More carriers expected to roll out auto insurance anti-theft surcharges

What should insureds and brokers know?

More carriers expected to roll out auto insurance anti-theft surcharges

Motor & Fleet

By Gia Snape

Several Canadian insurers have introduced incentives and surcharges on their auto insurance policies to combat the rapid rise of vehicle theft.

Though take-up among drivers has been slow, at least one broker sees more carriers rolling out similar strategies soon.

“We’ve reached out to a few of our other company partners [about auto theft premium surcharges], those that haven’t already put something in place,” said Cassie Gilroy, retention manager at Mitch Insurance.

“All of them have said it’s on their radar and they’re talking about it, but they don’t know what strategy they’re going to adopt yet.”

Which carriers have auto premium anti-theft surcharges and incentives?

The add-ons revolve around Tag, a vehicle tracking and recovery Bluetooth device that has been proven effective in impeding thieves’ efforts at circumventing vehicles’ security systems as well as in recovering vehicles after a theft. The system claims to be able to recover a stolen vehicle within 24 hours.

Several insurers have unveiled policy additions involving Tag this year, including Aviva, Chubb, Gore Mutual, Intact and Zenith.

Several offer a discount off a comprehensive premium for vehicles with the Tag tracker installed. The premium discounts offered by Intact, Chubb and Zenith appear to be available for any vehicle, Mitch Insurance noted on its website.

But Aviva, Chubb, Gore Mutual, and Intact each have their own list of vehicles that are subject to surcharges or installation incentives.

Moreover, nearly all the carriers have introduced an annual surcharge for customers with high-theft vehicles that don’t have Tag or another anti-theft device installed.

Aviva Canada CEO Jason Storah recently told Insurance Business that the company is working towards higher take-up of Tag among auto insureds.

“We’re seeing about 25% take-up of Tag,” Storah said. “One of the asks we have going forward is for brokers to push that with consumers because we know that has an impact on recoveries.”

Carriers are taking varying approaches to incentivizing anti-theft devices, and Gilroy stressed that it’s critical for clients to understand they have options.

“The type of anti-theft device they’re requiring, if they are compensating the client in full or in part for installation of an anti-theft device or whether they’re even requiring one, as well the pricing – it’s going to vary by company,” she said.

“Clients can reach out to their brokers and get quotes from other places. Understanding what their company offers as well as what other companies are doing is the best way for them to understand the value and what’s out there.”

How do consumers feel about the auto premium anti-theft surcharges?

The surcharges come amid rising auto insurance rates in many provinces like Ontario and Alberta, so it’s perhaps no surprise that customers aren’t happy.

“People are not pleased with the situation. They do feel especially with tough economic times that it’s unfair for them to have to pay the surcharge,” Gilroy said. “We’re doing our best to make sure our clients understand their personal risk.”

Gilroy added that stressing the inconvenience of a potential auto theft claim could help customers see the benefits of installing Tag in their vehicles.

“Going through an auto theft claim can be long and drawn out,” she said. “I think all claims are inconvenient, but theft claims are especially, because there’s a waiting period to make sure the vehicle isn’t recovered. Then if your vehicle is recovered, there could be damage to it that you have to get fixed.

“I think making sure our clients understand that piece is important so they can make an educated decision as to whether they install this device and what other measures they take.”

Gilroy also pointed out that many customers are hesitant over the scheme, which is aimed at reducing the risk of vehicle thefts.

“We get the impression that [customers] feel like they’re locked into it and that they don’t have any choice,” she said. “Their choice is to either install the Tag device or pay the $500 surcharge, and that’s really not the case.”

But as the surcharges are still fairly recent, Gilroy is optimistic about take up in the future.

“I do expect that as time goes on, we will see a higher a higher uptake of Tag, especially among companies who are offering to pay for the installation,” she added.

Share your thoughts on auto insurance carriers’ anti-theft premium surcharges and incentives below.

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