While rising auto theft is dominating the headlines, that’s not the only thing rising: so are insurance rates. Many car dealers, particularly those in high auto theft regions, are seeing big spikes in their garage insurance rates. Consumers are also feeling the pinch with higher auto insurance rates and steep surcharges — particularly on higher risk vehicles.
To help fight the problem, a host of suppliers are now offering next-generation stolen vehicle recovery technologies with advanced technology and effective vehicle recovery rates. The insurance industry is being accused of moving too slowly to recognize these new devices and not offering dealers and consumers any insurance relief. Suppliers and auto dealer associations are mobilizing to increase the pressure on insurers.
Tim Reuss, President and CEO of the Canadian Automobile Dealers Association (CADA), said the insurance industry needs to provide more clarity and transparency. “CADA is calling for insurance companies and insurance regulators to expand rebates to other leading brands. In a November 2024 submission to the Financial Services Regulatory Authority of Ontario (FSRA), CADA made clear the importance of fairness and the cost implications to both the dealers and consumers from the current restrictive insurance company practices.”
To help dealers fight rising rates and protect their vehicles, CADA’s garage insurance committee undertook its own extensive view of the available dealership lot management and vehicle recovery technology technologies on the market, and decided to back RecovR, a product developed by the global multinational firm the Kudelski Group, which features a host of advanced technologies for dealers to manage their inventory and help law enforcement recover stolen vehicles. But it can be an uphill battle to have these new products recognized by insurers.
In its submission to FSRA, CADA wrote: “CADA believes that FSRA should be considering stolen vehicle rates” and take into account “measures taken by consumers to protect their vehicle” when conducting reviews of fair pricing practices. “These preventative measures by consumers include expanding access to vehicle tracking and recovery devices that can be installed in vehicles and allowing new vehicle security companies into the Ontario marketplace with incentives to reduce consumer insurance costs when taking steps to protect their vehicles.”
RecovR app
“While CADA has chosen to partner with Kudelski IoT on RecovR, the association believes that what is most important for consumers across the province is the ability to select the theft protection system that best fits their needs. FSRA and the Ontario government must work quickly to allow Ontario drivers the ability to not only purchase a vehicle tracking device from any of the industry leaders but also provide consumers with cost saving and insurance benefits that will promote the use of these devices, protect vehicles across the province, and provide Ontarians (with) much needed relief on their expenses.”
Brent Ravelle
For the better part of a year, a franchised new car dealer named Brent Ravelle from Listowel, Ontario, has been sounding the alarm about rising garage insurance rates for car dealers and auto insurance costs for consumers. Ravelle had the misfortune of having several vehicles stolen from his dealerships. He said he then spent thousands of dollars installing new fencing and installing security systems to fortify his dealerships.
He then searched for stolen vehicle recovery technology that he could install on his entire vehicle inventory. He found a high volume product called CarRX by ELO GPS, from a U.S.-based provider that had already been installed on 4.5 million vehicles across North America.
But this still wasn’t enough to satisfy his garage insurance provider, who Ravelle said didn’t provide him any clarity on what his new rates would be — only offering to insure him month to month. Eventually, he dropped them and found another provider that would recognize the efforts he had made to reduce his, and their, risk.
CarRx App
Ravelle liked the product so much, he negotiated the rights to sell the device in Canada and now distributes it to dealerships under the CarRX Canada brand. He then forged various partnerships with other resellers including Sym-Tech Dealer Services for the dealership lot management and as a sell through product to consumers via a dealership’s F&I office. The product also caught the attention of another partner, Pitcher And Doyle, which now offers it to garage insurance policy clients.
The challenge, though, is that the landscape for dealers and consumers to discover which of these vehicle recovery devices are recognized by their insurer — or not — is a complex issue.
Some insurers publicly support the TAG vehicle recovery technology, and promote rebates they will offer if consumers install that technology. Other insurers recognize an additional supplier, KYCS, and some insurers like CAA will offer consumers discounts if they install immobilizer devices or use the Club steering wheel locking device.
When consumers contact their insurers or brokers looking for a rebate for their efforts, some are told the vehicle recovery product their dealership sold them isn’t on “the list.” This can lead to a bad customer experience when they return wanting their money back or the device removed — which has happened. “The insurance industry needs transparency,” said Ravelle. “Consumers want transparency.”
Ravelle said he’s not only advocating for the product he represents, he just wants to see dealers and consumers have the choice to pick products that suit their needs. As a single dealer, he said he can only push the issue so far, and said he’s pleased to see CADA, the national auto dealer association and MRVO, his provincial dealer association, getting involved.
Todd Bourgon, Executive Director and CEO of the Motor Vehicle Retailers of Ontario (MVRO) said the insurance industry shouldn’t be picking any one technology over another and forcing dealers and consumers to use it — particularly if they are urging them to get the technology installed at an aftermarket service provider that competes with dealers, like Speedy Auto Glass.
