A surge in accident histories, escalating weather-related losses, persistent lien issues, and rising VIN fraud are reshaping the risk landscape for Canada’s auto insurers, according to CARFAX Canada’s 2025 Year in Rear View report. The findings reveal that used-vehicle histories are becoming more complex and more costly, making accurate data indispensable for underwriting, claims management, and fraud prevention.
The report, based on vehicle history checks conducted between Sept. 30, 2024, and Oct. 1, 2025, underscores how gaps or inaccuracies in a vehicle’s past can directly affect insurers’ ability to assess risk and price policies appropriately.
CARFAX Canada identified more than 600,000 vehicles with accident histories in 2025, amounting to over $9.2 billion in claims, a 21% increase from the previous year.
Severe weather damage also climbed. It affected over 50,000 vehicles, with Alberta reporting $454 million, of which 91% are hail-related. Ontario and Quebec followed with $50.3 million and $1.6 million in damage, respectively. Wind-related claims were also significant, especially in Alberta, Ontario, and Nova Scotia. These incidents directly influence insurers’ exposure, as vehicles with hidden damage can lead to costly claims and higher loss ratios.
Outstanding liens remain a critical concern, with 40% of vehicles checked showing money owing. Liens complicate claims processing and can affect subrogation rights, creating additional administrative and financial risks for insurers. CARFAX Canada also found over 372,000 vehicles with potentially cloned VINs, highlighting a growing fraud risk that can impact underwriting, coverage validity, and claims payouts.
For insurers, access to comprehensive vehicle histories is essential for managing exposure. Accident and damage records help underwriters assess risk more accurately, set premiums that reflect a vehicle’s true condition, and identify trends in claims severity. Meanwhile, lien and VIN data support fraud detection and ensure that coverage is applied correctly, reducing potential losses and legal disputes.
CARFAX Canada’s findings reinforce that due diligence before a vehicle purchase is not just a consumer issue, but rather, it’s critical for insurers. Understanding a vehicle’s full history allows insurance providers to make informed decisions, manage claims efficiently, and mitigate financial and operational risk in the used vehicle market.
By incorporating these insights into underwriting and claims management processes, insurers can better control loss ratios, improve risk-based pricing, and maintain market stability.
