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26-second car thefts drive insurance rates

You have a much better chance of your car being stolen than winning the lottery. And the odds are getting better every year.

Car theft in the United States has increased the past two years, after declining for most of the 1990s.

According to the Insurance Information Institute (III), in 2001, the last year that complete figures are available, 1,226,457 motor vehicles were stolen, one for every 196 car owners in the country. That's one car every 26 seconds -- and it sometimes takes less time than that to steal it.

The total estimated value in 2001 of cars stolen was $8.2 billion, up 5.7 percent, and the average value of each vehicle was $6,646.

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Hot choices, hot cars
Auto theft experts can more easily tell you which model cars are the hot choices of thieves, and in which locations they are most likely to be stolen, than they can tell you why any particular car is stolen.

Here are just a few reasons they cite:

  • To be used in other crimes, such as robberies and drug dealing
  • To be dismantled in chop shops for expensive parts for other autos
  • To be shipped out of the country and sold in other nations where prices are much higher -- and questions far less.
  • For resale in this country
  • Insurance fraud, often by car owners themselves
  • For joy rides and then usually abandoned

The statistics most often come from the FBI's Uniform Crime Reports, but the numbers don't always tell the complete story.

According to the Insurance Information Institute, the recovery rate for stolen autos in 2001 was 62 percent, way down from the whopping mid-80 percent levels in the early 1990s -- probably because more autos were shipped out of the country. At least 200,000 cars are exported illegally each year from the U.S. However, the recovery rates don't indicate what condition the recovered auto was in -- whether it was hauled from a canal, was burned or wrecked, or how many elements might have been missing from it.

Low priority for police
With many law enforcement agencies undermanned, car theft is often considered a low priority compared to more violent crimes.

"Many police departments don't even come out anymore if your car is stolen," says Rob Painter, a private auto theft investigator from Wisconsin and author of the book, Auto Theft: Let the Truth Be Known.

"They'll just take the report over the phone. It's not like we see on TV where a car is immediately put on a 'hot list' for other officers.

"For example, we had one stolen car which had a week's worth of parking tickets on it a few weeks after the owner had reported it stolen and it was still sitting there. Car theft is just not a priority crime in many jurisdictions."

In some jurisdictions, however, the trend is toward more on-site investigation, especially where insurance fraud is a major concern.

The rate of phony theft reports for insurance fraud increases as the economy plummets, explains Painter and other experts. People find themselves unable to meet car payments or in leased cars, get out of expensive mileage charges after the maximum is reached, so they report their cars stolen, figuring they can get out of car or lease payments that way.

"Insurance fraud is very high," says Lt. Greg Terp, of the Miami-Dade Police Department in Florida and commander of the Miami-Dade Multi-Agency Auto Theft Task Force. "A lot of it is due to the economy. We used to take auto theft reports by phone. We have stopped doing it because it makes it easier to commit insurance fraud. There are often telltale signs an investigator can spot that don't match with an owner's story. We now require that people sign affidavits when they report a stolen vehicle. If they lie, they can be charged with perjury and making a false police report."

Painter recalls a case in which a car was reported stolen and later found burned. "The investigators found the locked steering column had not been defeated, so that the car was last operated with a key," he said. "When an investigator went to talk to the roommate of the insured, he found that the roommate had been burned from setting the car on fire for his friend. A lot of people think if you burn a car, there is no evidence. It's not true.

"In this case, the owner was in a lot of trouble. Not only did the insurance company not pay for the car, but also the owner was ordered to pay $50,000 back to the insurance company, which included court costs. He was also charged with arson and fraud.

"In some cases, it doesn't go that far. The insurance companies just won't pay the claims if they find fraud."

A victimless crime?
Many consider auto theft a "victimless crime," and some will even say, "Well, my car is covered by insurance, so I'm not worried." But that's not always true.

Auto liability insurance is required by law in 47 states and the District of Columbia, but comprehensive, which covers theft, fire and damage by other means, is not mandated by law, so many drivers might not have it. Those who have their cars financed will almost certainly be required by the lien holder to carry comprehensive, including theft. But even those owners who have theft insurance aren't home free.

In many cases, there are large deductible amounts that the owners have to pay out-of-pocket before the insurance kicks in.

In cases in which cars have been damaged, the amounts paid by the insurance company may not always match what repair shops charge. Plus, there is the inconvenience of being without a car or having to rent a car while your car is missing or being fixed.

"Car theft is not as innocent as it sounds," said Lt. Terp. "A lot of guys who used to be drug smugglers are now stolen car smugglers. It is getting to be more and more a part of organized crime, and I am not just talking things like the Mafia. Russian organized crime is very heavy into auto theft. These car-theft operations are financing much bigger criminal enterprises, including drugs and terrorism groups."

Perhaps the most disturbing factor in auto theft is carjacking, when autos are taken by robbery or force. The latest figures from a 1999 Department of Justice report reveals that carjackings rocketed from about 35,000 a year between 1987 and 1992 to some 49,000 a year between 1992 and 1996, and are expected to continue higher. Carjackings, in 1996, represented 3.5 percent of all auto thefts.

Experts believe carjacking may become more common as auto anti-theft devices get more sophisticated.

Rod Gibson is a freelance writer based in Georgia.

-- Posted: Sept. 23, 2003

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