Analysis of 2006 Insurer Reports

Analysis of Insurer Reports Received Pursuant to Section 33112 of the

Title 49 of the United States Code 2006 Reporting Period Annual Report

Prepared for

National Highway Traffic Safety Administration Washington, D.C. 20590

Under Contract DTNH22-11-F-00297

February 2012

Prepared by AdSTM

8229 Boone Boulevard Suite 520

Vienna, Virginia 22182

Analysis of 2006 Insurer Reports

TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION .................................................................................................... 8 1.1. Background ......................................................................................................... 8 1.2. Legislative Requirements Affecting the insurance industry ............................... 10 1.3. Legislative Requirements Affecting the Department of Transportation.............. 11 1.4. Insurer Reporting Requirements ....................................................................... 11 1.5. Organization of the Report ................................................................................ 12

2. OVERVIEW OF 2006 INSURER AND LEASING COMPANY SUBMISSIONS UNDER THE THEFT ACT .................................................................................... 18

2.1 Insurance Companies filing calendar year 2006 Reports .................................. 18 2.2 Rental and Leasing Companies Filing 2006 Reports......................................... 19 2.3 Insurer Compliance with Reporting Requirements ............................................ 20

3. THEFTS AND RECOVERIES OF MOTOR VEHICLES DURING 2006 ............... 22 3.1 Thefts and Recoveries by Vehicle Type............................................................ 22 3.2 Procedures to Obtain Theft and Recovery Data ............................................... 26 3.2.1 Notifying Insurance Companies of Motor Vehicle Thefts and Recoveries . 27

3.2.2 Insurance Industry Procedures to Ensure Accurate Theft and Recovery Data ...... 27

3.3 Uses of Theft and Recovery Data ..................................................................... 28

4. SETTING RATES FOR MOTOR VEHICLE COMPREHENSIVE COVERAGE DURING 2006 .................................................................................................... 29

4.1 Basis for Comprehensive Premiums and Premium Penalties for Vehicles with High Theft Rates................................................................................................. 29

4.2 Rating Characteristics Used to Establish Comprehensive Premiums ............... 30 4.3 Other Rules and Plans to Establish Comprehensive Premiums and Premium

Penalties ........................................................................................................... 31 4.4 Identification of High Risk Vehicle Groupings and Associated Maximum

Premium Penalties............................................................................................... 31

5. INSURANCE LOSSES FROM MOTOR VEHICLE COMPREHENSIVE POLICIES DURING 2006 .................................................................................. 41

5.1 Number of Comprehensive Claims Paid By Insurers During 2006.................... 41 5.2 Number of Theft Claims Paid by Insurers During 2006 ..................................... 42 5.3 Insurer Payments for Comprehensive Claims During 2006 .............................. 45 5.4 Amounts Paid Due for Theft Claims and the Proportion Attributable to Vehicle

Theft .................................................................................................................. 46 5.5 Vehicle Theft Losses Reported by Rental and Leasing Companies ................. 48

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Analysis of 2006 Insurer Reports

5.6 Insurer Net Losses Due to Vehicle Theft .......................................................... 49 5.7 Dollars Recovered by Insurers through the Sale of Recovered Vehicles and

Parts.................................................................................................................. 50 5.8 Proportion of Money Retrieved Which Resulted from Vehicle Thefts................ 50 5.9 Comprehensive Claims for High Risk Vehicles .................................................. 52

6. PROGRAMS TO REDUCE COMPREHENSIVE PREMIUMS DURING 2006...... 53

6.1 Insurer Actions to Reduce Comprehensive Rates and the Conditions to Qualify for Rate Reductions ............................................................................................ 53

6.2 Number of Rate Reductions Issued in 2006 ...................................................... 54 6.3 Size of Discounts Offered by Insurers................................................................ 55 6.4 Eligibility Criteria for Anti Theft Rate Reductions................................................ 57 6.5 Thefts and Recoveries of Vehicles with Anti-Theft Devices ............................... 58

7. INSURER ACTIONS TO ENCOURAGE REDUCTIONS IN VEHICLE THEFTS DURING 2006 ........................................................................................ 60

7.1 Actions to Assist reduction in Vehicle Theft ...................................................... 60 7.2 Policies Regarding Used Parts ......................................................................... 62

