Does Car Insurance Cover Theft?

Picture this: you return to a parking lot after a long day of shopping with your family only to find out that your brand new vehicle has been stolen!

Many Canadians think that they won't get targeted by a car thief; however, it could happen to anyone at any time! Because of this, Canadians need to know how to proceed after their car has been stolen.

As an insurance brokerage, one of the most common car theft-related questions we receive is, "does car insurance cover theft in Canada?".

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That's why we've put this article together! Continue reading to learn more about car insurance covering vehicle theft in Canada.

Does car insurance cover theft in Canada?

If your vehicle is stolen, you may be compensated by your car insurance company, but only if you have the right type of coverage.

For instance, certain forms of auto insurance, like third-party liability coverage, solely cover events that happen on the road. These forms of coverage do not protect drivers from car theft, as theft is generally classified as an off-road peril.

On the other hand, other forms of car insurance coverage (more on these options shortly) cover events that occur off of the road, or both on-and-off road, which means that they can be used to cover expenses related to car theft.

What types of car insurance cover theft in Canada?

There are three primary types of car insurance that drivers can use to protect themselves from car theft-related expenses.

These three types of car insurance are:

• Specified perils coverage
• Comprehensive insurance coverage
• All perils coverage

Does specified perils insurance cover theft in Canada?

Specified perils coverage is a type of car insurance that protects drivers from a variety of different perils, which can include theft and attempted theft.

However, to be eligible for coverage, the peril needs to be clearly listed on your policy. For instance, if you don't have theft listed as a covered peril and your car is stolen, you won't receive any compensation for your loss.

Specified perils coverage is the least extensive but (generally) most affordable option for drivers that want to protect their vehicles from vandalism.

Does comprehensive insurance cover theft in Canada?

Comprehensive insurance coverage is a type of car insurance that financially protects drivers from (almost) all off-road risks and perils, including theft, attempted theft and vandalism.

Comprehensive insurance coverage also covers the following perils:

• Fire
• Wind
• Hail and storm damage
• Falling objects

It's worth noting that comprehensive insurance tends to cost more than less extensive forms of coverage, like specified perils insurance.

Does all perils insurance cover theft in Canada?

All perils insurance is a "hybrid" form of car insurance that protects drivers from on and off-road risks, including vehicle theft.

All perils insurance is the best option for drivers that want extensive protection from theft and a variety of other potential risks. That being said, all perils coverage can be costly.

Be sure to speak with your Surex insurance advisor to learn more about these forms of coverage and to find out which product is right for you.

Do car insurance add-ons cover theft in Canada?

Yes, some car insurance endorsements, like the replacement cost endorsement (SEF 18) can help you recover the "new" price of your vehicle, not the current value.

*Please note that certain aspects of a car break-in, like a broken window, may require separate types of coverage.*

Does insurance cover stolen car valuables in Canada?

Car insurance can cover stolen valuables, but it depends on the type and classification of the item.

For a stolen valuable to be covered by your car insurance, it needs to be attached to (i.e. a physical component of) the car. So, if a car thief steals your stereo, rims, etc., and you have the appropriate type of car insurance, you can receive the actual cash value of the stolen item.

However, if a personal item like a laptop, cellphone, tablet, etc., is stolen from your vehicle, your car insurance policy will not cover the loss. That being said, you may be able to receive compensation through your home or renter's insurance (depending on the type and level of property coverage that you have).

Are luxury cars more likely to be stolen in Canada?

Despite what many drivers think, luxury cars don't get targeted more than other vehicles in Canada. In fact, in 2021, the most stolen vehicle wasn't even a car — it was a truck (the Ford F-150)!

To learn more about the most stolen vehicles in Canada, feel free to check out our blog post on the topic.

How does a stolen car insurance payout work in Canada?

In the event that your vehicle was stolen (and not recovered) and you have the appropriate type of car insurance, your vehicle will be classified as a total loss.

In this case, your car insurance provider will compensate you with the actual cash value of your vehicle. For those that don't know, insurance companies find the actual cash value of an item by comparing the item with similar or identical products on the market (minus the depreciation value). 

So, if you paid $40,000 for your vehicle five years ago, you can expect to receive a portion of your initial investment (not the whole $40,000).

How can you prevent car theft?

Even if you have the appropriate car theft insurance, you should do everything that you can to protect your ride.

Try out these tips if you'd like to lower the risk of being targeted by a car thief:

• Install a security/surveillance camera outside of your home and make sure that it's aimed toward your vehicle 
• Park your car inside a garage at night
• Always lock your vehicle after using it
• Purchase a steering wheel lock or your preferred anti-theft device
• Regularly test the emergency alarm on your vehicle

Save up to 25% on car insurance with Surex

At Surex, we do everything that we can to make it easier for Canadians, like you, to find high-quality insurance quotes from top-rated providers. Whether you're thinking about shopping around for a new provider or are looking for your first quote, we've got you covered.

Contact one of our trusted insurance advisors today to get started and receive your quotes in ten minutes or less! Don't hesitate to ask your advisor about the benefits of bundling multiple insurance policies with one of our carriers.