Keyless Car Theft UK Insurance Impact

As FCA-authorised insurance experts who have helped arrange over 900,000 policies, WeCovr understands the complex factors affecting your premiums. This guide explains the direct link between rising keyless car crime in the UK and the escalating cost of your motor insurance, offering actionable advice to protect both your vehicle and your wallet.

Keyless Car Theft UK Insurance Impact

The convenience of keyless entry and start systems has become a standard feature on most new vehicles. Unlocking your car with a simple touch of the handle is a modern luxury, but it has come at a steep price. Organised criminal gangs have exploited vulnerabilities in this technology, leading to a dramatic surge in vehicle theft across the United Kingdom.

This crime wave isn't just a headache for car owners and the police; it's a primary driver behind the sharp increase in motor insurance premiums for everyone. Insurers are paying out record amounts in theft claims, and these costs are inevitably passed on to policyholders. Understanding this threat is the first step towards mitigating your risk and controlling your insurance costs.

What is Keyless Car Theft and Why is it Surging?

Keyless car theft, often called a "relay attack," is a shockingly simple and silent method of stealing a vehicle. It requires no forced entry, no smashed windows, and can be completed in under a minute.

How a Relay Attack Works:

1. The Capture: One criminal stands near your house or office, using a relay amplifier device to capture the signal from your key fob, which is likely sitting on a hallway table or in your pocket. The device tricks the key into thinking the car is nearby.
2. The Relay: The amplifier boosts and transmits this captured signal to a second device held by an accomplice standing next to your car.
3. The Entry: The car's security system is fooled into believing the legitimate key is present. It unlocks the doors and disarms the alarm.
4. The Start: The criminals can then start the car with the push of a button and simply drive it away.

According to the latest data from the Association of British Insurers (ABI), vehicle thefts rose by over 25% in the last year, with more than 90% of stolen modern vehicles being taken without the owner's keys. This trend shows no sign of slowing in 2025.

The UK's Most Targeted Vehicles

While all cars with keyless systems are potential targets, thieves disproportionately target high-value SUVs and popular family cars, which can be quickly sold for parts or exported.

Source: Projected analysis based on 2024 DVLA and Thatcham Research data.

The Direct Impact on Your Motor Insurance Premium

The UK's motor insurance industry operates on a principle of pooled risk. The premiums collected from all drivers are used to pay for the claims made by a few. When the frequency and cost of claims rise, the entire pool is affected.

The ABI reported that its members paid out £1.5 billion for all motor claims in the first quarter of 2025, a significant portion of which was for theft. This directly translates to higher premiums for you.

How Insurers Calculate Your Risk

Insurers use a wide range of data points to create a risk profile for each policyholder. The threat of keyless theft has made some of these factors more significant than ever.

• Vehicle Model: Insurers now scrutinise the security of specific models. Owning a car on the "most stolen" list will automatically place you in a higher risk category, leading to substantially higher quotes. Some insurers are even declining to offer cover for certain high-risk models in specific areas.
• Postcode: Your address has always been a key rating factor, but it's now more critical than ever. If you live in a postcode with a high rate of keyless theft, your premium will reflect that increased risk, regardless of your personal driving history.
• Claims History: A single theft claim can have a devastating impact on your policy, as we'll explore below.
• Security Features: The presence or absence of Thatcham-approved alarms, immobilisers, and trackers is now a major consideration for underwriters.

For example, a driver with a clean record owning a Range Rover in a London borough could see their premium double or even triple at renewal compared to two years ago, purely due to the perceived theft risk associated with the vehicle and location.

Understanding Your UK Motor Insurance Obligations

In the UK, it is a legal requirement under the Road Traffic Act 1988 to have at least third-party motor insurance for any vehicle used or kept on public roads. Driving without valid insurance is a serious offence that can lead to severe penalties, including unlimited fines, 6 to 8 penalty points on your licence, and potential disqualification from driving.

It's crucial to understand the different levels of cover, especially concerning theft.

The Three Main Levels of Cover

Choosing the cheapest option isn't always the wisest financial decision. Here's a breakdown of what each level of vehicle cover includes:

• Third Party Only (TPO): This is the minimum legal requirement. It covers injury or damage you cause to other people, their vehicles, or their property. It does not cover theft of or damage to your own vehicle. If your car is stolen and you only have TPO cover, you will have to bear the entire financial loss yourself.
• Third Party, Fire & Theft (TPFT): This includes everything in TPO, plus it covers your vehicle if it's stolen or damaged by fire. This is the minimum level of cover you need to be protected against keyless theft.
• Comprehensive: This is the highest level of cover. It includes everything in TPFT and also covers accidental damage to your own vehicle, even if the accident was your fault. Surprisingly, comprehensive cover can sometimes be cheaper than TPFT, as insurers' data suggests that drivers who opt for it are often lower risk.

