Auto theft cost Canadian policyholders and insurers more than $1.5 billion in 2023 alone — a 317% jump from just four years earlier. For the average driver, that translates into roughly $100 to $200 added to your annual premium, and far more if you live in a high-theft area or drive a frequently targeted vehicle. Third-party fire and theft (TPFT) insurance sits in the middle of the coverage spectrum: it protects you against liability claims from other drivers and covers your own car if it’s stolen or damaged by fire, but it leaves you on the hook for every other kind of damage. With premiums rising 36.4% over the past decade and theft driving much of that increase, understanding exactly what TPFT does — and doesn’t — cover matters more than ever.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Those numbers explain why TPFT has become a popular choice for drivers of older or lower-value vehicles. You get the legally required liability coverage plus protection against the two biggest non-collision risks — fire and theft — while paying less than you would for a comprehensive policy. But the gap in coverage can be expensive if you misjudge what’s excluded. Here’s what you actually need to know.
The core concept here is third-party fire and theft insurance, often abbreviated as TPFT.
What I tend to notice is that people pick TPFT because it’s cheaper, but they don’t always check whether their car is a common theft target. If you drive a Ford F-150 or a Honda CR-V, the theft risk alone might make the savings less worthwhile.
What TPFT Actually Covers — and What It Leaves Out
TPFT splits into three distinct buckets. The first is third-party liability: if you hit someone else’s car or damage their property, your insurer covers the repair or replacement costs, plus any legal fees. This is the same coverage you get with basic third-party-only insurance. The second bucket is fire damage to your own vehicle — if your car catches fire (excluding arson by you), the policy pays for repairs or a total-loss payout. The third is theft: if your car is stolen and not recovered, or recovered with damage, you receive compensation up to the vehicle’s market value, minus your deductible.
What’s missing is everything else. Collision with another vehicle or a stationary object? Not covered. Vandalism, hail, flood, or falling trees? Not covered. If you back into a pole, you pay the full repair bill yourself. That’s the trade-off for the lower premium.
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| Coverage Type | Third-Party Only | TPFT | Comprehensive |
|---|---|---|---|
| Liability to others | Yes | Yes | Yes |
| Fire damage to your car | No | Yes | Yes |
| Theft of your car | No | Yes | Yes |
| Collision damage (your car) | No | No | Yes |
| Vandalism, weather, falling objects | No | No | Yes |
To put it in cash terms: if you live in Ontario and drive a 10-year-old sedan worth $8,000, a comprehensive policy might cost you $2,200 a year, while TPFT might run $1,600. That $600 annual saving is real — but if your car gets stolen, you’ll get $8,000 minus your deductible (say $500), so you’re still ahead. If you crash it, you get nothing. The math flips for a newer $40,000 SUV: comprehensive at $2,800 vs TPFT at $2,100 saves $700 a year, but a single collision could cost you $10,000 in repairs. The threshold where TPFT makes sense is roughly when your car’s market value is low enough that you could absorb a total loss without financial strain.
Common Mistakes That Cost You Money
Assuming TPFT covers vandalism or weather damage
This is the most frequent misunderstanding. A cracked windshield from a flying stone, a dent from a hailstorm, or a slashed tire — none of it is covered. I’ve seen people pay $2,000 out of pocket for a repair they assumed was included. The only way to cover those events is to upgrade to comprehensive or add an endorsement. If you park on the street in a hail-prone area, TPFT leaves you exposed.
Leaving keys in the car or failing to secure it
Many TPFT policies have a condition that you must take reasonable steps to prevent theft. If you leave your keys in the ignition or the car unlocked, the insurer can deny the claim entirely. The same applies if you leave a running vehicle unattended to warm it up in winter — that’s considered negligence. Always remove keys and lock doors, even for a quick stop.
Not checking whether your vehicle is a high-theft target
Vehicles like the Ford F-Series, Dodge Ram 1500, Toyota Highlander, and Lexus RX Series are stolen at much higher rates. Insurers know this and may charge a higher premium for TPFT on those models — sometimes wiping out the savings versus comprehensive. Before you choose TPFT, look up your car’s theft risk. If it’s on the top-stolen list, the premium difference may be small enough that comprehensive is the better bet.