8. CONCLUSIONS ................................................................................................. 65

9. REFERENCES ................................................................................................... 68

10. APPENDICES .................................................................................................... 70

A. Thefts and Recoveries for 2003-2007 Passenger Cars ................................. 71 B. Thefts and Recoveries for 2003-2007 Light Trucks........................................ 73 C. Thefts and Recoveries for 2003-2007 Heavy Duty Trucks............................. 75 D. Thefts and Recoveries for 2003-2007 Multi-Purpose Vehicles ...................... 76 E. Thefts and Recoveries for 2003-2007 Motorcycles ........................................ 78 F. Thefts and Recoveries for 2003-2007 Rental & Leasing Company Vehicles . 80

Cendant ................................................................................................... 80 Dollar/Thrifty ............................................................................................ 84 Enterprise ................................................................................................ 86 U-Haul.................................................................................................... 109 Vanguard ............................................................................................... 110 G. Summary of Insurance Responses to NHTSA Reporting Requirements in 2006 ............................................................................................................ 118

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Analysis of 2006 Insurer Reports

LIST OF TABLES

Table 1. Insurer Reporting Requiremens ................................................................. 13

Table 2. List of Insurance Companies Filing 2006 Reports...................................... 19

Table 3. List of Rental and Leasing Companies Filing 2006 Reports ...................... 20

Table 4. Insurance Company Compliance with Reporting Requirements, 2006 ...... 21

Table 5. 2006 Theft and Recoveries, Model Years 2003-2007 ................................ 22

Table 6. Thefts and Recovery Rates for Vehicles up to Four Years in Age, 1992 to 2006......................................................................................................24

Table 7. 2006 Thefts by Reporting Insurance Companies, Model Years 2003-2007........................................................................................... 25

Table 8. 2006 Vehicle Thefts by Reporting Leasing and Renting Companies, Model Years 2003-2007 ..................................................................................................... 26

Table 9. 2006 High Risk Vehicle Groupings and Maximum Premium Penalties, By Insurance Company ................................................................................................. 32

Table 10A. Allstate High Risk Vehicles for 2006 ...................................................... 33

Table 10B. American Family High Risk Vehicles for 2006 ....................................... 35

Table 10C. California State Automobile Association Typical High Risk Vehicles for 2006 ......................................................................................................................... 35

Table 10D. Mercury High Risk Vehicles for 2006..................................................... 37

Table 10E. Safety Group (Massachusetts) High Risk Vehicles for 2006 ................ 38

Table 11. Number of Comprehensive Claims Paid by Insurer (2006) .................... 42

Table 12. Number of Theft Claims Paid, by Insurer (2006) ..................................... 43

Table 13. Proportion of Theft Claims Paid Due to Vehicle Theft, by Insurer (2006) ..................................................................................................... 44

Table 14. Dollars Paid for Comprehensive Claims, by Insurer (2006) .................... 45

Table 15. Dollars Paid for Theft Claims and Percentage Due to Vehicle Theft, by Insurer (2006) ..................................................................................................... 47

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Analysis of 2006 Insurer Reports

Table 16. Vehicle Theft Losses by Reporting Rental and Leasing Companies (2006) .................................................................................................. 48 Table 17. Net Losses Due to Vehicle Theft (2006) ................................................. 49 Table 18. Dollars Recovered through the Sale of Recovered Vehicles and Parts,By Insurer (2006) ......................................................................................................... 50 Table 19. Proportion of Dollars Retrieved which Arose from Vehicle Theft (2006) . 51 Table 20. Comprehensive Claims for High Theft Risk Vehicles, by Insurer (2006) . 52 Table 21. Vehicle and Policyholders Receiving Premium Reductions, by Insurer (2006) ..................................................................................................................... 55 Table 22. Difference in Comprehensive Premiums Between Policyholders With and Without Rate Reduction (2006) ............................................................................... 56 Table 23. Typical Devices or Conditions Qualifying for Anti Theft Credits ............... 57 Table 24. Theft and Recovery of Vehicles Receiving Anti theft Discounts (2006) .. 59 Table 25. Actions Taken to Assist in Reducing Vehicle Theft (2006) ..................... 62 Table 26. Summary of Policies Regarding Used Parts ........................................... 63 Table 27. Total Theft Claims (including contents) and Losses 1987-2006............... 66

LIST OF FIGURES Figure 1. Theft and Recovery Rate, 1992-2006 ....................................................... 24

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