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Theft Rates Raise Auto Insurance Costs 15-20%

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian auto insurance premium costs are 15-20 per cent higher “across the board” due to a relatively high vehicle theft rate, one industry executive telling Tribune Business the situation was being exacerbated by government processes that were still “in the Stone Age”.

Anton Saunders, RoyalStar Assurance’s managing director, said the absence of an automobile registry at the Road Traffic Department, combined with its lack of computerisation, meant there was little that could be done to eradicate fraudulent car sales.

He was backed by other leading insurance executives, who renewed long-standing calls for a Bahamian vehicle title system and a crackdown on wrecked vehicle imports as critical to combating high auto theft levels.

Mr Saunders, pointing out that Honda and Mitsubishi-branded vehicles were the most common targets for thieves, said RoyalStar Assurance had few Hondas in its insured portfolio.

But, providing an insight into the true cost of vehicle theft for the Bahamian public, he added: “The prices [premiums] are probably 15-20 per cent increased across the board because of theft.”

Asked what progress had been made on creating a vehicle title system, and introducing an auto tracking system such as Lo Jack, Mr Saunders replied: “None. We are still in the Stone Age.

“The issue is that the Road Traffic Department has not progressed along with 21st century procedures that can deal with certain things, like an auto registry that can eliminate fraudulent car sales and that sort of thing.”

Timothy Ingraham, Summit Insurance Company’s president, told Tribune Business that relatively high auto theft levels, and associated claims payouts, had “definitely” impacted motor premium costs in the Bahamas.

He reiterated calls for this nation to introduce a vehicle title system, which would enable all industry players, law enforcement authorities and auto purchasers to track its ownership chain and determine if it is ‘clean’.

“We certainly think a vehicle title system would be very useful for reducing incidents of theft, as it could trace a vehicle from the time it lands on the island through every time it is sold,” Mr Ingraham said.

He also joined the Bahamas Motor Dealers Association (BMDA) in calling for the Government to clamp down on wrecked vehicle imports, saying these were being used to “clean up the title” of stolen vehicles by swapping over their Vehicle Identification Numbers (VIN).

“These two things we feel would be a great start, and go a long way to reduced incidents of theft,” Mr Ingraham said. “Full computerisation of the Road Traffic Department would also assist.”

While the Lo Jack vehicle tracking system was present in the Bahamas, the Summit president said it was “not used to any great extent”. Still, he vouched for its effectiveness, telling Tribune Business that two of the company’s own vehicles, which were fitted witn Lo Jack, were traced after being stolen and the alleged culprits charged.

“The cost is quite prohibitive to the consumer and a barrier to any significant adoption of the system,” Mr Ingraham told Tribune Business of Lo Jack.

“The company thay brought it in had approached the Government with regard to reducing some duties on the system, but the Government’s position in the past was that it was an anti-theft device, and if they had to do it for Lo Jack they would have to do it for all security systems, and they were not prepared to give up that level of revenue at the time. If the economy picks up, it might be a different story.”

Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business that the number of stolen vehicles covered by insurance - and the subject of claims - “much less” than the total number stolen.

This was because the majority were subject to third party coverage, rather than comprehensive, with the former not covering theft-related auto losses. “While stolen vehicles do make up the claims number, and do have an impact on the rate of premium, I would say it is not the most significant issue,” Mr Ward said.

“A few years ago it would have been a very material number in the claims experience, but in recent times it’s not been as material as in the past. Some of it has to do with underwriting and claims initiatives we have put in place that have proven to be very effective.”

He emphasised the cost to the Bahamian economy and society, particularly those auto owners with only third party cover, who had to suffer inconvenience and finance a new vehicle.

Backing a Bahamian vehicle title registry as something that would make it “far more challenging for individuals to steal a vehicle and put it back on the streets”, Mr Ward said he understood this topic was being actively discussed at the Ministry of Transport & Aviation.

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