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Car Theft Insurance Coverage

Car theft is covered under the comprehensive section of a car insurance policy. Theft coverage applies to the loss of the vehicles as well as parts of the car such as air bags. Comprehensive insurance coverage, which is not mandatory, also pays for fire, vandalism and weather-related damage including damage from flooding and earthquakes. 

Car insurance premium rates for comprehensive insurance are affected by the risk of loss, meaning the likelihood that an insured car will be stolen or damaged, and also the car’s value at the time of the loss. The dollar size of claims has been going up, reflecting the higher value of new cars on the road, the value of the cars that are targets for theft or are damaged and the cost of vehicle bodywork. Vehicle bodywork costs include replacing stolen components. Nationally, more than 75,000 airbags are stolen every year. 

According to the Federal Bureau of Investigation, the number of U.S. motor vehicle thefts decreased by 8.1 percent from 2006 to 2007, the fourth consecutive annual decrease. In 2007 the value of stolen motor vehicles was $7.4 billion. The average value of a motor vehicle reported stolen in 2007 was $6,755.  

KEY STATISTICS

2009 Car Theft Statistics: According to the Federal Bureau of Investigation's (FBI) Uniform Crime Reports, a motor vehicle was stolen in the United States every 40 seconds. The odds of a vehicle being stolen were 1 in 270 in 2008 (latest data available based on registrations from the Federal Highway Administration, thefts from the FBI and calculated by the Insurance Information Institute). The odds are highest in urban areas.

U.S. motor vehicle thefts fell 17 percent from 2008 to 2009, according to the FBI's Uniform Crime Reports. In 2009, 794,616 motor vehicles were reported stolen.

In 2009 the South accounted for the largest share of thefts—37.8 percent, followed by the West, 34.2 percent. The Midwest accounted for 18.0 percent of thefts and the Northeast for 10.0 percent.

Nationwide the 2009 motor vehicle theft rate per 100,000 people was 258.8, down 17.8 percent from 315.0 in 2008. The highest rate was reported in the West, 380.0, down 17.7 percent from 461.7 in 2008. The rate of motor vehicles stolen was 265.2  in the South, down 17.8 percent from 2008; 213.6 in the Midwest, down 18.7 percent; and 143.6 in the Northeast, down 17.5 percent.

Only 12.4 percent of thefts were cleared, either by arrests or by exceptional means, in 2009.

Insurance Premiums: The average comprehensive insurance premium in the U.S. fell 3.3 percent from $145.16 in 2005 to $140.38 in 2006 (the most recent data available), according to the National Association of Insurance Commissioners.

Carjackings: Carjackings occur most frequently in urban areas. They accounted for only 3.0 percent of all motor vehicle thefts, based on Department of Justice data from 1993 to 2002 (latest available). 

RECENT DEVELOPMENTS

Car Thefts By City: According to a National Insurance Crime Bureau (NICB, https://www.nicb.org ) study released in May 2010, the Laredo, Texas, Metropolitan Statistical Area (MSA) had the highest rate per capita for vehicle thefts in the nation in 2009. Of the 366 MSAs in the United States, 304, or 83 percent, reported lower thefts in 2009, compared with 2008. In addition, each of the top 10 U.S. MSAs for vehicle theft in 2009, as shown below, reported fewer motor vehicles stolen in 2009. 

Car Thefts By Model: The NICB says that the 1994 Honda Accord was the most stolen vehicle in 2009, followed by the 1995 Honda Civic. The 2009 report confirms that theft of older vehicles has remained constant for the past several years. Seven of the vehicles on the top 10 list shown below are 10 or more model years old. These cars have been consistent top sellers for many years and, because some of their parts are interchangeable, they are popular targets with thieves. The NICB compiles its list using National Crime Information Center data, which is based on police reports.

Antitheft Devices: Consumers spend hundreds of millions of dollars on vehicle security devices. Electronic tracking devices such as LoJack use a hidden transmitter to allow police to track the vehicle. (LoJack, which operates in 26 states and the District of Columbia claims a better-than 90 percent recovery rate.) These tracking devices not only help police find individual stolen vehicles but lead them to chop shops, thwart the export of stolen motor vehicles and lead to the recovery of expensive building construction vehicles as well as passenger cars. Some insurers offer their policyholders a LoJack tracking system at a discounted price along with premium discounts.

Insurer Discounts: According to the National Association of Insurance Commissioners, in nine states (Florida, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Mexico, Pennsylvania and Rhode Island) regulations require insurers to provide car owners with discounts on the base rates for comprehensive insurance for antitheft devices. In four other states insurers may offer these discounts or are encouraged to offer them. The amount of the discount varies but is typically 15 to 20 percent for passive devices, which are automatically activated when the vehicle is locked. Massachusetts residents are eligible for a minimum 25 percent discount if they have both an antitheft device and an auto recovery system, and some combinations of devices can result in a 36 percent discount. Insurance companies in states that do not mandate discounts, such as Georgia, New Jersey, New York and Washington, encourage car owners to install antitheft devices by voluntarily providing discounts.  Continue    
Used with permission of iii.org    
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Car Theft Insurance