- Check your vehicle’s theft risk rating (Équité Association publishes lists)
- Install an approved anti-theft device (steering wheel lock, GPS tracker, immobilizer)
- Store key fobs in a Faraday pouch to block relay attacks
- Park in a garage or well-lit area whenever possible
- Compare TPFT and comprehensive quotes for your specific car and postal code
How to Decide Between TPFT and Comprehensive
Step 1: Value your car honestly
If your car is worth less than about $10,000, TPFT is often the smarter financial move. The premium savings over comprehensive will likely exceed the cost of any non-fire, non-theft damage you might face. For a car worth $5,000, paying an extra $600 a year for comprehensive means you’re effectively pre-paying for a total loss every eight years. That doesn’t pencil out.
Step 2: Assess your parking and driving environment
If you park on the street in a neighbourhood with high theft rates, TPFT’s theft coverage is valuable — but you also face higher risk of vandalism and hit-and-run damage, which TPFT doesn’t cover. A steering wheel lock with a 120dB alarm can deter thieves and may qualify for a discount, but it won’t help if someone keys your door. Consider whether your daily driving exposes you to collision risk (heavy traffic, narrow streets) — if yes, comprehensive may save you more in the long run.
Step 3: Factor in upcoming reforms
Alberta will introduce a Care-First auto insurance system in January 2027 with a 5% average premium cap for good drivers. Ontario’s rate increases are slowing — down 2.6 points into early 2025 and another 1.2 points by mid-2025. These changes could narrow the gap between TPFT and comprehensive premiums over the next couple of years. If you’re on the fence, it’s worth getting quotes for both and revisiting at renewal.
If your car is stolen, the process is straightforward but time-sensitive. Call the police immediately and get a case number. Then contact your insurer — most have 24-hour claims lines. You’ll need your vehicle registration, proof of ownership, and any receipts for aftermarket modifications. If the car is recovered with damage, the insurer will assess and repair it. If it’s not recovered, you’ll receive the market value minus your deductible. Keep records of every communication.
- 1Report to policeCall your local police department or file a report online. Obtain the case number — you’ll need it for the insurance claim.
- 2Contact your insurerCall the claims department as soon as possible. Provide the police case number, vehicle details, and any documentation you have.
- 3Notify your lenderIf you have a loan or lease, inform the lender. They may have additional requirements for the claims process.
- 4Cooperate with the investigationThe insurer may ask for more information or inspect the vehicle if recovered. Provide everything promptly to avoid delays.
- 5Receive settlementOnce approved, the insurer will pay the market value minus your deductible. If the car is recovered damaged, they’ll arrange repairs.
Frequently Asked Questions
Does TPFT cover vandalism? ▾
Will my premium increase if I make a theft claim? ▾
Can I add roadside assistance to a TPFT policy? ▾
Is TPFT enough for a financed car? ▾
What if my car is stolen with the keys inside? ▾
How much can I save with TPFT vs comprehensive? ▾
TPFT in a Market Driven by Theft and Reform
Auto theft isn’t going away — police-reported thefts rose 24% between 2021 and 2023, and the federal National Action Plan on Auto Theft is still ramping up. That means TPFT’s theft coverage will remain valuable, but the premium savings over comprehensive may shrink as insurers adjust rates for theft risk. At the same time, provincial reforms in Ontario and Alberta are pushing for more transparency and rate caps, which could make comprehensive more affordable. The smartest move is to reassess your coverage every renewal, especially if your car’s value has dropped or your parking situation has changed.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read How to Choose the Best Car Insurance for High-Value Vehicles.
Sources and Further Reading
Understanding Territory-Based Premiums for Car Insurance — Explains how your postal code affects your rate, which is especially relevant for TPFT in high-theft areas.
Maximize Your Savings with No-Claim Discounts — How to protect your discount when switching between TPFT and comprehensive.
InsuranceXpert (2025). Car Insurance Statistics in Canada. 🔗
Lifetimes Canada (2026). Car Theft in Canada 2026: How It’s Driving Up Your Auto Insurance Premiums. 🔗
Just Insurance Talks (2025). Understanding Third-Party Fire and Theft Insurance in Motor Insurance. 🔗
Schwartz Cohen Law (2025). Third Party Fire and Theft Insurance Explained. 🔗
