Carjacking Spikes Worry Insurance Industry; Could Lead to Higher Premiums

Epidemic of carjackings, auto thefts may drive up insurance premiums

Carjackings have spiked in recent years, along with auto thefts, and besides some victims enduring the trauma of a sometimes violent event, many auto owners may be paying the price with increased car insurance premiums. 


  • Car thefts rose almost 30% in 2021 over 2017, according to data from NICB.
  • Most carjackings are now committed by juveniles who sometimes might be part of a larger ring of chop shops or use vehicles for drive-by shootings, NICB has found.
  • Some major U.S. cities data suffered 200%-plus jumps in carjackings over the past two years, with New York experiencing a 286% spike.
  • Auto thefts contribute to rising premiums for insurance policies.
  • Comprehensive policies cover thefts of auto while strict liability policies do not.
  • Insurers offer tips to help prevent theft or get a vehicle back such as installing anti-theft devices and not leaving vehicle title registration in the car.

Carjackings spike to alarming levels in U.S. cities

The National Insurance Crime Bureau (NICB), which studied trends in various U.S. cities and analyzed them stated in recent testimony before the U.S. Senate, “put simply, the numbers are staggering.”  

According to the NICB CEO David Glawe, who testified March 1 in a hearing before the U.S. Senate Judiciary Committee on federal support for preventing and responding to carjackings, New York has seen a 286% increase in carjackings from 2019 to 2021.

New York is hardly an anomaly. Philadelphia experienced a 238% increase in carjackings over the same two-year span, Chicago by 207% and Washington, D.C., by 200% over the past two years. Glawe pointed out that in 2019, D.C. had 142 carjackings but in 2021 there were 426 carjackings  in the nation's capital.

New Orleans and Denver also saw large jumps as cities across the U.S. and even some suburbs report more carjackings, according to Glawe.

NICB, which collects data on auto thefts nationally and across many local jurisdictions, said in a press release accompanying Glawe's testimony that car thefts nationwide increased by 16.5% in 2021 compared to 2019 and nearly 29% compared to 2017. The numbers are increasing year over year, as well, from 2019 to 2020, and 2020 to 2021. 

Glawe also noted in his testimony that juvenile suspects outnumbered adults by more than two to one are used to provide parts for chop shops as well as can provide cars for anonymous drive-by shootings. NICB is calling for more community-based policing to prevent carjackings, which can snowball into other crimes, new bail laws and more enforcement. Restorative justice has been an option, as well.

Auto theft, including carjacking, contributes to higher premiums

Carjackings are a subset of auto thefts, and contribute to more auto insurance claims, which can raise the price of policies in areas where they occur. 

Robert Passmore, vice president, auto and claims policy, for the American Property Casualty Insurance Association, said that according to data from the NICB, auto thefts reached their highest level in a decade in 2020.

Passmore said that there are indeed also reports that the incidents of carjacking, a type of auto theft, have increased dramatically in a number of cities. Insurers care about safety for all motorists first and foremost, he told Investopedia. "These trends are very troubling and are one of many factors impacting insurance costs," Passmore said.

However, the most significant factors impacting the cost of auto insurance are still the cost of bodily injury and damage claims related to crashes as well as weather events, he added. 

Car insurance rates are going up in general now for many reasons, including supply chain issues, labor shortages and inflation, according to a spokeswoman for the Insurance Information Institute. Sadly, fatalities are also up. More auto theft and fraud are also impacting auto insurance rates, which are under pressure and now returning to pre-pandemic levels, according to the Triple I. 

Auto thefts increased by 9.2% in 2020, after declining in the two years prior. For more on the most-stolen autos, check here, but in general they include popular Japanese models and pick-up trucks. Luxury cars like Mercedes, used as a "bait car" provided by NICB in a New York auto theft task force law enforcement operation, are mostly used for joy-rides.

NICB has teamed up with local and federal authorities to help stop car jacking rings or activities. For example, the organization helped the San Bernardino County Sheriff Deputies last year identifying 11 stolen vehicles and their respective insurance interests after the deputies stopped a vehicle pulling a trailer loaded with auto parts. The vehicle itself had been carjacked. 

The federal carjacking statute says the obvious cost is reflected in increased auto premiums, but individuals also pay the cost by spending money on anti-theft devices and off-street parking to protect their vehicles. 

Tips for lowering risk offered by experts

Auto insurers like Geico , Allstate and even universities offer consumers and campus residents a host of tips to thwart car thieves.

These include obvious safety measures of locking the car even while driving closing the sunroof and removing valuables, entering new vehicle quickly, being cautious especially at night and buying anti-theft devices, which can lead to discounts from the insurance company. Visible and audible security devices are often a deterrent as are a vehicle's VIN number etched in the glass of the windows. Allstate suggests installing a tracking system with GPS technology.

However if you are confronted by a carjacker, armed or not, do not resist —it is better to lose one's car than be injured or lose one’s life, all experts agree.  "Unlike auto theft, a carjacking involves violent confrontation with an offender or the perceived threat of violence that could cause death or serious bodily injury," the NICB states.

While most thefts are made by professionals or those juveniles exploited by professionals for dismantling in chop shops or even exported to other countries, there are joy-riders who like luxury vehicles, according to Geico. 

The insurer also cautions drivers about the carjackers who employ the bump-and-rob technique, purposefully creating a fender-bender at a stop light and then taking the vehicle when the driver gets out to check for damage. Insurers and public safety officials advise drivers to stay alert at red lights and leave room to maneuver around the vehicle ahead when stopped. 

Texas A&M University, which issued a bulletin on carjackings, acknowledged that "experts say that women are more likely to be targeted than men because thieves think that women will put up less resistance." While carjackers are more likely to victimize those driving alone, sometimes they also threaten those with small children because they often do not see them as they are approaching the vehicle.

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