LOSSES due to auto-theft were $1.8 billion across the local insurance industry last year, according to figures released by the Insurance Association of Jamaica (IAJ). A thorn in the side of insurers, carjackings are also a major problem for Jamaican motorists, who as a result, face the daunting prospect of having to pay more for auto insurance.
An average of four auto-theft cases are reported to insurance companies each day, IAJ statistics reveal. Despite the number of claims falling by seven per cent to 1,262 in 2009, the average loss to the industry increased by 12 per cent.
" In Jamaica, theft of vehicles has been an increasing problem over the last few years," said Jamaica International Insurance Company (JIIC) managing director Andrew Levy.
"There was a significant change a couple of years ago when the thieves started stealing more expensive vehicles, so, although the claims numbers didn't rise (last year), the cost of it has increased significantly," he noted, adding "of course we've had some devaluation (in the currency) but theft is a very significant chunk of the yearly claims cost for the industry."
Levy told Sunday Finance that JIIC pays out some 20 claims of theft per month at an average of $1.5 million.
"You're talking about $20 million to $30 million a month for just one company," he emphasised.
And a big problem for insurance companies usually means a big problem for persons seeking insurance coverage. In this case, it's those seeking motor vehicle coverage in general, not just the victims of theft.
For the victims, it's bad enough that someone robs them of their main means of transportation, but to make matters worse, they'll end up paying higher premiums because of it. But, in general, motorists who own cars that are considered by auto insurance companies as being high risk for theft, pay higher policy rates as well. According to the IAJ, which aims to have a stolen vehicle database available on its website by next month, the Toyota Corolla (349 stolen vehicles reported), Nissan Sunny (110), Honda Civic (91) and Toyota Hiace (73) were the most frequently reported stolen vehicles in Jamaica last year, in that order.
"In Jamaica, Toyota and Nissan are by far (the most popular) vehicles on the road, therefore Toyota and Nissan are the vast majority of the vehicles that are stolen," noted Levy about a trend that Sunday Finance confirmed with the Stolen Motor Vehicle Investigation Unit in the Organised Crime Investigation Division of the Jamaica Constabulary Force.
According to Levy, the theft component of the motor insurance premium is somewhere in the region of 10 to 15 per cent of the overall premium.
"If somebody could get a 10 to 15 per cent discount on their motor vehicle premium, they'll jump," he noted.
So, against this background, if you don't want to be digging too deep into your pockets for auto insurance, choose a car with low insurance rates and protect yourself against automobile theft. The latter can be achieved through installing anti-theft devices in your vehicles, such as an alarm; ensuring that the doors to your vehicles are always locked; and not parking your vehicles in "risky" neighbourhoods.
Based on Levy's assessment of how theft factors in motor vehicle insurance rates, these few pointers can save you a lot of money.
