Website Quantifies Theft Rates’ Effect on Car Insurance Prices

Quote-comparison site Online Auto Insurance released on Wednesday the results of a premium analysis showing that location-based theft rates may significantly affect the prices drivers pay to insure against theft. The results come on the heels of a new National Insurance Crime Bureau (NICB) report indicating that the annual number of autos being stolen in the United States declined by 7 percent between 2009 and 2010.

To quantify the geographical component at work in insurance companies’ pricing structures, the site ran an auto insurance quotes comparison for the same policyholder profile in two California cities: Fresno and Carlsbad.

2010 theft rates and auto insurance prices for Fresno and CarlsbadThese two cities have very different track records for rates of stolen cars. According to the NICB, Fresno County had the highest rate in the United States in 2010. Carlsbad, on the other hand, had the lowest volume of vehicle thefts out of California’s major cities.

Data from the Census and an FBI crime report show that, in 2010, the city of Fresno saw about 920 vehicle thefts for every 100,000 residents. Carlsbad’s rate was about one-ninth that of Fresno’s. It had a rate of about 102 vehicles stolen for every 100,000 residents.

Although not as large as the difference in theft rates, the price difference between the cost of comprehensive coverage — the portion of a policy that protects against theft — was also significant.

The results indicated that the same person buying the same comprehensive coverage for the same car could pay between 26 percent and 135 percent more in Fresno compared with Carlsbad.

The disparity does appear to be attributable to the difference in theft rates, but there are many other factors that could be at work here.

In addition to theft, comprehensive also covers weather damage and most other damages not resulting from a collision. If the city of Fresno has other characteristics that lead to higher frequency and severity of comprehensive claims, or if Carlsbad has other factors that keep its frequency and severity of claims lower, these things could also have a significant influence on price.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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