Vehicle Thefts Surpassed 1 Million in 2022
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Vehicle thefts nationwide surpassed 1 million last year. This was a 7% increase over 2021 numbers and the first time thefts reached that total since 2008, according to a new analysis from the National Insurance Crime Bureau (NICB).
“We are seeing vehicle theft numbers that we haven’t seen in nearly 15 years, and there is very little deterrent to stop criminals from committing these acts,” David Glawe, president and chief executive of NICB, said in a statement. “We must reinvest in local law enforcement, provide the necessary resources for prosecution and community policing programs and implement early intervention programs given the high incidence of juvenile offenders involved in vehicle thefts.”
Law enforcement agencies and communities reported over 250,000 thefts in the fourth quarter of 2022. California and Texas led the nation last year with the most reported stolen vehicles at roughly 202,700 and 105,000, respectively. Among the 10 states with the most vehicle thefts, Illinois (sixth-highest overall) had the most significant year-over-year increase of 35%. Following that was Washington (third-highest overall), with an increase of 31% from 2021.
The remaining states in the top 10 were Florida, Colorado, Ohio, Missouri, New York and Georgia. NICB used data from the National Crime Information Center to conduct its analysis.
Thefts of Kia and Hyundai vehicles spiked in recent years. In September, the Highway Loss Data Institute (HLDI) called Hyundai and Kia vehicles “easy targets” since many 2015 to 2019 model-year vehicles lack electronic immobilizers.
Electronic immobilizers prevent thieves from simply breaking into a vehicle and bypassing the ignition. Immobilizers were standard on 96% of other manufacturers’ vehicles in 2015 but standard on only 26% of Hyundai and Kia models, according to IIHS.
Some insurers, including Progressive and State Farm, started refusing to write policies for Hyundai and Kia models in certain cities. Michigan’s Department of Insurance and Financial Services (DIFS) issued a bulletin reminding insurers the state requires they offer auto insurance to all residents regardless of make or model—including Kia and Hyundai vehicles.
“In other states, some insurers have attempted to deny or limit auto coverage for [Kia and Hyundai vehicles],” Anita Fox, director of Michigan’s DIFS, said in a statement. “Our new bulletin clearly states that such actions are prohibited in Michigan. DIFS will continue to ensure that every eligible Michigan driver can get the auto insurance they need to legally drive on Michigan roads.”
Insurers can respond to the “indisputably” increased risk of Kia and Hyundai thefts by charging more for comprehensive coverage or choosing not to insure them, Robert Passmore, department vice president of personal lines at the American Property Casualty Insurance Association (APCIA), said.
“That said, any action that insurer would take would have to be in accordance with state law,” Passmore said in a written statement. States have rules about rate filing, canceling, and non-renewals. Also, some states have “take all comers” requirements prohibiting insurers from denying coverage based on vehicle make and model.
Kia and Hyundai have software fixes and other anti-theft devices available to drivers. Vehicle owners should contact their local dealer for more information. And, when shopping for insurance, be sure to let the insurer know if their vehicle has had the software upgrade.
Last year’s roughly 1.02 million stolen vehicles were just under 2008’s total of 1.05 million. NICB noted that law enforcement may still report thefts from 2022, meaning the numbers may change.
NICB recommends that vehicle owners follow good security practices and that their auto insurance policies are current. Owners should roll up their windows, lock their car doors, park personal vehicles in a garage, and park in well-lit areas.
- Published in Blog
AAA Says Bad Driving Worsened Last Year
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Drivers increasingly engaged in dangerous behaviors last year. According to new survey data from the AAA Foundation for Traffic Safety, this put the brakes on a three-year decline in speeding, driving under the influence, and texting while driving.
The foundation found widespread increases in bad driving habits in 2021, but “most alarming” was a nearly 24% year-over-year uptick in the number of people who admitted to getting behind the wheel after drinking too much. A total of 7.3% of those surveyed admitted to driving under the influence of alcohol.
Those admitting to excessively speeding increased by 12.4% to nearly 51%, and those who said they drove within an hour of consuming cannabis rose by 13.6% to 5% of all people surveyed.
“The reversal in the frequency of U.S. drivers engaging in risky driving behavior is disturbing,” David Yang, the foundation’s executive director, said in a statement. “While drivers acknowledge that certain activities behind the wheel – like speeding and driving impaired, are not safe, many still engage in these activities anyway. We must be aware of the serious consequences of dangerous driving behaviors and change course.”
More than a quarter of those surveyed admitted to texting while driving in the past 30 days, even though 92% acknowledged doing so is dangerous. And while 88% of people agreed that aggressive driving behaviors, such as quickly changing lanes, is hazardous, nearly 23% admitted to driving aggressively within the past 30 days.
