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Catalytic converter thefts lead to legislation, loss control measures



An increase in catalytic converter thefts has caught the attention of the insurance industry and lawmakers, who are moving to crack down on the rising incidence.

Risk management efforts can also mitigate the threat and challenge potential thieves, experts say.

According to the National Insurance Crime Bureau, claims for stolen catalytic converters rose 325% to 14,433 in 2020, the latest year for which figures are available, up dramatically from just 3,389 in 2019 and 1,298 in 2018.

Catalytic converters, which are parts of the exhaust system of cars, reduce harmful emissions from internal combustion engines. They are targets for theft because they use precious metals, including platinum, palladium and rhodium, in the process. As of Monday, platinum was selling for nearly $1

,060 an ounce, palladium for $1,770 an ounce and rhodium for $12,350 an ounce, according to the Money Metals Exchange, which offers a compelling reward for thieves.

“The presence of these metals is what drives catalytic converter theft, as they can easily yield anywhere from $20 to $240 in salvage value depending on the amount and type of precious metal they contain,” said Dale Porfilio, chief insurance officer for the Insurance Information Institute in New York.

The problem is growing and spreading.

“The frequency of these claims has increased over the past 18 months,” said Kevin Shumate, Ostrander, Ohio-based vice president, US loss adjustment services, at Crawford & Co. “Stealing catalytic converters has been a problem in the US for some time, but thefts are increasing in Australia, Asia and the UK”

The popularity of larger sport utility vehicles has played into the hands of criminals.

“They often target sport utility vehicles because their ground clearance is sufficient for the thief to access the converter without having to use a jack, and that saves time,” Porfilio said.

Dave Carlson, Cleveland-based leader of Marsh LLC’s U.S. automotive and manufacturing industry, said larger vehicles also have larger converters that are potentially worth more. “People find it easy to take a catalyst. All you need basically is a hacksaw and if you have an electric drive or saw you can do it in a minute, he said.

Hybrid vehicles also aim for the more limited frequency of the converter’s use — it’s used only when the gas engine is engaged — leaving the metals inside less degraded and of higher value, he said.

“Industry sources indicate that hybrid vehicles and SUVs are primarily targeted. The Toyota Prius ranks among the top 10 most targeted cars in the country,” Mr. Shumate said.

Car manufacturers, fleet owners and individual operators can take steps to reduce exposure.

“People are advised to park in safe places, consider alarms and sensors and to consult their manufacturer on measures to make theft more difficult,” said Mr. Shumate.

The converter itself can be modified for identification purposes, and devices can be used to prevent theft, such as covers and steel plates.

“Parking vehicles in locked garages or fenced yards is ideal. If this is not available, it is recommended to leave vehicles in well-lit areas. Services are now available to etch the VIN on the catalytic converter, which can help restore the part if it is stolen, says Mr. Porfilio.

Automakers, many of which can have hundreds or thousands of cars, are “very aware of the exposure,” Carlson said, and have security protocols in place to prevent theft of any kind. “Theft has been a problem with major OEMs, so they’ve been very in tune with theft for decades,” he said.

Catalytic converter theft claims are often below the deductible threshold on the commercial coverage for large vehicle fleets, he said.

New technology also helps reduce exposure to diesel vehicles.

Modern diesel engines in medium- and heavy-duty trucks use diesel exhaust fluid to improve emissions and an aftertreatment system, meaning they do not have a catalytic converter. Aftertreatment systems consist of a diesel particulate filter and diesel oxidation catalyst, according to Larry Harlow, director of claims for Sentry Insurance in Stevens Point, Wis.

“Although the function of reducing emissions is the same, most aftertreatment systems do not contain the metals that make catalysts so valuable,” he said.

The problem has also caught the eyes of legislators.

“Some states are implementing greater enforcement and tracking systems, which will hopefully curb this type of theft,” Porfilio said.

In October 2022, New York Governor Kathy Hochul announced several measures to increase catalytic converter theft enforcement in high-theft areas by targeting unauthorized and illegal vehicle dismantlers, or “chop shops”. She also signed legislation that places restrictions on the purchase, sale and possession of catalytic converters by vehicle dismantlers and scrap processors.

According to the National Conference of State Legislatures, 12 states passed catalytic converter theft bills in 2021, at least 20 states passed 25 bills in 2022, and “the trend is likely to continue in 2023.”


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