Business and Fleet Insurance

For businesses, the legal obligations are the same. Whether you operate a single van or a large fleet of company cars, each vehicle must have at least Third Party Only insurance. Most businesses opt for comprehensive fleet insurance to protect their valuable assets, manage liability, and ensure business continuity. A robust risk management plan, including anti-theft measures, is essential for securing affordable fleet insurance.

How a Keyless Theft Claim Affects Your Policy

Having your car stolen is a distressing and disruptive experience. The subsequent impact on your insurance policy can add a significant financial sting that lasts for years. Here’s what happens when you make a theft claim.

1. The Claim: You will report the crime to the police (obtaining a crime reference number) and then to your insurer. Your insurer will investigate, which can take several weeks. If the claim is approved, they will pay out the market value of your vehicle at the time of the theft, not the price you paid for it.
2. The Excess (illustrative): You will have to pay the compulsory and any voluntary excess you agreed to when you took out the policy. This is the amount you contribute towards the claim before the insurer pays the rest. For a £30,000 car, a combined excess could be £500 or more.
3. Loss of No-Claims Bonus (NCB): A theft claim is treated as an "at-fault" claim for NCB purposes because there is no third party to recover costs from. Unless you have specifically paid extra for a "Protected No-Claims Bonus" add-on, you will lose some or all of this valuable discount. A driver with a full NCB can see it reduced by two or three years, instantly increasing their base premium.
4. Increased Future Premiums: At your next renewal, you will be seen as a higher-risk customer. You will have a recent claim on your record and a reduced NCB. This combination will lead to a substantial increase in your premiums for the next three to five years, as you must declare the claim to all future insurers.

Example: The Financial Aftermath of a Theft Claim

This simplified example demonstrates the sharp financial impact of a single theft claim on a motor policy.

This demonstrates how a single theft can cost a driver thousands of pounds in the long run, on top of the inconvenience and stress of losing their vehicle.

Understanding Optional Extras

When you buy car insurance, you can add optional extras to your policy for more complete protection:

• Protected No-Claims Bonus: For an additional fee, this allows you to make one or two claims in a policy year without losing your NCB discount.
• Guaranteed Courtesy Car: Standard policies may only provide a small courtesy car if yours is being repaired at an approved garage. A guaranteed courtesy car provides a vehicle even if yours is written off or stolen.
• Legal Expenses Cover: This covers legal costs if you need to pursue uninsured losses, such as your excess or loss of earnings, from another party.

Practical Steps to Protect Your Keyless Car

While the threat is real, it is not insurmountable. Taking proactive security measures can dramatically reduce your risk of becoming a victim and may even lower your motor insurance UK premium. Insurers look favourably on owners who demonstrate they are taking security seriously.

Essential Security Measures

1. Faraday Pouch (illustrative): This is the most crucial and affordable defence. A Faraday pouch is a small, signal-blocking wallet that you place your key fob inside when at home or work. This prevents thieves from capturing its signal. They are widely available and cost as little as £5. Always have a spare for your second key.
2. Steering Wheel Lock: A highly visible and physical deterrent. A high-quality, brightly coloured steering wheel lock (like a Disklok or Stoplock) makes your car a much less attractive target. Thieves are looking for quick, easy thefts; this complicates the process significantly and often makes them move on to an easier target.
3. Driveway Security: If you have a driveway, consider installing a retractable security post or bollard. This provides a strong physical barrier that cannot be bypassed electronically. CCTV and motion-activated security lights also act as excellent deterrents.
4. Secure Parking: Whenever possible, park in a well-lit, busy area or a secure car park with the "Park Mark" award. At home, a locked garage is the best option.
5. Vehicle Tracker: A Thatcham-approved tracking device won't prevent the theft, but it massively increases the chances of recovery (often over 95%). Many insurers offer significant discounts for vehicles fitted with S5 or S7 trackers. For many high-value vehicles, insurers now mandate the installation of a tracker as a condition of cover.

The experts at WeCovr can help you identify which security upgrades are recognised by insurers and could lead to significant premium discounts. Some insurers mandate trackers on certain high-value models before they will offer cover at all.

Are Car Manufacturers Doing Enough?

Initially slow to react to the rise of relay attacks, manufacturers are now implementing better security technology. Many new vehicles now come with key fobs that have motion sensors. If the key is left stationary for a few minutes (e.g., on a table), it enters a "sleep" mode and stops broadcasting a signal, thwarting relay attacks.

In 2024, the UK implemented new vehicle security regulations aligned with UN standards (Regulation No. 162 and 163), mandating better protection against cyber-attacks, including keyless theft, for all new vehicle types. This is a positive step, but it will take many years for these more secure vehicles to replace the millions of vulnerable older cars on UK roads.

