Theft from car dealerships on the rise

Jeanine Mason, Head of Underwriting at CIB Insurance Solutions (CIB)

Criminal gangs looking for expensive vehicles are increasingly targeting car dealerships, with eleven vehicles being stolen from showroom floors in the Western Cape in the past few months. However, with these vehicles simply being driven away rather than broken into, many dealerships only find out after the theft has taken place that their insurance does not cover them.

According to Jeanine Mason, Head of Underwriting at CIB Insurance Solutions (CIB), most insurers have a forcible and violent entry clause on their wordings, which means a vehicle is not covered unless it has been broken into. “If someone walks into a showroom and drives off in the car then the vehicle is not properly covered as there was no forcible entry into the vehicle. As a result, the insurer is unlikely to pay out on such a claim.”

The eleven cars that were stolen include a Lexus, Mercedes-Benz, Volvo and Range Rover, all of which were stolen from dealership floors across the Western Cape. The syndicates pose as sub-contractors in work overalls and carry clipboards before getting in the vehicles and driving them away.

Mason says this type of vehicle theft appears to be a growing trend in South Africa as criminals devise innovative new ways to obtain brand new vehicles. “It is vital both dealerships and brokers are made aware of these changing tactics. We have seen a noticeable decline in the number of break-in types of losses on cars, as thieves are instead becoming increasingly intelligent in the way they seize control of vehicles.”

“For example, if a dealership sends a vehicle into a wash bay to be cleaned and leaves the keys in the car, this can present a perfect opportunity for a criminal to drive the vehicle off the premises.”

As a result, CIB has catered for an option in which the motor dealer can have the forcible and violent entry clause deleted to ensure that this type of theft is covered.

“There is a huge need for this type of cover, particularly as criminals are constantly changing the way they operate in order to stay ahead of the game. Most dealers do not understand the risk involved and assume that they are covered until a claim arises.”

She says strict security access and effective risk control measures can help to alleviate some of the potential risks to car dealerships. “It is important that dealers implement effective risk management measures such as restricting access to certain parts of the showroom and keeping car keys in a SABS approved safe on the premises rather than in the vehicle’s ignition.

“While it is not possible to always prevent such theft, it is important that dealerships minimise any opportunity and even more importantly, make sure that they are properly covered in the event of a theft occurring,” says Mason.