Insurance industry observers have noted the especially poor performance of personal auto lines of late is partly due to unsafe driving. Driving behavior worsened with the onset of the pandemic, coinciding with a decrease in overall miles traveled, and has not improved as traffic volumes normalized. Other factors cutting into personal auto profitability include supply chain disruptions, increasing costs of vehicles and replacement parts, and a shortage of skilled mechanics.
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Electric Vehicles Present New Insurance Challenges
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Electric vehicles (EVs) continue to gain traction in the U.S. auto market. Last year, Americans bought nearly 450,000 EVs—an 83% jump over 2020. With many federal and state governments pushing for lower CO2 roadway emissions, EV demand is expected to soar during the next decade.
This has commercial fleet owners wondering what a world without gas- and diesel-powered vehicles might look like, particularly when it comes to the potential exposures EVs could create. This article discusses the risks that could impact insurance costs for EV fleets.
Unique EV Risks
Because EVs tend to cost more than standard automobiles, their insurance rates are usually higher. However, other factors unique to EVs could also make insuring them costlier. Such factors include:
- Cyberthreats—Like most new cars and trucks, EVs offer connected car technologies such as Wi-Fi, data sharing and semi-autonomous systems that leave them vulnerable to cyberthreats. However, the public charging stations EVs rely on to recharge their batteries add another layer of risk. Charging stations may serve as an entry point for malware attacks, data theft, system outages, bugs and glitches. What’s more, once a data breach occurs in a single vehicle, it may be easier for a malicious party to access the rest of the fleet.
- Battery problems—There are several risks associated with EV batteries that can potentially impact commercial fleets. For example, battery manufacturing defects can lead to large-scale vehicle recalls, putting fleet owners at an increased risk of business delays. Additionally, under certain conditions, lithium-ion batteries that power EVs can ignite or explode. Notably, battery fires burn longer and hotter, release more toxic fumes and liquids, and spread faster over a larger area than traditional fires. Such an incident would create a whole new set of insurance challenges.
- Pedestrian accidents—One selling point of EVs is they run quieter than gasoline-powered vehicles. Unfortunately, this lack of audible engine noise may also put pedestrians at greater risk of being hit if they fail to hear an approaching EV.
Other Considerations
While uncertainty about new EV technologies will likely drive up insurance premiums initially, expectations are that prices will stabilize over the long term. Meanwhile, several other concerns will need to be addressed before EVs become scalable. These include the following:
- Scarcity of repair shops and parts—Very few auto shops can handle EV repairs, so it may be difficult to find timely service. Further, shops that do fix EVs often have trouble locating parts. This is partly because four key elements essential to battery technology—cobalt, graphite, nickel and lithium—are currently in short supply. Even if supplies can eventually catch up with surging demand, EV auto shops will remain at risk for supply-chain delays, as these rare elements are sourced from distant regions all over the globe.
- Costlier repairs—Most EV parts cost significantly more than parts for gas-powered vehicles. Batteries are especially high-priced and vulnerable to harm. An accident that might be a fender-bender on a standard car could result in an EV’s total loss if the battery takes serious damage. Adding to costs, EV repairs usually require more labor hours. This is in part due to EV technology’s increased complexity as well as auto mechanics dealing with the learning curve of working on unfamiliar machinery. As a new generation of technicians gains experience, repair times should shorten.
- Extreme weather concerns—It’s unclear how much of a role extreme weather will play in EV battery performance. Under severely hot temperatures, batteries, on rare occasions, have been known to ignite or explode. Under cold temperatures, batteries hold their charges for a shorter period of time. However, it’s unknown whether these drawbacks are significant enough to make EVs impractical in certain weather conditions or climates.
- High voltage hazard—A number of high-voltage electric cables run throughout the body of EVs. When an accident occurs, exposed cables could cause serious injury to passengers or first responders trying to free crash victims from damaged vehicles.
Conclusion
Although it probably won’t happen overnight, EVs seem positioned to dominate roadways sometime in the near future. Commercial fleet owners who start thinking about EV insurance challenges today will be better positioned to thrive in a post-fossil-fuel landscape.
Contact us today to learn more about insurance for EVs.
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Nonstandard Auto Insurance
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
When a driver buys auto insurance, the insurance provider will make a calculated risk by agreeing to cover them. In exchange for coverage, the driver pays the insurance company an insurance premium (typically monthly, semiannually or annually). This premium is based on various risk factors, including age, marital status, credit history, vehicle type and driving history. Sometimes, if a driver has significant operating risks, they may not be able to be covered as part of standard, low-risk insurance pools. As a result, they may be required to buy nonstandard auto insurance.
However, needing nonstandard auto insurance isn’t as uncommon as you might think. According to research from Verisk, a data and analytics company, 20% of premiums paid for auto insurance are for nonstandard policies. Other industry experts say this number could be as high as 40%.