When buying a new or used car, ask the dealer specifically about its security features:

• Does the key fob have a sleep mode or ultra-wideband (UWB) technology?
• What is the car's Thatcham Security Category rating?
• Are there any known vulnerabilities for this model, and have any software updates been issued to fix them?

Choosing the Right Motor Insurance in a High-Theft Environment

With premiums fluctuating so wildly, simply auto-renewing your policy is no longer a sound financial strategy. To get the best car insurance provider for your needs, you must compare the market annually.

• Be Honest and Detailed: Accurately declare all security measures you have in place. A steering lock, a tracker, or secure overnight parking in a locked garage can unlock discounts from certain providers.
• Consider Telematics: A "black box" policy that monitors your driving can sometimes offer cheaper premiums, especially for younger drivers, by proving you are a safe and responsible road user.
• Review Your Cover: Do you need every optional extra? Could you increase your voluntary excess? Agreeing to a higher voluntary excess can lower your premium, but ensure you can comfortably afford to pay it if you need to make a claim.

This is where a specialist broker like WeCovr becomes invaluable. We compare policies from a wide panel of UK insurers, including specialist providers who understand the nuances of high-risk vehicles and locations. Our experienced insurance specialists can find a policy that offers the right protection at a competitive price, saving you time and money. Furthermore, clients who purchase motor insurance through WeCovr can often benefit from exclusive discounts on other policies, such as home or life insurance. Our consistently high customer satisfaction ratings reflect our commitment to finding the best solution for every driver.

Fleet Management: Mitigating Keyless Theft Risk for Businesses

For businesses relying on a fleet of cars or vans, the threat of keyless theft poses a significant operational and financial risk. A stolen vehicle means downtime, lost revenue, damage to your reputation, and a potential hit to your fleet insurance premium.

Key Strategies for Fleet Managers:

• Mandatory Use of Faraday Pouches: Implement a strict, auditable policy requiring all drivers to use Faraday pouches for vehicle keys when not in use. Make this part of the driver's handbook and daily checks.
• Secure Overnight Parking: Where possible, ensure all fleet vehicles are parked in secure, monitored compounds overnight. For drivers who take vehicles home, their parking arrangements should form part of the risk assessment.
• Invest in Telematics and Trackers: Modern fleet telematics systems not only monitor driver behaviour but also provide advanced tracking and immobilisation features, which are vital for vehicle recovery and can lead to lower fleet insurance costs. The data can also prove a vehicle's location if a dispute arises.
• Driver Education: Regularly train your drivers on theft prevention techniques and the importance of vehicle security. A "toolbox talk" on relay theft can be highly effective.
• Phased Vehicle Replacement: When upgrading the fleet, prioritise vehicles with the latest anti-theft technology, such as motion-sensing key fobs or UWB systems.

A proactive approach to risk management demonstrates to insurers that you are a responsible operator, which is key to negotiating favourable terms for your business motor policy.

Frequently Asked Questions (FAQ)

Will using a Faraday pouch or steering wheel lock lower my car insurance?

Directly, it might not always result in an immediate discount on your standard premium. However, it significantly reduces your risk of being a victim of theft. Preventing a claim is the single most effective way to keep your future premiums low and protect your No-Claims Bonus. Some specialist insurers may offer small discounts for approved physical security devices, so it's always worth declaring them.

Does my comprehensive motor insurance policy automatically cover keyless theft?

Yes, a comprehensive policy includes cover for theft, including keyless theft. A Third Party, Fire & Theft policy also covers theft. However, if your insurer has specific security requirements for your vehicle (e.g., mandating a Thatcham-approved tracker for a high-value car) and you haven't complied, they could potentially reject your claim. Always read your policy documents carefully and adhere to any security endorsements.

What are the first things I should do if my keyless car is stolen?

First, call the police immediately to report the crime and get a crime reference number. This is essential for any insurance claim. Second, if you have a tracking device, contact the tracking company to activate it. Third, contact your motor insurance provider as soon as possible to inform them of the theft and begin the claims process. Make sure you have your policy number and the crime reference number to hand.

The rise of keyless car theft has fundamentally changed the risk landscape for UK drivers and insurers. By understanding the threat, taking practical security measures, and being savvy when choosing your cover, you can protect your vehicle and combat rising insurance costs.

Don't let your renewal be a costly surprise. Take control of your motor insurance today.

Contact WeCovr for a free, no-obligation quote and let our expert team compare the market to find the right cover for you, your business, or your fleet.

Sources

• Department for Transport (DfT): Road safety and transport statistics.
• DVLA / DVSA: UK vehicle and driving regulatory guidance.
• Association of British Insurers (ABI): Motor insurance market and claims publications.
• Financial Conduct Authority (FCA): Insurance conduct and consumer information guidance.