Two Quebec-based insurance companies have filed a $72 million lawsuit against three of the world's largest automakers, alleging that known weaknesses in vehicle anti-theft systems left hundreds of policyholders exposed to theft and insurers facing hundreds of millions in avoidable claims.
Beneva and its brokerage subsidiary L'Unique General Insurance filed the claim in Quebec Superior Court, seeking to recover payouts linked to more than 2,100 stolen vehicles over a three-year period. Beneva is seeking approximately $56.7 million and L'Unique approximately $14.8 million, though both figures remain subject to change as thefts continue.
The lawsuit named Toyota Canada, Honda Canada and Fiat Chrysler Automobiles Canada, now operating as Stellantis. Toyota accounts for the largest share of the claim at approximately $35.4 million, followed by Honda at $18.4 million and Stellantis at $17.8 million. Eight of the 10 most stolen vehicles in Canada in 2024 were manufactured by these three companies.
The plaintiffs alleged that thieves exploited a specific vulnerability in smart key fob technology, intercepting the wireless signal and using devices readily available online to program a new compatible key directly into the vehicle's system without triggering any visible alarm or forced entry.
The lawsuit alleged the automakers have been aware of these security flaws for several years.
"Despite their knowledge of these security flaws, the defendants continued to sell vehicles equipped with easily defeatable anti-theft systems," the plaintiffs' lawyers wrote in the application.
The Toyota RAV4 and Honda CR-V are among the specific models cited. Anne Boileau-Loiselle, Beneva's spokesperson, said the three manufacturers account for the highest number of thefts recorded by the insurers and that the majority of their models carry a theft rate higher than the industry average.
All three automakers have filed separate challenges to the action, represented by major Montreal law firms. Toyota is represented by Stikeman Elliott, Honda by McMillan, and Fiat Chrysler Automobiles by Borden Ladner Gervais. The grounds for their challenges are yet to be submitted.
The Automobile Protection Association described the lawsuit as a first of its kind in Canada, noting it could open the door to similar subrogation actions by other insurers. Industry observers said the case could reshape how theft-related losses are handled across the automotive sector, with insurers increasingly willing to pursue manufacturers directly where systemic security failures can be demonstrated.
A separate class action is also already underway in Quebec against 13 automakers, initiated by a Quebec motorist whose Toyota Highlander was stolen and authorized by the Quebec Superior Court.
The lawsuit arrives as Canadian auto theft losses begin to ease from record highs, though they remain historically elevated. Theft claims fell 24% between 2024 and 2025, while the value of claims dropped 30%. Despite that improvement, the value of theft claims still reached $723.9 million in 2025, compared with $269.1 million a decade ago, a 169% increase in claim value over ten years.
Theft losses remain far above what many pricing models were calibrated for in the mid-2010s, keeping sustained pressure on underwriting, rating and product design. Many carriers have tightened underwriting on high-theft vehicles, introduced surcharges or minimum deductibles and, in some cases, required additional anti-theft measures such as tracking devices before offering comprehensive coverage. Jevco increased its high-theft risk premium from $500 to $1,500 for targeted vehicles in 2026, while offering to waive the surcharge for policyholders who install an approved tracking system.
The lawsuit coincides with significant federal regulatory activity directed at vehicle anti-theft standards.
In late 2025, the federal government proposed amendments to Canada's Motor Vehicle Safety Regulations that would replace the outdated CAN/ULC 1998 immobilization standard with an updated CAN/ULC 2025 standard.
The Insurance Bureau of Canada welcomed the proposed changes, noting the updated standard introduces a new category of "electronic attack tools" that captures increasingly sophisticated theft methods, including on-board diagnostics key programming tools, vehicle key emulators and key signal relay equipment, precisely the technologies alleged in the Beneva and L'Unique lawsuit.
The federal government estimated the proposed amendments will affect approximately 45 companies, with projected compliance costs of approximately $800,000 spread over 2026 to 2035 and a two-year transition period for manufacturers to adapt.
For insurers, the regulatory proposals and the lawsuit represent converging pressure on automakers from two directions simultaneously, and a signal that auto theft has moved from a pricing footnote to a structural risk requiring action across underwriting, capital modelling and reinsurance strategy.