While the average nonstandard auto policy won’t look much different from a standard plan, it often costs more overall. Nonstandard policyholders often find it a bit more challenging to find affordable coverage. Keep the following general guidelines in mind when getting coverage.
Who Typically Needs a Nonstandard Auto Policy?
There are a handful of groups of people who would typically need to purchase a nonstandard auto policy. One group includes drivers with major traffic violations or other significant operating risks on their records. A driver might earn this designation if they:
- Are under 25 years old
- Carry an SR-22 certificate, which certain states impose on drivers who commit certain driving offenses
- Have a tarnished driving record with numerous infractions for reckless driving
- Have had a DUI or OWI charge
- Drive a vehicle with a salvage title
- Have previously driven uninsured or underinsured
- Have a poor credit rating (most states allow insurers to consider credits when setting your rates)
- Carry a foreign license or have no driving record in the United States
- Have a high risk of accidents
Outside of this group of high-risk drivers, other individuals may need to purchase a nonstandard auto policy if they have a luxury vehicle, racecar or another type of vehicle that has a higher risk of theft or large losses.
These indicators show an insurer that, statistically, this driver may be more likely to have another high-cost claim or accident that the insurer would need to pay for on the driver’s behalf. Since the driver is now a greater cost risk to the insurer, they will have to compensate for that risk by charging the driver a higher premium. Every insurance company is different, which is why it’s important to work with a qualified agent to determine what type of coverage may be necessary.
Differences Between Standard and Nonstandard Policies
The primary difference between standard and nonstandard auto insurance policies is their cost. Nonstandard policies are offered only to drivers with the highest risk of causing accidents or filing significant claims on their policies. The higher cost that comes with the policy is designed to cover the additional cost and more frequent claims filed by these drivers, on average.
Some insurers don’t offer nonstandard policies, which might force drivers who have been newly classified as nonstandard to look for coverage from an entirely new insurance carrier. Still, nonstandard auto policies will generally contain all the coverage options available to regular drivers, and an agent can help a driver customize a policy to fit their needs.
Residual Market Auto Insurance Policies – Coverage for the Highest Risk Drivers
At times, some drivers will have such high operating risks that they will be unable to obtain insurance through even a nonstandard plan. To still get the coverage you are required to carry, they will have to obtain coverage through the residual market. The residual market is a pool of drivers managed by state regulators. When you apply for coverage through the residual market, your state’s Department of Insurance will then require one of the insurers operating in their borders to issue you a plan. Residual market plans are often among the most expensive policies available and should only be considered as a last resort.
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Reducing Auto Claims for Businesses
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Vehicle-related crashes are the leading cause of work-related deaths. In addition to the potential for loss of life, work-related automobile accidents expose businesses to liability risks, legal expenses, lost time, decreased productivity, and increased insurance and workers’ compensation rates.
Whether your business leases a single passenger car or owns an entire fleet of commercial vehicles, auto liabilities must be monitored in order to try to prevent these ramifications.
Businesses can actively manage auto risks by setting driver qualifications, creating driving rules, and implementing driver training. Review the following guidance to learn more about how to reduce auto claims for your business.
Set Driver Qualifications
Setting and keeping standards for drivers can greatly reduce the risk of auto accidents. Review motor vehicle records (MVRs) for all new employees; review them annually for every driver. MVRs contain important historical driving information on an individual’s moving violations, driving-under-the-influence (DUI) offenses, vehicular crimes and other types of point accumulations. Work with your risk management professionals to determine appropriate standards for your business. Some qualifications to consider are:
- No serious driving violations—In the past three years, drivers should not have any recorded DUIs, hit-and-runs, incidents of reckless or negligent driving, driving with a suspended license or driving 15 mph over the speed limit.
- Fewer than three moving violations—In the past three years, drivers should have fewer than three incidents of speeding, changing lanes improperly, running red lights or failing to yield.
- Fewer than two at-fault accidents—In the past three years, drivers should have no more than one at-fault accident. At-fault accidents include any incident where the driver is cited with a violation, negligently contributes to the accident, or is involved in a single-vehicle accident.
Mandate Seat Belt Usage
Motor vehicle-related injuries are twice as costly as other work-related injuries, averaging $72,500 per injury claim. Fortunately, wearing a seat belt can reduce the risk of injury or death by 50%. Create a successful seat belt policy by:
- Assigning a high-level manager to support the enforcement of a comprehensive driver safety program
- Using on-the-spot surveys, motor vehicle monitoring, collision reports and company training sessions to ensure drivers comply with company policy
- Asking employees to sign a pledge saying they will wear seat belts
Minimize Distractions for Drivers
Crash risks are two to six times higher when a driver is texting or manipulating a cellphone, according to recent studies. Even talking on a cellphone is a cognitive distraction that may pull a driver’s focus from the road. Eating, drinking, adjusting the radio, talking to vehicle passengers and checking the GPS also cause significant distractions. To avoid these:
- Consider banning all cellphone use, even if it’s legal in your state or if a hands-free headset is used.
