Ohio tops in insurance claims for metal thefts - W.E. Davis Insurance

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6 May 2013
News Forum

By  Mark Williams
Originally printed in The Columbus Dispatch Thursday May 2, 2013

Ohio has the dubious distinction of being No. 1 in the country for insurance claims stemming from metal thefts, mostly involving thieves ripping off homes and businesses for valuable copper.

Businesses and homeowners in Ohio filed 3,228 claims from 2010 through 2012, 23 percent more than second-place Texas, according to a National Insurance Crime Bureau report released yesterday.

Thefts of metals have been on the rise in Ohio and across the country. Thieves have stripped sheets of metal from rooftops, stolen decorations from cemeteries, ripped apart air conditioners for the copper coils and stripped homes of wiring and piping, and then sold the pieces for scrap.

Construction sites, farm equipment and vacant homes and businesses are targets for thieves, according to the report. The problem has gotten so bad that unoccupied buildings have been blown up because of natural-gas lines being stolen, stretches of highway have been left dark after thieves stole wiring from utility poles and tornado sirens have been left inoperable because of stolen wiring. Thieves have even been electrocuted trying to steal live electrical wiring.

The Department of Energy has reported that metal theft costs U.S. businesses about $1 billion a year.

“ You have a knucklehead on the street stealing it and a knucklehead that accepts it,” said Frank Scafidi, an insurance bureau spokesman. Among metropolitan areas in the country, Cincinnati was sixth with 720 claims over the period, Cleveland ninth with 627 claims, and Columbus 13th with 444 claims. New York was first, and Chicago was second.

Of the 33,775 claims filed nationwide over the three years, 96 percent were for the theft of copper with the rest for aluminum, brass and bronze. After hitting record highs in 2011, copper prices have fallen but remain above historical averages.The report found that 55 percent of the claims were on commercial policies and 45 percent were on personal policies.

The report said in some cases, drug addicts looking for quick cash are behind the thefts, while in other instances, it’s an organized group or opportunistic thieves, such as employees of companies that work with metal.

“Anything that relies on energy transported through copper wire is a potential target,” Scafidi said. “From powering security systems at sensitive sites to heating the water in your hot-water tank at home, all are potential downrange effects of copper theft. But the silver lining is that as salvage dealers become more regulated, these thefts should level off. We’ll see.”

The report does not mean there are more cases of theft in Ohio involving metals than there are in other states, only that businesses, homeowners and others file for more insurance claims here.

The reason isn’t clear.

“This is really a tough one for us to get our arms around as to the specifics,” said Mary Bonelli, a spokeswoman for the Ohio Insurance Institute. “Claims-reporting processes could vary by state, meaning that more of these thefts are actually being tracked and reported by Ohio insurers than in other parts of the country.”

Martin Mullen, chief claims officer for Cincinnati Insurance, said he hasn’t noticed that Ohio is worse than other states when it comes to metal thefts.

The report did not put a dollar value on the claims filed by Ohio homeowners and businesses, and there is no indication from the report of how many metal thefts occur every year. Many homeowners and businesses may suffer losses from thefts that aren’t big enough to warrant a claim.

In Ohio, claims more than doubled from 466 in 2009 to 1,198 in 2011, but then fell slightly in 2012 to 1,142. Nationally, claims per month began to fall in September 2011 and declined for much of 2012, according to the report.

“We certainly saw a spike in 2010 and 2011 corresponding with the economy,” Mullen said.

Also unclear is whether increasing claims raise insurance rates for those filing them.

In response to the theft problem, state and local law-enforcement agencies have been cracking down on the sale of stolen metal.

Last year, state lawmakers adopted legislation that creates an electronic registry to coordinate scrap-metal sales data and track the activities of sellers and individual vehicles used by those sellers.

Columbus, for example, was the first community in Ohio to require scrap yards to submit daily online information to police about metals sold and maintains a do-not-buy-from list for scrap yards and pawn shops of people convicted of theft.

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