Auto-theft tracking devices and car insurance

Car thefts are out of control across Canada. The latest numbers say that a vehicle is stolen in Canada every six minutes. That works out to a whopping 87,600 cars, or one out of 299, every single year. Many of these cars end up in shipping containers, destined to be exported and sold to unsuspecting customers overseas.

In response to the growing crisis, some insurance companies have begun raising premiums for owners of the most-stolen vehicles in Canada unless they install an “approved anti-theft tracking system” known as TAG.

What are these devices and how do they prevent theft?

The anti-theft tracking device insurers are asking car owners to install is called TAG, and is the product of a company based in Montreal. The system costs $400 to install and allows the company behind TAG to track a stolen vehicle anywhere in North America.

The technology involves placing multiple wireless devices in hard-to-reach areas of the vehicle. Each device is self-powered and emits a signal with a unique identifier code that can be read from a distance by a receiver – similar to the way a transponder works for electronic toll payments.

When a vehicle is stolen, TAG uses a network of receivers to listen for a signal from the stolen car. These receivers can be found in other vehicles, as fixed infrastructure, and even in aircraft. As location data is received, it’s given to local law enforcement agencies who can locate and recover the car. If the car is dismantled before it’s located, certain components can be identified making them harder to buy and sell. 

When an anti-theft tracking device is installed in your vehicle, the installer will etch a small logo into your side windows. Thieves are less likely to steal a car if they know it can be tracked, especially by these types of devices that can’t be easily disabled or overridden like a built-in GPS system.

Also read: Car theft: What happens if your stolen car is actually found?

Is an anti-theft tracking system worth the cost?

Nobody wants to drop $400 or more on an anti-theft device, but it appears that having TAG installed in your vehicle is worth the cost, especially if you’re at high risk for having your car stolen. It has been proven to be highly successful at limiting the impact of theft in the Quebec car insurance market.

For those at the highest risk of auto theft, who live in certain postal codes and drive commonly targeted vehicles like Honda CR-V, Lexus RX and Ford F-150, it appears TAG will soon be as good as mandatory. For those looking for Ontario car insurance, several companies have started offering to install the system for free for applicable customers, and promised to add a $500 annual surcharge for those who don’t. So in order to keep the cost of your car insurance more affordable you will need to install the TAG system.

Some insurance companies have also started offering discounts to all who use the system, ranging from 10% to 30% off the portion of their comprehensive auto insurance premium, for a total savings of around $15 to $45 per year.

The Government of Quebec has already mandated TAG for certain vehicles and locations, and as we start to see the program tickle into Ontario it stands to reason that if it continues to be successful other provinces or the federal government will follow suit and adopt similar rules.

What else can I do to prevent my car from being stolen?

Équité Association, an organization of Canada’s top insurance companies, recommends using a “multi-layered” approach to deterring thieves.

• Use common sense. Many car thefts are simply crimes of opportunity. Take those opportunities away by always locking your doors and rolling up your windows, parking in a secure area when possible, and never leaving your car running unattended.
  
  
• Protect your key FOB. Keyless entry is a great feature for many new cars, but thieves are getting better at copying wireless car keys – even through your front door. Keep your car key away from the front door and store it in an RFID-blocking pouch so that it can’t be copied. Check with your municipality or local police department to find out if you can get one free of charge.
  
  
• Use anti-theft devices. The harder a thief has to work to steal your car, the less likely they are to try. Audible alarms, steering wheel locks, and identification markers all contribute to a lower risk of auto theft.
  
  
• Install an immobilizer. Immobilizers have been a required standard feature for new cars in Canada since 2007. While they’re less effective than they once were, installing one in your older car may help reduce the chances of it being stolen.

Why do I need to worry about my car being stolen if I have insurance?

If you have comprehensive insurance coverage (an optional form of coverage), your car insurance policy will pay to replace your car after a theft. But while insurance is an important part of your anti-theft strategy, it can’t do everything. Having your car stolen will still be a big headache, and cost you more than you expect. 

• You’re on the hook for the deductible. Your car insurance deductible refers to the amount you agree to cover yourself before insurance kicks in. Most Canadians choose a car insurance deductible of around $1,000, which is more than you probably want to part with.
  
  
• You still need a car. Your car insurance policy may include loss of use coverage, which pays for a rental car you can use temporarily while you work on getting a new vehicle, but it may not be enough. CityNews reports that the wait time for a new car is still around two and a half months, but loss of use coverage is typically limited to a total of $1,500.
  
  
• Some things can’t be replaced. While your car insurance policy may pay to replace the car itself, it’s unlikely to extend to the things you leave in it. Personal valuables might be covered by your home insurance policy under the contents insurance coverage, but you will have to make a separate claim, deal with a separate deductible, and face a potential increase in your premium.
  
  
• You could lose your insurance coverage. While your insurance premium isn’t likely to go up all that much after your car is stolen, there are other consequences to worry about. If you lose multiple vehicles to theft, your car insurance company could refuse to renew your comprehensive coverage or decide to cancel your policy altogether.

Keep in mind you might not even have coverage for theft at all if you choose the minimum auto insurance policy for your province. Be sure to add comprehensive coverage to your policy to protect your car in the event of theft, fire, vandalism, or other damage not caused by a crash.

The bottom line

The first recorded car theft happened in 1888, over 20 years before Ford introduced the Model T. Many anti-theft technologies have come along since then, and determined thieves have defeated them all – from the humble door lock to the electronic immobilizer. TAG won’t be the last such invention, but it’s the best we have right now and it represents this country’s best chance to get auto theft back under control.

Also read:

• Car theft: What happens if your stolen car is actually found?
• The top 10 most stolen vehicles in Canada
• The best electric vehicles in Canada in 2023
• Understanding primary and secondary driver insurance