A legal battle has begun between two Quebec insurers and three major automobile manufacturers. Honda Canada, Toyota Canada and Fiat Chrysler Automobiles (FCA) Canada are contesting the $71-million lawsuit filed against them on April 13 by Beneva and L’Unique General Insurance over alleged flaws in their vehicle security systems that facilitated thefts.
Documents reviewed by Insurance Portal at the Quebec City courthouse show that the three automakers filed separate challenges to the action. They are represented by major Montreal law firms: Toyota by Stikeman Elliott, Honda by McMillan, and FCA by Borden Ladner Gervais. They will submit the grounds for their challenges at a later stage.
Why Honda, Toyota and Fiat Chrysler?
Why target only these three manufacturers and not others such as Nissan, Subaru, Mitsubishi, General Motors and Ford, to name a few?
“We are pursuing FCA Canada, Honda Canada and Toyota Canada because these manufacturers are the ones for which we have recorded the highest number of thefts, resulting in significant financial losses and inconvenience,” Beneva told Insurance Portal in French. “The majority of their models show theft frequencies above the rate observed across the industry.”
The insurer provided the French-language originating application filed with the Civil Division of the Quebec Superior Court.
In their lawsuit, Beneva and L’Unique state that vehicles manufactured by other automakers are rarely stolen because of the security measures they have implemented. The insurers cite Audi and Porsche (Volkswagen Group), as well as BMW, Mercedes-Benz, Tesla and Volvo.
For several years, they note, those manufacturers have incorporated mechanisms limiting access to critical vehicle systems.
A theft cycle that benefits automakers
The thefts involving models manufactured by the three targeted companies, Beneva and L’Unique argue in their lawsuit, “are attributable to security flaws in their anti-theft systems, which allow these vehicles to be stolen with alarming ease.”
The insurers claim these shortcomings have been known to the manufacturers “for many years,” and that they could not have been unaware of the corrective measures available to address them. Yet they “failed to take reasonable steps to do so or to prevent or stop the exploitation of these vulnerabilities,” the plaintiffs allege.
The two insurers do not mince words about Toyota, Honda and Fiat Chrysler. “The Defendants’ inaction can only be explained by the absence of any financial incentive to correct these flaws, stolen vehicles being replaced by insurers, which contributes to maintaining a sales cycle from which they benefit,” they state in their claim.
A precedent?
Is this the first time in Canada that insurers have sued automakers over flaws in vehicle anti-theft systems?
George Iny, president of the Automobile Protection Association (APA), told Insurance Portal he had never heard of a similar lawsuit elsewhere.
Internet searches, whether assisted by artificial intelligence or not, also failed to uncover similar cases in other provinces, the United States or Europe.
While Insurance Portal cannot state with absolute certainty that this is the first time insurers have sued automakers and claimed tens of millions of dollars for this reason, the case remains highly unusual.
Second lawsuit originating in Quebec
This is the second lawsuit launched from Quebec against automakers over deficiencies in vehicle anti-theft systems.
Last year, the Quebec Superior Court authorized a class action involving 13 manufacturers initiated by a Quebec motorist whose Toyota Highlander had been stolen. The case is ongoing.
How the amount claimed was calculated
Beneva is currently seeking approximately $56.274 million, while L’Unique is claiming approximately $14.629 million, for a total close to $71 million.
The insurers specify that these amounts are not final, as vehicle thefts continue at concerning levels. They add that legal interest, additional indemnities and court costs, including expert fees, would also be claimed.
At the time of writing, the amounts correspond to 2,111 thefts that occurred over a three-year period.
Neither the Insurance Bureau of Canada (IBC), the Groupement des assureurs automobiles (GAA) nor Équité Association wished to comment on the lawsuit filed by the two Quebec insurers, as the matter is now before the courts.
“Although our data show a decline since the unprecedented peak reached in 2023, the overall trend remains concerning and claims related to this phenomenon remain well above historical norms,” the GAA said in a statement. “In 2024, insurers received more than 6,624 vehicle theft claims in Quebec and compensated their clients to the tune of $171 million.”
The most stolen brands in 2024
Of the 25 most stolen passenger vehicles in Quebec in 2024, according to the GAA, the majority were sport utility vehicles and 16 were Toyota products.
Topping the list was the 2021 Highlander, followed by the 2022 Tundra and the 2022 4Runner. The 2022, 2020 and 2023 Highlanders were also highly sought after by thieves in 2024.
The next most stolen brand was Jeep, owned by Stellantis, created through the merger of Fiat Chrysler and France’s PSA Group (Peugeot and others). Only two Honda products appeared on the list: the 2018 Acura TLX and the 2021 RDX.
Last fall, Équité Association published a list of the 10 most stolen vehicles in Canada and Quebec. While differences in the results suggest methodologies distinct from those used by the GAA — for example, the most stolen vehicle in both Quebec and Canada was the 2021 Toyota RAV4, according to Équité Association — many of the same models appeared across these rankings.
