Impact of Theft on Auto Insurance

Motor vehicle theft, also referred to as grand theft auto, is big business with criminal elements in the United States, from the rebellious teen who’s decided to push their luck, to full-blown organized crime.  And if your car is ever stolen, it’s more likely that you’ve fallen victim to the “professionals” than those troubled teenagers.

Wait.  Car theft is big business?  With a real impact on the economy of the United States?  On average, a car is stolen every 24 seconds in the United States, so the answer is a loud “yes!”  Just how big is this business? According to the FBI, auto theft as a whole is responsible for a total of $8 billion in losses annually.

A full one-third to one-half of the cars stolen in the United States will never return to their rightful owners.   So what happens to these stolen cars?  A number of them will find their way to chop shops where the individual parts of some models can bring a much higher profit margin than the whole car can do alone. This is due to the limited availability and high costs of some replacement parts.  And cars become particularly attractive the older they get, because they’ve not only increased in rarity, but in many cases, replacement parts may no longer be made.

That’s right – older cars are in demand.  Just regular, mid-priced vehicles.  The stereotypical stolen car is normally though to be an expensive, luxurious model.  But more common cars are more attractive to most thieves.

A look at the most stolen cars in 2008 according to the FBI demonstrates the popularity of stealing common models.  They included:

• 1989 Toyota Camry
• 1994 Acura Integra
• 1994 Honda Accord
• 1995 Honda Civic
• 1996 Jeep Cherokee
• 1997 Ford F-150 Series Pickup
• 1999 Ford Taurus
• 2000 Dodge Caravan
• 2002 Ford Explorer
• 2004 Dodge Ram Pickup

Compare the 2008 list to 2009′s most stolen cars:

• 1994 Honda Accord
• 1995 Honda Civic
• 1991 Toyota Camry
• 1997 Ford F-150
• 2004 Dodge Ram Pickup
• 2000 Dodge Caravan
• 1994 Chevrolet Pickup
• 1994 Acura Integra
• 2002 Ford Explorer
• 2009 Toyota Camry

One area that the luxury cars do lead in: average loss per claim.  How Stuff Works recently looked at the the top loss cars.  The top 10 loss leaders include:

Cadillac Escalade: Average claim of $11,934
Ford F-250 crew 4WD (2008-09): Average claim of $9,636
Infiniti G37 2-door (2008-09): Average claim of $10,324
Dodge Charger HEMI: Average claim of $10,118
Chevrolet Corvette Z06: Average claim of $41,229
Hummer H2 4WD: Average claim of $10,324
Nissan Pathfinder Armada: Average claim of $12,458
Chevrolet Avalanche 1500: Average claim of $7,571
Chevrolet Silverado 1500 crew: Average claim of $6,814
GMC Yukon: Average claim of $9,499

The most important amount in terms of car theft is the amount added to our insurance premiums.  An estimated $200-300 of your annual premiums go directly to cover auto-theft based losses.  That’s a significant impact that all of us feel when we pay for our policies.

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