- Try voice-controlled devices, such as GPS, which will allow drivers to keep more of their focus on the road.
- Consider policies to limit the number of passengers allowed in a vehicle during work hours.
Utilize Technology
The use of modern telematics allows businesses to analyze fleet data, make informed decisions and increase productivity while cutting costs. Ways to utilize technology include:
- Using telematics—In-vehicle telematics allow fleet managers to watch their drivers for risky behaviors in real-time. Monitored behaviors include speeding, hard braking, hitting the gas and not wearing a seatbelt.
- Using dash cams—Dashboard cameras, often referred to as dash cams, can be used to monitor drivers, promote safe driving practices, and reduce liability if an accident occurs.
- Before adding dashcams to your fleet, review state-specific laws on privacy concerns related to videotaping your drivers and the public.
Prevent Theft
Not only can motor vehicle theft cause costly business delays, but if you or an employee is in the car during the attempted theft, the result can also be dangerous or even fatal. Although vehicle theft is covered under comprehensive car insurance policies, preventing theft is the best way to avoid dangerous situations or expensive delays. To minimize the risk of theft:
- Keep doors locked and windows shut. This applies any time you are away from the vehicle.
- Hide valuables. Keep your wallet, purse, phone, and other valuables hidden to reduce a thief’s incentive to break into your vehicle.
- Park in secure, high-traffic areas. Park near guard booths or store entrances if parking in a public garage. Keeping your car in a locked garage at home is the safest option.
- Use anti-theft devices. Use steering wheel locks or gearshift column locks to make theft more difficult. Most new vehicles have tracking devices, but these devices can also be purchased for older cars.
- Exploit your vehicle identification number (VIN). VINs are used by law enforcement agencies to identify stolen cars. Paint the VIN under the hood, under the trunk and on the engine to make it more difficult for thieves to sell parts of your car.
Train Drivers
Drivers can be a significant source of liability behind the wheel. By implementing regular trainings, fleet leaders can build trust with their drivers and reduce the risk of accidents. Some topics to cover include:
Intoxicants—Drinking alcohol impairs a driver’s reaction time, steering responsiveness and lane control. Educate drivers on the dangers of driving while intoxicated and monitor their driving for signs of intoxication.
Defensive driving—Significant anger, aggression or road rage behind the wheel was expressed by 80% of drivers in a recent survey. Aggressive behaviors include speeding, tailgating, blocking cars from passing or changing lanes and “punishing” other drivers with brakes or headlights. Train drivers to:
- Maintain an adequate following distance
- Use turn signals
- Allow others to merge
- Use high beams responsibly
Drowsy driving—A 2017 census estimated there were 91,000 police-reported crashes caused by drowsy driving. These crashes occur most frequently between midnight and 6 a.m and often involve a single driver with no passengers. To avoid drowsy driving:
- Get a proper night’s sleep.
- Avoid drinking alcohol before driving.
- Check prescription or over-the-counter drugs to see if they could cause drowsiness.
- Pull over for a 20-minute nap if you feel drowsy.
Seasonal hazards—Be aware of changing seasonal hazards. On a similar note, drivers not accustomed to particular weather patterns may need additional training. For example, a driver who isn’t familiar with cooler climates may not be used to driving on ice. Below are a few items drivers should be mindful of in each season:
- Summer—Warm weather leads to an increased number of walkers and cyclists. Look for pedestrians and cyclists everywhere, especially in low-visibility conditions.
- Fall—Back-to-school season means more children on the road. Never pass a stopped school bus with red flashing lights.
- Fall also means a return to deer season. Avoid collisions with deer by staying alert, using high beams and wearing your seatbelt.
- Winter—With snow and ice on the ground, it’s important to drive slowly, accelerate and decelerate slowly, and increase the distance between yourself and other vehicles. When there are snowplows on the road, remember the road in front of them is usually worse than the road behind them. Pass with lots of room and keep your headlights on.
- Spring—The changing season means a return to roadwork construction. Stay focused and patient when driving in work zones. Be mindful of the reduced speed limit and remain alert.
Report an Accident
If an accident does occur, a great deal can be done to contain costs and minimize business interruption losses. Good reporting and proper procedures can help minimize the business costs. In the event of an accident:
- Pull your vehicle to the side of the road.
- Assess injuries.
- Don’t leave the scene of the accident.
- Collect as much information as possible.
- Alert the police or highway control.
- Begin the claims process with your insurer.
Purchasing the right auto insurance policy, keeping the proper documents in your vehicle, and ensuring your vehicle is emergency-ready with traffic cones and flares can be helpful if an accident does occur.
For more risk management guidance, contact your broker today.
- Published in Blog