Israel's car theft plague returns

Car insurance premiums on the rise  credit: Tali Bogdanovsky
Car insurance premiums on the rise credit: Tali Bogdanovsky

Thefts are back to pre-war levels and more, with insurance premiums rising again accordingly.

The damage from car thefts in Israel is estimated at NIS 2-2.5 billion annually. It mostly falls on the insurance companies, and thence on Israeli drivers, as insurance premiums rise.

At the end of December, "Globes" reported that the drastic drop in car thefts that followed the outbreak of the Swords of Iron war and the tighter security measures in Judea and Samaria had ended, and the numbers now appear to be back to where they were before the war, and even to have gone higher.

Insurance comparison agency Wobi estimates that 1,200 vehicles were stolen in Israel in January, but there are those in the insurance industry who put the numbers much higher. "Vehicle thefts, which came to a halt on October 7, have gradually retuned, and are now at a rate of 50 per night, and even more," a senior manager at one of the insurance companies says.

"If we assume the high end of estimates, of 1,750 stolen vehicles a month, then at an average value of NIS 95,000 per vehicle, the direct damage to the insurance companies is NIS 1.5-2 billion annually. To that we need to add another NIS 3,000-4,000 per vehicle for belongings such as child seats, and the loans or other sums that usually come into play when a new vehicle is purchased, and ultimately we arrive at about NIS 2.5 billion damage to the economy monthly," he estimates.

The result, as mentioned, is rising vehicle insurance costs. According to Wobi’s index, after the halt in the rise in premiums in the fourth quarter of 2023, premiums started to rise again in January, by 2%. Still, although comprehensive insurance premiums rose 3%, compulsory insurance premiums were actually 0.66% lower in January than in December.

Which models are most "stealable"?

Taking a closer look at the numbers, a prominent feature is a significant rise in premiums for small cars. Insurance for the Hyundai i10, for example, rose 7.3% in January in comparison with December. For the Kia Picanto, the rise was 6.8%, and for the Honda Jazz it was 5.6%. By contrast, for SUV models, there was actually a slight fall. The rate for the Suzuki Crossover fell by 3.1%, and for the Kia Sportage it fell 2.7%.

"The differences between rises and falls in insurance rates among the different kinds of vehicles indisputably stem from the thefts of the models," says Nadav Shreibman, financial controller and head of financial planning and analysis at Wobi. "In the end, rates are set in accordance with the loss ratio of each model (the ratio of total losses incurred to total premiums earned - the lower the ratio, the higher the insurance company’s gross profit, R.W.).

"Besides the profile of the driver, the companies calculate claims by model type, and this is where the aspect of thefts comes in. A Nissan Micra or a Hyundai i10 is very stealable in comparison with a Suzuki Crossover, which is less stealable. Six months ago, the whole market behaved uniformly, in rises and falls, but today there is a large variance between types of vehicles, stemming from the criterion of thefts."

Between January 2023 and January 2024, car insurance rates shot up by 23% on average. The biggest change from January 2023 was for the Toyota Corolla, with a rise of 33%, followed by the Skoda Octavia, for which the rise was nearly as much. The smallest rise was for the Ford Focus, for which rates rose by 7% in the period.

"The rise partly stems from the thefts, and partly from the rise in price of the vehicles themselves and of spare parts, and the high frequency of accidents, which has not fallen, except in October and November after the war broke out. Compulsory insurance rates also rose, among other things because the courts have raised the amounts of damages that they set," the insurance executive says.

Where are thefts worst?

Vehicle industry sources describe how the car thieves who come from Judea and Samaria work. "If we base ourselves on the estimate of 50 car thefts nightly, this means that just for the ‘successful’ thefts, between 100 and 150 people enter Israel every night, and divide into teams of two to three.

"There is usually a driver who brings the team to the theft site, the expert who breaks into the vehicle, and the driver who takes it away. The preferred areas for thefts are within half an hour to an hour’s drive from the border - from Afula in the north, to the towns in the Sharon, greater Tel Aviv, Rishon LeZion, Modi’in, and Jerusalem. This means that there is no problem entering the country, as the thieves are mostly people without work permits, and it also means that there is no problem crossing back from Israel within the Green Line to the territories with a car bearing a yellow (i.e. Israeli) number plate," an industry source said.

Suzuki thefts a concern

Besides the general rise in the number of thefts, the insurance executive also identifies a change in the type of vehicle stolen. "Since mid-January, between 80 and 100 Suzuki Jimny cars (a small 4x4 all-terrain vehicle, R.W.) have been stolen. This not a vehicle stolen for spare parts, and the question is whether this change does not raise the fear of an intention of using it to carry out a terrorist attack.

"In the same way as the vehicle itself was stolen, it can be used in a terrorist attack, whether on the way from Israel to the territories, or coming back to Israel within the Green Line carrying explosives," he explains. At this point it is worth recalling that the East Jerusalem resident who carried out the attack at Re’em Junction last week reportedly used a stolen vehicle.

Another trend noted in the insurance industry is the theft of electric cars, which are closing the gap on gasoline fueled cars. Industry sources say that electric cars are stolen for three main purposes: for the thief’s own use in the territories; for parts, the cost of which has climbed because of supply chain delays and the government’s mishandling of spare part imports; and to use the car’s battery to supply electricity in places where there is no regular supply, charging it by solar power during the day and using the stored power at night.

Insurance company requirements becoming stricter

In a report on the company’s January index of insurance rates, Shreibman of Wobi states that, in the wake of the rise in car thefts, the insurance companies are trying to curtail their losses, and are making their protection requirements ever stricter. In 2022, only 8% of drivers were required to comply with the strictest protection measures, but in 2023, the proportion rose to 16%.

Wobi says that deploying a location device costs a one-time payment for installation of between NIS 700 and NIS 4,500, plus an annual payment of NIS 360-960.

Insurance industry sources say that, in the face of the plague of car thefts, the most effective protection measure is indeed a location device and location monitoring, together with installation of physical safes that safeguard the car’s computer. On the other hand, there are companies that have stopped requiring the installation of a keypad and technological protection of the vehicle computer, since these are easily hacked.

Will insurance premiums go even higher?

"The Capital Markets, Insurance and Savings Authority is not allowing compulsory insurance premiums to be raised, and in comprehensive insurance the companies are in effect offsetting the discounts they are offering on the approved rates. There are customers who don’t yet benefit from these discounts. Some companies have almost reached the highest level to which they need to raise rates, because they are in profitable territory. The 50-60% that are still making losses will have to raise rates further. So we can expect more rises at some of the companies," an insurance industry source says.

The IDF Spokesperson’s Unit stated in response to the report: "IDF forces operate in full cooperation with the Israel Police and relevant security agencies and assist in arresting vehicle thieves. The IDF constantly operates to thwart terrorism, in overt and covert ways, and is prepared for any scenario to protect the security of Israel’s citizens."

A similar response was received from the Israel Police, with the addition that the police are taking action to seize and destroy vehicle breakers yards in Judea and Samaria.

Published by Globes, Israel business news - - on February 25, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Car insurance premiums on the rise  credit: Tali Bogdanovsky
Car insurance premiums on the rise credit: Tali Bogdanovsky
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