Theives are exploiting a loophole in the law that called on dealers to run checks on where the metals had come from
There has been a spate of catalytic converter thefts with some insurers reporting a 600% rise in claims, according to broker BHIB.
The concentration of thefts seem to be targeted at older hybrid vehicles as these contain more precious metals than the newer vehicles, the models Toyota Prius and Auris have been targeted the most.
It follows the soaring price of rhodium this year with the precious metal now being six times more expensive than gold. As well as palladium being in a supply-demand deficit since 2019 which is expected to worsen this year.
A catalytic converter is a piece of technology that is used reduce vehicle pollution by controlling and converting the exhaust emissions from a vehicle into less toxic ones. These are made out of two ceramic blocks which are coated with precious metals platinum, palladium and rhodium.
BHIB’s head of claims, Tim Pearson, said: “Following an explosion of claims for theft of catalytic converters in the period between 2010-2012 due to the price of rhodium and palladium, we have seen levels of these claims dropping due to the implementation of the Scrap Metal Dealers Act 2013 which meant dealers had to run checks on where the metals had come from.”
Pearson said that thieves are now exploiting a loophole in this law and in the period 2018-2019 insurance claims for thefts have increased by 600% with the average cost being in the region of £1,000.
“We would urge our clients to take preventative measures wherever possible in order to deter thieves as much as possible,” he added.
Pricey parts
“It is more about the cost per accident. Not just catalytic converters but some hybrid and electric technology can be more expensive to repair and requires new and specialist help in order to do so,” he said.
It has made repairs more expensive and added to the severity of claims.
“All of that is having an impact. In terms of overall of claims costs, theft is still a relatively small proportion,” he said.
Worth cited that it accounts for less than 5% of its overall cost in claims.
“There has been a prevalence of higher value cars being stolen for their parts, these cars are broken down and sold off as spares, because the price of spares is so expensive. We have seen an increase in incidents of theft and an increase in claims costs per theft in 2020,” he added.
Why is rhodium so expensive?
Rhodium is a silver-white metallic element resistant to corrosion and is highly reflective.
It is considered to be the rarest and most valuable precious metal in the world.
The main use for rhodium is in catalytic converters designed to clean vehicle emissions, and the biggest producer of rhodium is South Africa.
According to Reuters rhodium prices rose to a record high of $10,165 in January after a supply squeeze pushed prices up more than $4,000 that month alone.
Rising demand and an uncertain supply outlook have lifted prices from a low of $615 an ounce in 2016, yet power shortages in South Africa where most rhodium is produced, threaten to reduce output.
BHIB has advised the following to prevent the theft of catalytic converters from happening:
- Park your car in a locked garage if possible
- If a garage is not an option, then try to park your car in a busy and well-lit area
- Try to park close to walls, fences, hedges or a kerb to make the theft more difficult – the exhaust should be closest to the fence/wall so thieves cannot easily get underneath that side of the car
- Avoid parking your car half on the pavement and half on the road, as this can expose the underneath of the vehicle and make it easier for thieves to access the catalytic converter
- When parking in a public car park, try to park alongside other vehicles and with your bonnet facing the wall or kerb. As the catalytic converter is positioned towards the front of your vehicle, this will make it harder for thieves to access it
- If you have a fleet of vehicles then try to use your low clearance vehicles to block access to the high clearance vehicles
- If your catalytic converter is bolted on, you can ask your local garage to weld the bolts to make it more difficult to remove. Alternatively, you can also mark your converter or etch a serial number on it
- Consider buying a catalytic converter clamp or cage to lock around the device to make it harder to remove
- You can also look into adding a tilt sensor to your vehicle which activates the alarm if a thief attempts to jack the vehicle up
Theft vulnerability
Martin Milliner, claims director at LV= General Insurance, told Insurance Times: “The theft of catalytic converters has become an issue and between 2018 and 2019 we’ve seen more than a 600% increase in the number of claims relating to catalytic converters with the average cost being around £1,000.
“Some manufacturers have responded to the theft vulnerability, redesigning their cars to make the theft of converters much more difficult but our advice to owners of cars susceptible to this type of theft would be to consider buying a clamp - like a padlock - to make it harder for thieves, park their car in well-lit areas, install an alarm on their car or put their car in the garage, if they have one.”
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