Car Theft Is Up, and Your Insurance May Cover Less Than You Think

Auto theft — a scourge of car owners that had all but disappeared in recent years — is coming back. And these days your car insurance may cover a smaller share of your financial loss than in decades past.

With new and used vehicle prices soaring during the pandemic, car theft is on the rise. After six years in which the number of vehicles stolen declined or held steady, data released this month shows thefts soared by 11% between 2019 and 2020, according to the National Insurance Crime Bureau.

Overall, there were more than 880,000 vehicle thefts nationwide in 2020 -- about one stolen vehicle every 36 seconds, the NICB calculates -- up from about 795,000 in 2019. Theft data for 2021 is not yet available, but prices for both new and used cars have reached record highs this year.

Also, as in the heyday of car theft in the early 1990s, when car radios were ripped from dashboards, today’s thieves are targeting a new favorite auto part: the catalytic converter -- an exhaust component worth up to $3,000 that catalyzes toxic emissions into less harmful gases. Data provider Been Verified reports a near-doubling nationally of “cat” thefts in just the first five months of 2021 compared with all of 2020. And the total thefts for that portion of this year are more than quadruple the number in 2019.

Here’s more on these twin waves of automotive thievery, including how insurance may not make you whole on a claim and what you do to protect yourself.

Vulnerability is higher, and unevenly spread

Car theft remains a smaller problem than it was in the early 1990s, when theft rates peaked at three times the current incidence. But the new increases come as sky-high prices for both new and used cars make it less likely that the payout for the loss of a stolen car will be enough to replace the vehicle. In addition, aiming to pay less for insurance when they're driving less, some drivers have been increasing their deductibles -- leaving them with a bigger share of a claim to pay if their car or its converter are stolen.

And as with most other ill-effects of the pandemic, the impact of increased car and “cat” thefts are felt acutely by some, while others are barely affected -- and may even be enjoying reductions in risk.

There are big differences in the rate of theft -- and which direction that’s headed -- depending on where you live. Here are the 10 states with the highest incidence of theft in 2020:

1. Washington, D.C.
2. Colorado
3. California
4. Missouri
5. New Mexico
6. Oregon
7. Oklahoma
8. Washington State
9. Nevada
10. Kansas.

As this list reflects, the west dominates car theft, and there’s no expert consensus about just why that is so. Some cite the region’s car-centric culture and its wide-open roads, which facilitate ready escapes over state lines. The Public Policy Institute of California (PPIC) even attributes the prevalence of car thefts in the state in part to the implementation of the state’s Public Safety Realignment Act, which caused prisons to release inmates early beginning in 2011.

There’s a similar lack of clarity about why some of those states have seen rates surge between 2019 and 2020 (up by more than a third in both California and Colorado) while others have seen declines (New Mexico and Nevada).

Some hotspots for stolen cars also feature prominently among the worst locations for theft of catalytic converters. According to Been Verified, if current trends hold, California, Texas, Washington, Minnesota and Colorado will be the leading states for cat converter theft in 2021. Colorado is also among the states where such theft has been surging the most, the company says, along with Connecticut and Arizona.

What to do about car and converter thefts

The growth in auto thefts of all kinds during the pandemic was driven in part by more vehicles being underused and unattended, says Robert Passmore, Assistant Vice President of Personal Lines Policy at the Property Casualty Insurers Association of America.

Accordingly, Passmore says, you’re likely to be better off if you can garage your car, or at least park it in a place where it is well protected. He suggests supplementing those steps by using anti-theft devices such as alarms that can thwart thieves, and may earn you small discounts on your premiums that can help to subsidize their cost.

To discourage removal of your catalytic converter -- a crime that “takes only minutes using some basic, readily available battery-operated tools from a local hardware store,” according to the National Insurance Crime Bureau -- you can also install a cage, plate or cable to hamper thieves from accessing the component from beneath the car. Costs typically range from $200 to $800 or so. That price tab is likely less than the deductible on your premium, were you to have the converter stolen and replaced.

Your car insurance policy and the pandemic

Also, when it comes to deductibles, consider resisting the pandemic trend of increasing this amount because you’re using your vehicle less. More than one in 10 of drivers have upped their deductible amounts during the pandemic, according to a J.D. Power U.S. Insurance Shopping Survey.

While the move does reduce premiums -- by an average of 11% if you move from a $500 to a $1,000 deductible, according to online auto insurance brokerage The Zebra -- the savings may not be worth the risk, especially if current auto theft trends hold and you live in a theft hotspot.

Similarly, this may not be the best time to scale down other coverage on your car, including to drop an older car from comprehensive coverage -- the type of insurance that protects against theft.

Consider theft appeal when car shopping

If you’re in the market for a car, keep in mind the varying allure of different vehicles to car and converter thieves.

When it comes to theft, the priciest and flashiest cars aren’t necessarily the most vulnerable. The National Insurance Crime Bureau cites the most popular cars for thieves as (in order): Ford pickup truck (full-sized), Honda Civic, Chevrolet pickup truck (also full-sized), Honda Accord, and Toyota Camry. These vehicles are also popular overall, which is not a coincidence, according to Robert Hartwig, professor and director of the Risk and Uncertainty Management Center at the University of South Carolina. He says these models are often stolen so they can be taken to “chop shops” and broken down to be sold for parts.

Some of the brands at highest overall risk of theft are also especially vulnerable to converter theft. According to Been Verified, the cars most often targeted by catalytic converter thieves in 2020 were the Toyota Prius, Honda Element, Toyota 4Runner, Toyota Tacoma and Honda Accord.

Increased theft and your car insurance premiums

Will the uptick in these auto thefts hit drivers with hikes in their insurance premiums? Not immediately, says Passmore, and “not very dramatically” even if they do trigger eventual hikes. The losses from auto theft, he notes, are far lower than payments insurers make on liability expenses such as medical bills.

Still, he sees rising theft as among a “perfect storm of factors” that are affecting car insurance at the moment, including riskier driving and larger-than-usual rises in repair costs due to expensive, sophisticated technology and rising labor costs. There’s “a good deal of uncertainty about whether these will persist,” he says. But if they do, it’s conceivable that they will serve to drive up rates, along with other factors such as a continued growth in miles driven.

“All the more reason for consumers to control the factors they can to reduce the likelihood of a claim,” Passmore says -- including those that will reduce the chance of needing to file a theft claim.

More on Car Insurance