Catalytic Converter Theft – Protecting Your Nonprofit’s Fleet

September 23, 2022
Bottom view of the front of a modern car. Suspension parts, exhaust system, catalytic converter. Selected focus.

Scott Pannone – Senior Risk Consultant for Lamb Insurance Service

By now, you’ve probably heard about catalytic converter theft. Across the country, car owners are suffering as thieves are stealing catalytic converters and forcing their vehicles out of service. In fact, the number of reported thefts rose from 1,300 in 2018 to more than 52,000 in 2021 according to CARFAX, a 1,215% increase. For nonprofits, which often operate on limited budgets, a catalytic converter theft can severely impact a fleet and as a result nonprofit operations.

Catalytic converters have become a target for thieves due to the value of their components. Converters are made of platinum, palladium and rhodium, and during the pandemic, each of these elements experienced rapidly rising values. For example, palladium prices rose from around $600 per ounce in 2001 to approximately $2,400 an ounce in 2021.

Unfortunately, one of the most common vehicles to experience catalytic converter theft is a favorite among nonprofits. Data from CARFAX found 1990-2022 Ford Econoline vans are among the top targeted vehicle classes for catalytic converter thefts. This van is often the vehicle of choice for nonprofit organizations due to its size and the comfort it provides in transporting personnel. Once its converter is stolen, these cars are left inoperable.

Due to the continued supply chain struggles and inflation, the costs to replace the converter and get vans back on the road have ballooned. The average cost for a catalytic converter replacement is $1000-$3000, which can fall under insurance deductible limits. As a result, many nonprofits choose to pay out of pocket for the replacement while they wait for extended periods to get their vans operational once again.

How are these thefts happening? All vehicles manufactured after 1974 contain a catalytic converter, so any parked vehicle can be a target. Criminals tend to target vehicles higher off the ground. However, they can also use a jack to slightly lift vehicles to access the converter. Then, they use an angle grinder to remove the converter, which only takes a few minutes.

With this issue growing rapidly, nonprofits should take the time now to employ proper risk management practices to protect their fleets. Here are some steps we recommend:

•  Enforce Secure Parking: We recommend nonprofits have staff and customers park in secure areas, such as garages or secure lots, which cannot be accessed by unauthorized individuals. When not possible, drivers should be asked to park in well-lit areas that can be easily seen by pedestrians. In driver training, drivers should be taught to park defensively. Because converters are located in the vehicle exhaust’s system, the right parking job can make them more difficult to access.

•  Consider Protective Devices: There are several protective devices for nonprofits to consider when safeguarding their fleets. They can mount motion-detector-operated alarms next to the catalytic converter, which would make a loud noise upon activation and alert people to the thief. We recommend cages that can be installed around the converter to prevent access. Owners and operators could also etch the vehicle ID number (VIN) which makes the converter more difficult to sell.

•  Work with Your Insurance Partner: Taking the time to contact your insurance broker is an important risk mitigation step. Your broker will be able to provide additional risk mitigation counsel, details on what your coverage protects you from, what additional protection you may need and more important information to keep your nonprofit organization safe.

In the event a theft does happen, owners should immediately contact authorities and submit a police report. Insurance companies often need that to process claims. After contacting the police, they should submit a claim to their auto insurance carrier, including their name, date and time of incident, a description of the incident, car details and contact information for the driver and any witnesses, to facilitate the recovery process

Now is the time for nonprofit leaders to take proper risk mitigation steps to protect their fleets from catalytic converter theft to keep their operations running. Taking these steps and working with an insurer can help you protect your nonprofit organization from the growing risk of catalytic converter theft.

Lamb recognizes that COVID-19 has created many challenges for nonprofit and human service organizations. That’s why we’ve made it EASY for you to submit changes to payroll for your workers’ compensation policy and vehicle schedule for your auto policies. Click below to proceed with your change requests.