You know that old excuse—“my dog ate my homework”.
Well, try this one—someone stole the catalytic converter from my car. I first heard this excuse when my sister, who is a psychologist, called during her work day and told me her patent had just cancelled their appointment. She said it was the second time that month that her patients used the excuse that their catalytic converter had been stolen and they had to get their car to the shop. I decided to look into this phenomenon to see if it was a trend or my sister had just lost her popularity. I was surprised to find out the facts.
Covered Not Covered: Stealing Catalytic Converters from Cars
It appears this crime is not a new one but has become more popular with the rising cost of platinum. The New York Times reported as far back as 3/29/2008 in an article titled: “Thieves Leave Cars, but Take Catalytic Converters” just how prevalent this type of theft was becoming. In the article they wrote: “The catalytic converter is made with trace amounts of platinum, palladium and rhodium, which speed chemical reactions and help clean emissions at very high temperatures. Selling stolen converters to scrap yards or recyclers, a thief can net a couple of hundred dollars apiece. Exactly how much depends on the size of the car and its converter. But even a little bit is worth a lot. Converter thefts are the quickie crime du jour, not only in Chicago, where workers in auto body shops and other experts say it is increasingly a nuisance, but anywhere cars are, which is to say basically everywhere.
“These are definitely occurring more than they have in recent memory, and why that is, is definitely tied to the price of precious metals within converters,” said Frank Scafidi, spokesman for the National Insurance Crime Bureau. Replacement converters usually start around $450. When you start getting into the larger S.U.V.’s, it’s $1,000-plus, said Don Tommasone, owner of Village Automotive, a car care center just outside the city. The larger the catalytic, the more platinum. That’s the ones they’re stealing. It’s also easier to crawl underneath them. They don’t need to jack up the vehicle, they just saw it right off.” http://www.nytimes.com/2008/03/29/us/29converters.html
This is not just a crime that affects the individual owner of a vehicle but is also prevalent at used car lots, especially those that have poor security. The thieves can make a big hit by stealing the converters from all the cars for one big score. In a youtube video, the story is told of a car lot in Camp Washington where all 47 vehicles on the lot had the converters stolen for an estimated loss of $20,000. The owner of the lot estimates it takes less than three minutes to steal the converter and done by simply cutting off the unit. www.youtube.com/watch?v=e_P1F8ifQjg. Other articles report of these theft occurring at auto repair shops and new car lots.
Now for the Covered Not Covered question, starting first with the individual’s Personal Auto Policy. Clearly the theft of the Catalytic Converter is covered under the Comprehensive or Other Than Collision Coverage on a Personal Auto Policy. It is, of course, subject to the deductible. What we know is that in today’s economy our personal lines clients are trying to save money on their insurance and it is not uncommon for them to be carrying higher deductibles in the $500 and $1000 range or more. Which means the loss would fall below their deductible.
As for the 47 vehicles stolen off the used car lot, we would look to the Dealers Open Lot Coverage. Most of these forms will have a deductible per vehicle, for example $1,000 or $2,500. Some policies will be written with deductible based on “car limit”, for example a 5 car maximum limit deductible. Policies can be issued with a maximum deductible during a 12 month period, for example $150,000. This entirely depends on the policy being issued. In the example of the 47 vehicles and a loss of $20,000 would work out to be only an average of $425.00/vehicle which might fall below their deductible. An auto repair shop would have the same issue on their Garage Keepers Physical Damage coverage with the deductible per auto or loss with an annual aggregate deductible.
The only silver lining in this story is that I have been reassured that my sister has not lost her touch and her patients were telling the truth. The bad news is that this loss is happening everywhere and could happen to you.