Bituminous Insurance Companies

National Equipment Register's 2007 Equipment Theft Report

The National Equipment Register (NER), an ISO company, recently released its fifth annual report on equipment theft in the United States. The report, 2007 Equipment Theft Report, is intended to provide equipment owners, insurance companies, and law enforcement with information to guide theft-prevention efforts and to allocate investigation resources. The data indicate what equipment is stolen and from where.

Since 2001, NER has developed databases of heavy equipment ownership and theft. These databases contain data that can be used to analyze trends in equipment theft. Owners and law enforcement agencies report thefts directly to NER’s database through the NER Web site. Insurers report thefts through ISO ClaimSearch®, the insurance industry’s all-claims database.

The NER database contains information on more than 88,000 thefts of construction and farm equipment in the U.S. Annual estimates of the cost of equipment theft vary from $300 million to $1 billion, with most estimates in the range of $600 million.

Key highlights of the 2007 report, and analyses, were:

• Texas was the top ‘theft state,’ followed by Florida, California, North Carolina, and Georgia. The top five States account for 31percent of the thefts, and the top 10 States make up 46 percent of the claim total.

Analysis: Theft levels closely follow the amount of equipment in a particular area. In other words, the States with the highest volume of construction and agriculture - and therefore the most machinery - have the largest number of thefts.

• Skid steer loaders were the #1 target, comprising 34% of all types of equipment stolen, followed by backhoe loaders (17%), tractors (13%), excavators (8%), and generators/compressors (7%). “Tractor” is a broad category, including compact, utility, and agricultural tractors.

Analysis: Two key factors determine the type of equipment that thieves are most likely to steal: value and mobility. Value is the primary factor, except for items too large to move on a small trailer (e.g., mechanical cranes are valuable but seldom stolen, as they are difficult to move).

• Equipment produced since 2000 accounted for 88% of thefts reported to NER in 2006. Half the thefts reported in 2007 were machines manufactured in the last five years.

Analysis: The newer a piece of equipment, the more likely it is that someone will steal it, which is in stark contrast to larger trends in automobile theft, where older models account for more stolen cars. While newer cars carry more sophisticated antitheft technology, construction and farm equipment design emphasizes productivity - the necessity for multiple operators leads to little or no equipment security.

• As little as 6.5 percent of stolen equipment is ever recovered.

Analysis: Several factors contribute to the low recovery rate of stolen equipment These include: delays in discovery and reporting of theft; inaccurate or nonexistent owner records; lack of prepurchase screening of used equipment; limited law enforcement resources dedicated to equipment investigations; complexities in equipment numbering systems; and limited, possibly inaccurate, equipment information in law enforcement systems.

The report concludes that equipment owners and insurers should focus risk-management efforts on easily transportable, high-value equipment, and that work-site security should be a priority since equipment often sits in areas with little or no physical security.

For more detailed information about the report, contact David Shillingford of NER at dshillingford@nerusa.com.

COPYRIGHT ©2008, ISO Services Properties, Inc.

The information contained in this publication was obtained from sources believed to be reliable. ISO Services Properties, Inc., its companies and employees make no guarantee of results and assume no liability in connection with either the information herein contained or the safety suggestions herein made. Moreover, it cannot be assumed that every acceptable safety procedure is contained herein or that abnormal or unusual circumstances may not warrant or require further or additional procedure.