How Can Moving & Storage Operations Lower the Risk of Catalytic Converter Theft?
How Can Moving & Storage Operations Lower the Risk of Catalytic Converter Theft? Can this be Covered Under Inland Marine?
One of our broker partners asked this question for their insured who had several catalytic converters stolen TWICE – on two separate occasions in less than 6 months! First, the coverage is not provided under Inland Marine as the vehicles are scheduled under the auto policy. Quite a bit of information follows and does assume you have Comprehensive coverage on the vehicle(s) for physical damage.
Without surveillance video equipment in the parking lot where the units are located, the risk of another theft is high. And with catalytic converter theft replacement claims ranging from $1,000 to as high as $30,000—depending on the commercial vehicle make (some newer models have two catalytic converters, so that’s double the loss)—it’s a risk not worth taking.
The Catalytic Converter Theft Market is Lucrative
Catalytic converter theft is not going away anytime soon. The precious metals used to manufacture these devices have created a multi-million dollar industry with scrap metal dealers willing to pay hundreds of dollars for the devices.
According to the National Insurance Crime Bureau (yes there is one for insurance!) there were over 14,000 catalytic converters stolen in 2020 and that jumped to 50,000 in 2021 and I think the numbers may be higher.
What Can you do to Thwart the Catalytic Converter Thieves and Lower your Risk?
Determine your risk level; are your vehicles prime targets for catalytic converter theft? Vehicles with ultra-low emissions are bigger targets because they have more rhodium, palladium and platinum. Vehicles with higher clearance are also bigger targets as it is easier to get under them and they don’t have to be jacked up.
Take preventative measures to protect your vehicles:
- ID your catalytic converter. Etch your license plate number onto your catalytic converter and consider painting it with a high temperature fluorescent paint. This makes the part identifiable to law enforcement and a reputable scrap metal dealer may decline to buy it.
- Invest in an anti-theft device. These can cost between $300 to $800, installed. There are a number of different types available including cages, shields or stainless-steel cable systems.
- Park in well-lit areas and/or have motion sensor lights which may deter thieves. Consider installing video cameras where you park your vehicles.
- Take advantage of digital technology with geofencing. Draw a geofence around your vehicle to alert you if it moves.
Minimizing the risk of catalytic converter theft is worth the investment. The cost to replace a stolen catalytic converter is between $1,000 – $5,000 and often higher, which is unfortunately below most Comprehensive Coverage Deductibles. Add in the down time to have replacement parts installed to get the vehicle back on the road, and you’re looking at a significant loss.
Legislation is Coming, but not Soon Enough
California and New York are leading the charge with legislation to address this growing issue having passed in October 2022. A federal bill, the PART Act, is making its way through Congress, which would require VINs to be stamped on catalytic converters and create a grant for VIN stamping of new vehicles.
I hope this information is helpful to you and your insureds. If any of my readers have additional tips, please feel free to share!
Terri Moran
Insurance industry veteran Terri Moran leads the underwriting and operational strategies for the MOVER’S CHOICE program. Throughout her career, Terri has held roles in leadership, underwriting and marketing with national insurers. A staunch industry advocate, she has served as a member of the WSIA Internship Committee, working to attract young professionals to career opportunities.
In her spare time, in addition to enjoying her family, she is a Member and past Chair of the Board of Directors for the Surplus Lines Association of California.