Surge in Carjackings Raises Alarm in Insurance Sector; Potential Impact on Premium Costs

The sharp rise in carjackings and vehicle thefts is prompting concerns about increased auto insurance rates nationwide.

Carjackings have surged dramatically in recent years, not only causing trauma for victims but also potentially driving up insurance premiums for many vehicle owners.

Key Highlights:

• Data from the National Insurance Crime Bureau (NICB) shows a nearly 30% rise in vehicle thefts in 2021 compared to 2017.
• Most carjacking incidents involve juveniles, often linked to organized chop shops or used in drive-by shootings, according to NICB research.
• Several major U.S. cities have experienced over 200% increases in carjackings over the last two years, with New York City reporting a staggering 286% rise.
• Auto theft contributes significantly to increasing insurance premiums.
• Comprehensive insurance policies typically cover theft, whereas strict liability policies do not.
• Insurers recommend preventive measures such as installing anti-theft devices and avoiding leaving vehicle title documents inside the car.

Alarming Increase in Carjackings Across U.S. Urban Areas

The National Insurance Crime Bureau (NICB) has highlighted the dramatic rise in carjackings during a recent U.S. Senate hearing, describing the statistics as "staggering."

NICB CEO David Glawe testified on March 1 before the Senate Judiciary Committee, revealing that New York City witnessed a 286% increase in carjackings from 2019 to 2021.

This trend is not isolated to New York. Philadelphia saw a 238% increase, Chicago 207%, and Washington, D.C. 200% during the same period. For example, Washington, D.C. reported 142 carjackings in 2019, which surged to 426 by 2021.

Other cities like New Orleans and Denver have also reported significant jumps, with suburban areas increasingly affected.

NICB data indicate a 16.5% nationwide increase in auto thefts in 2021 compared to 2019, and nearly a 29% rise since 2017, with year-over-year growth continuing.

Glawe emphasized that juveniles, outnumbering adults by more than two to one, are often involved in these crimes, supplying parts for chop shops or vehicles for drive-by shootings. NICB advocates for enhanced community policing, revised bail laws, and increased enforcement, alongside restorative justice approaches.

Vehicle Theft's Role in Driving Up Insurance Premiums

Carjackings, as a subset of vehicle thefts, contribute to a higher volume of insurance claims, influencing premium increases in affected regions.

Robert Passmore, Vice President of Auto and Claims Policy at the American Property Casualty Insurance Association, noted that auto thefts peaked in 2020 at their highest level in a decade, based on NICB data.

Passmore acknowledged reports of significant carjacking increases in multiple cities, emphasizing that insurers prioritize motorist safety. He described these trends as concerning and a key factor among many affecting insurance costs.

Nonetheless, the primary drivers of auto insurance pricing remain bodily injury and property damage claims from accidents, as well as weather-related damages.

Auto insurance rates are climbing for various reasons including supply chain disruptions, labor shortages, inflation, and unfortunately, a rise in fatalities. Increased auto theft and insurance fraud also exert upward pressure on rates, which are now trending back to pre-pandemic levels, according to the Insurance Information Institute (Triple I).

Auto thefts rose by 9.2% in 2020 after a prior decline. Popular targets include Japanese vehicle models and pickup trucks, while luxury vehicles are often stolen for joyrides, as demonstrated by NICB's bait car operations.

NICB collaborates with local and federal law enforcement to dismantle carjacking rings. For example, last year they assisted San Bernardino County Sheriff Deputies in identifying stolen vehicles and associated insurance claims after intercepting a vehicle hauling auto parts, which had itself been carjacked.

Beyond increased insurance premiums, individuals bear costs through investments in anti-theft technology and secure parking to protect their vehicles.

Expert Recommendations to Reduce Carjacking Risks

Insurance companies such as Geico, Allstate, and academic institutions provide numerous strategies to help consumers safeguard their vehicles.

Common advice includes always locking the vehicle—even while driving—closing sunroofs, removing valuables, quickly entering the car, especially at night, and installing anti-theft devices. These devices can often qualify owners for insurance discounts. Visible and audible alarms, as well as etching the vehicle identification number (VIN) on windows, serve as effective deterrents. Allstate also recommends GPS tracking systems for enhanced security.

In the event of a carjacking, experts unanimously advise not resisting, regardless of whether the attacker is armed, prioritizing personal safety over the vehicle. NICB highlights that carjackings involve violent confrontations or credible threats of serious harm or death, distinguishing them from typical auto thefts.

While professional thieves and exploited juveniles dominate most thefts, some incidents involve joyriders targeting luxury cars.

Drivers should be cautious of "bump-and-rob" tactics, where criminals intentionally cause minor collisions to lure victims out of their cars before stealing the vehicle. Authorities recommend staying alert at stoplights and maintaining enough space to maneuver if needed.

Texas A&M University notes that women may be more frequently targeted, as perpetrators perceive them as less likely to resist. Carjackers often prefer victims driving alone but may also threaten those with small children, who might be less visible during the approach.

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