P&C industry responds to updated anti-theft standards for cars

Canada’s car insurers are welcoming the federal government’s recent update to motor vehicle safety regulations, which now strengthen car anti-theft protection standards to include electronic methods of attack.

“The property and casualty insurance industry has long advocated for stronger regulatory requirements to prevent vehicle theft,” Insurance Bureau of Canada said of the proposed legislative amendments Jan. 5. “Over the past 10 years, auto theft in Canada has increased dramatically.

“One of the causes of this decade-long increase is that vehicles in this country have become too easy to steal. Modernized anti-theft standards are essential for making vehicles more secure and discouraging car thieves.”

Electronic anti-theft standards

The federal government is now proposing to ‘modernize’ its regulations to include the CAN/ULC 2025 motor vehicle safety standard, which adds a new category called “electronic attack tools.” Car manufacturers use this standard to test vehicle immobilization systems.

“More advanced attack tools have emerged and represent new vehicle theft methods over the more rudimentary tools that were commonplace when the [Canadian Motor Vehicle Safety Standards] CMVSS 114 was last updated (i.e., methods/tools that criminals could use to break into a vehicle, such as a screwdriver and wire cutters),” as the government explains in Canada Gazette, where proposed regulations are published.

“These advanced attack tools, often referred to as electronic attack tools, can include devices such as on-board diagnostics key programmers (i.e., tools used to program new or replacement car keys by plugging into the on-board diagnostics port of a vehicle), emulators (i.e., devices that allow a user to mimic or emulate car keys for certain vehicle models), and key signal relay equipment (i.e., tools that allow a thief to capture the car key’s signal and transmit it, allowing a second thief near the vehicle to transmit the signal to a receiver and start the vehicle).”

Related: Transportation minister looks for provinces, territories to collaborate on car thefts

The Government of Canada notes the proposed new standard brings Canada’s laws into line with international standards for car theft protection.

The Canada Motor Vehicle Safety Standards [CMVSS] are a set of mandatory regulations enforced by Transport Canada to ensure new vehicles and equipment sold in Canada meet minimum safety performance requirements for things like brakes, lighting, tires and structural integrity.

Manufacturers must certify their products comply with these standards to sell them in the Canadian market,

Car manufacturers will have a two-year transition period to become compliant with the new CAN/ULC 2025 standard.

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The government says its proposed amendments are anticipated to affect 45 companies. Projected compliance costs for car manufacturers are estimated to be about $800,000 over a 10-year time frame between 2026 and 2035.

The public consultation period ends Mar. 12, 2026.

When updated in 2021, the CMVSS 114 standard allowed new and emerging technologies such as keyless entry, remote start systems, and key replacement systems. The requirements outlined restrictions and limitations to prevent thieves from disabling the immobilization functions.

However, in 2023, the cost of insurance claims for replacing stolen vehicles in Canada skyrocketed to a record-breaking $1.5 billion, IBC data shows. That was the second year in a row auto theft claims costs had topped $1 billion. (Between 2018 and 2021, auto theft claims costs averaged $556 million annually.)

Consequently, Ottawa held a National Summit on Combatting Auto Theft on Feb. 8, 2024, which included several representatives of the P&C insurance industry. After the summit, the federal government released a National Action Plan on Combatting Auto Theft.

Updating Canadian Motor Vehicle Safety Standards [namely, CMVSS 14] is among many recommendations included in the action plan.

Équité‘s take

The government’s move is a victory for Équité Association, an industry body dedicated to curbing insurance fraud, including fraud related to car theft.

“The proposed…updates are a critical step forward in bolstering public safety across Canada,” said Bryan Gast, national vice president of investigative services at Équité. “It is vitally important that these standards keep pace with technology, criminal sophistication, and international best practices by addressing existing vulnerabilities.

“I thank my fellow members on the ULC Standards Technical Committee on Vehicle Theft Deterrent Equipment and Systems who provided deep expertise that shaped the updated standard. The collective knowledge of this group has been critical to strengthening these regulations, a vital component of a comprehensive strategy to reduce vehicle theft.

“These proposed amendments not only protect Canadians but also serve to disrupt the organized crime groups that rely upon vehicle theft to fund illicit activities.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.