Bourgon said the insurance industry already offers consumers rebates if they install winter tires, but they don’t mandate that consumers have to use only one brand of tire.
“Whether you’re a consumer or a dealer, everybody in this country is rewarded with some sort of a discount by their insurance carrier if they put winter tires on their car, because it’s proven that they’re more effective in snow and they cause less accidents,” said Bourgon. “So there’s a reward for that. The same logic should be applied when somebody installs a theft deterrent device.”
Bourgon said it’s unacceptable to expect consumers to navigate the options on their own. He said when a car buyer calls their insurer, they answer the standard questions about their vehicle. If they say they have installed a vehicle recovery device, imagine if they are then told: “What brand is it? I’m sorry, we don’t recognize that. So now your policy’s going to have a $500 premium on top of that. In my mind, that’s absolute non-transparency to the consumer. It takes consumer choice out of the equation. At the dealership level, it’s taking away the ability for them to offer different products that consumers may want.”
Bourgon said dealers are very savvy when it comes to understanding the factors that are driving their insurance costs, and the insurance industry and dealers need to work together to find solutions that work for both parties.
It’s no secret why insurers are jacking up rates: the Insurance Bureau of Canada (IBC) said Canada’s private insurers paid out $1.5 billion theft claims in 2023 — and that’s up 254 per cent since 2018. In Ontario, auto theft claims increased by 524 per cent in that time period, surpassing $1 billion dollars. Canadian auto dealer reached out to the IBC to clarify the industry’s perspective on recognizing stolen vehicle recovery devices and offering discounts. They provided us with a written statement on the issue:
“Insurers have taken proactive steps to mitigate the significant increase in auto thefts and, in many cases, have been incentivizing consumers to take prescribed steps to mitigate the risk of theft. This includes some insurers recommending the installation of approved tracking devices to help reduce theft and improve recovery rates when vehicles are stolen.
Each insurer is different and has a unique approach to combating the auto theft crisis, and are clear about which aftermarket tracking technologies they recognize. If in doubt, please reach out to your insurance representative with questions.
Before installing any aftermarket anti-theft technology, always be sure to contact your insurer to find out more about the incentives they offer.”
We also asked the IBC to provide more details about the process the insurance companies use to recognize one device or another. Their response was as follows: “Every insurer will make business decisions based on their own considerations.”
Steve Clelland
Steve Clelland, Vice-President of iA Dealer Services Ancillary Products, has also been wading into the cloudy world of insurance technology approvals. He’s had issues right down to the insurance broker level, where the rubber often hits the road. Clelland’s company represents a product known as KYCS, also offered as OEM branded products like Honda Plus Locate or Acura Plus Locate.
After meeting separately with all the insurance carriers, Clelland’s firm has managed to have all but two of them recognize the KYCS devices. But even that formal recognition from the insurance firms doesn’t necessarily mean anything when it trickles down to the insurance broker level. Clelland said some of his clients from approved insurers still have brokers reject the devices — so much so he has had to hire a person just to sort out the rejected cases.
KYCS Range Finder
“We even have cases where we have to send the approval letter from the primary insurer like TD Insurance, Royal Bank, Desjardins, or whoever to the broker and say, ‘here’s the letter from your own insurance company.’ We have one person on our team that does just that,” said Clelland. “It’s an added expense that I’d rather not have to deal with.”
“So it’s still the wild west,” he said. “Everybody’s fighting for real estate and dealers are looking for solutions to stop people from walking away from deals.”
Clelland said the best thing for the industry would be to develop or agree upon some level of standardization for the products. “So at least the insurance companies had something to measure the technology against,” said Clelland.
Freddy Marcantonio, Director of Business Development from TAG, said his company has been in the vehicle recovery business for 30 years, and their technology is tried and true and accepted by the insurance industry. He said the growth in auto theft in Ontario has prompted a flood of new vehicle recovery tracking entrants to the market, but that his company’s home province of Québec has a lot of experience tackling auto theft.
“Québec doesn’t do much right anymore, but there’s one thing we know is auto theft,” he said. “The insurance companies in Québec do a phenomenal job of managing the risk…They know which products work to protect their portfolio and which products don’t work.”
Marcantonio said many car dealers in the province have been installing TAG and promoting the product to their customers for years. He also said some companies are offering products that use GPS technology and that this won’t work with sophisticated car thieves who can easily jam that signal. Marcantonio said the TAG system uses a layered approach that includes vehicle window etching to signal to thieves the vehicle has TAG tracking devices installed.
He said he’d support a committee being formed to vet and test the various devices on the market. “Yes, definitely. And I’d love to be part of that. I have no passion for my product. I have a passion for stopping auto theft.”
