Auto theft and fraud contribute to higher premiums

About ten years ago, car theft was a big issue.  Fortunately, insurers, backed by the car industry and the police, have tackled auto theft.

Car manufacturers have developed technologies to counter theft and deter thieves. Such technologies include smart keys, ignition interlock, basic marking, tracking systems, etc. As for the police forces, they regrouped and intervened more vigorously. The leaders of the Port of Montreal – which is a hub for the shipment of stolen vehicles overseas (to the Middle East, South America) – have also been involved in dismantling car theft networks.


Amazing results

All of these efforts have had a significant impact on auto theft. From a peak of 15,971 vehicles stolen in 2008 to 4,434 stolen vehicles in 2016, a decrease of nearly 75% – an incredible result!


Resurgence of auto theft and fraud

Unfortunately, this downward progression stopped in 2017 when, there was a sudden increase in auto thefts and the recovery rate of stolen vehicles declined. According to the Insurance Bureau of Canada (IBC), this low recovery rate suggests the involvement of organized crime, which exports them stolen vehicles overseas from Canadian ports and border cities.

Experts also agree that, today, more and more auto thefts involve fraud. The IBC estimates that in 25 to 30% of auto theft cases, owners are directly involved, tempted by greed. Criminal networks target certain models of vehicles and approach the owners and persuade them with a large amount of money in addition to the replacement cost guarantee of the vehicle. It’s also the very high value vehicles that are targeted. As a result, the insurance compensation amounts are higher which often leads to higher auto insurance premiums.


Fraud and its consequences

If you read our article in March 2019 titled "Home insurance fraud contributes to higher premiums", you know that fraud has a big impact on insurance premiums. Not only does auto insurance fraud drive up costs, it also poses serious problems for targeted drivers.


Types of fraud in auto insurance:


  1. Fake accidents: 
    a) Intentional collision. A vehicle is deliberately driven into the vehicle of an unsuspecting driver. 
    b) Acceleration and braking. A motorist brakes suddenly and an innocent driver hits the back of the other vehicle. 
    c) False courtesy. A motorist driving on a public road waves to someone coming out of a parking lot. As soon as the vehicle enters the public road, the fraudulent motorist accelerates and collides voluntarily with the vehicle so that the driver leaving the parking lot appears to be at fault.
  2. Overcharged car repairs. An Aviva investigation revealed the extent of fraud by repair shops or auto body shops. With hidden cameras, Aviva has filmed a video that proves, with supporting images, that repair shops will even cause new damage to vehicles in order to charge more for repairs. Cost of auto fraud for Canadians: $ 2 billion!
  3. Dishonest towing companies. The Aviva investigation also denounces the practice of some tow truck operator who charged for towing and storage services that never took place. In addition, some auto repair shops pay a referral fee to tow truck operators to bring them the damaged vehicles. These tow truck operators and unscrupulous repair or body shops can even inflate their fees. And everyone pays!


Tips to avoid these scams:

  • Beware of drivers who follow you too closely, cut you off or let you pass a little too easily, especially if they are accompanied by at least two other adult passengers, who can be witnesses.
  • Fill out an accident report and gather detailed information: other driver's name, driver's license number, plate number, insurer's name and insurance policy number, as well as the name and telephone numbers of passengers and witnesses. Take pictures and call the police.
  • Refuse to sign any document or accept anything at the scene of the accident.
  • If you suspect insurance fraud, contact your local police.
  • Then contact your insurer to report the accident.
  • If your car needs to be towed, choose a reputable towing company and find out where your car will be brought.
  • Know that you do not have to have your car repaired at the garage where the car was towed. If you do not know a repair or body shop near you, ask your insurer for advice. If you are insured with Aviva, take advantage of our Première network, a network of carefully selected repair shops who provide customers with priority service in a workshop near their homes, and guarantee the quality of repairs for as long as you  own the vehicle.


Take the time to report fraud

Help capture the fraudsters. If you are a victim of or witness to insurance fraud or crime, or have any information about it, do not hesitate to contact the local police or the Insurance Bureau of Canada (IBC) at 1-877-422-8477. Together, we can fight this issue and help stabilize auto insurance premiums.




Journal de l’assurance – Vol automobile : un cas sur quatre est frauduleux, mars 2018 (article in French only)

Aviva Website - Fraud report

Global news – Organized crime behind surge in Canadian vehicle thefts, auto insurance

Financial Services Commission of Ontario – Tips for avoiding tow truck and storage scams


The content in this article is for information purposes only and is not intended to be relied upon as professional or expert advice. Aviva and the Aviva logo are trademarks of Aviva plc. and are used under licence by Aviva Canada Inc. and its subsidiary companies.