicle is stolen. We’ll incur the cost and provide you with a discount.’”

Another savings option

As clients seek ways to reduce premiums, many carriers are also offering discounted premiums for drivers who opt for telematics.

“Telematics track such things as the person’s acceleration, frequency of driving, where they’re driving and [how often they] slam on the brakes,” said Bugeja. “After a while, [the carrier] can gather data as to the person’s driving habits, at which point they can adjust the weights accordingly for that individual.”

While these systems can provide useful data, they also sometimes penalize the habits of specific classes of drivers.

“When they first were launching this, the feedback I was giving to some of the carriers was, ‘You’re monitoring what time somebody is driving the vehicle. So, when you take a doctor or a nurse or a pilot, who may be driving at obscure hours because of their occupation, you’re going to penalize them because they’re driving at two o’clock in the morning,’” Bugeja said.

“They [might] penalize a doctor who is having to speed to the hospital because he’s being pulled into surgery.”

Feature image by iStock.com/Nuthawut Somsuk