The Escalating Threat for Personal Lines Insurance – Top Tips for Insurers

The Escalating Threat for Personal Lines Insurance

The latest escalating threat to personal lines high-net-worth underwriting is known as tourism burglary. Tourism burglars obtain visas before arriving in the U.S., while others apply through a visa-waiver program that allows them to visit the U.S. for tourism or business without obtaining a visa within the first 90 days. Chile is at the center of this threat with 589 Chileans detained abroad in 2022 of which 119 were in the United States.¹

Dan Heath, a supervisory special agent with the FBI’s criminal investigations division, said “South American theft groups,” as the agency calls them, are a growing problem across the United States — and in countries including India, Britain, and Australia, where they often employ similar tactics. They represent an enormous threat right now in our country,” Heath said. “They are tending to thread the needle in avoiding both state and federal prosecution.”² 

Thieves easily leverage the power of the internet or dark web to share the most effective tactics – casing homes, beating the clock before police arrive, blocking some security systems, cracking safes, moving safes quickly – increasing the challenge for law enforcement. This has led to a substantial number of losses for the insurance industry and lost valued possessions for many unprepared Americans.  It’s not just homes, a group of Chilean burglars stole more than $1 million in merchandise from a jewelry store in Laguna Niguel, CA. Tourist burglars have also perpetrated crimes in Arizona, Colorado, New York, Maryland, New Jersey, Florida, California, Illinois, and Texas. ³ These thieves are targeting wealthy areas due anticipated hefty payoffs.

According to Jesus Bonilla, of the Nassau County Police in New York, “one gang alone broke into at least 100 private homes across the county. They allegedly stole cash, jewelry, electronics, watches, and designer clothes and handbags—the loot Bonilla believes amounted to millions—from mansions in towns like Bronxville, Greenwich, Hewlett Harbor, Old Westbury, and Sands Point. But that was just a fraction of the haul that the perpetrator was alleged to have swiped on a theft tour across the U.S. and in various countries around the world.”⁴

The increase in these losses and the lack of predictability creates difficulty in pricing high worth valuables, homes, and property. These thieves are clever and blend in as landscapers, golf course maintenance, local recreational crews maintaining trails or even hiding in the bushes as they study their targets. All too often, hired home helpers are compensated for information regarding the contents of the home. Even safes are being stolen. Because it’s risky to stay in the home for a long period of time, burglars will try to steal the safe, predicting that the safe will hold enough valuables to make the break-in worthwhile. However, there are ways to prevent such occurrences.

Homeowners need guidance in avoiding such a disaster.  The insurance industry needs to help their insureds prevent losses by providing effective recommendations to homeowners and evolving their loss prevention tools to match the current threat level.

Protecting Possessions and Reducing Losses

Burglar tourists target second floors of homes where they take advantage of unengaged or non-existent security systems as well as unlocked windows.  These groups are well prepared to deal with the challenges related to second floor access.  Beyond home security systems, the right safe can help thwart an attack.

Convenience

It’s critical that the safe is conveniently located to ensure its use on a regular basis.  Locating a safe in a master bedroom closet means that valuables will be put away after every use, not just laid down on a bureau or nightstand, reducing the risk of loss due to misplacement or theft as well as damage. Some safes are simply too heavy to transport up a staircase which presents a dilemma for second floor master suites. Underwriters should consider function and utility on balance with safe specifications.  In this scenario, a more effective approach over a UL-listed TL-15 may be a lighter RSC Level II bolstered with additional layers of protection placed in a master bedroom, even if the bedroom is on the second floor.

Proper Location and Installation

Although tourist burglar groups may come prepared with tools to break bolts and mounts, this will add extra time and increase their risk of getting caught. There’s no doubt that bolting a safe, where possible, provides an invaluable layer of protection, especially in terms of slowing burglars down.  In Colorado, an unbolted 3,000 pound safe stored in a shed was dragged from a residential property by a flatbed truck.⁵ While it is less common for safes over 1,000 pounds to be stolen, it demonstrates the importance of locating the safe in a secure area and bolting the safe down, or adding additional redundancy as outlined below. The thieves don’t care how much damage is caused by pushing over a safe, dragging it through the home and then pushing it out a window or down a marble staircase while attempting to steal it. The repairs of such unfortunate realities increase the claim cost well beyond the value of the stolen valuables.

Multi-layered Defense

Technology and the internet have led to more connected and sophisticated gangs of thieves globally which contributes to the sheer increase in home invasions and safe thefts. It is important to consider how every homeowner’s safe is integrated into an overall multi-layered, redundant theft prevention approach. There are many risk mitigation options. The first step is to bolt the safe securely to the floor, wherever possible, as previously mentioned. Next, it is ideal to wire the safe to a separate zone in a central security system that will alert in the event of tampering or moving. Glass plate re-lockers, once triggered by a burglar, release pins in the door preventing the safe from opening. The last line of defense is technology to track the location of a safe to improve the odds of a recovery if stolen.

Understanding Safe Ratings

Safe ratings are an important guideline, but the most effective rating for any given scenario needs to balance the security level with location and usage as well as independent rating testing and certification.  Below is a simplified view of safe ratings:

• B and C ratings: These ratings indicate certain safe body thicknesses, from one-quarter to one-half inch for the body and one-half to one inch for the door, successively. These rating standards were established by the insurance industry but have not been tested or certified by an independent organization such as UL (Underwriters Laboratories). In this case, their safety is a presumption based on the thickness of the steel and, therefore, provides a false sense of protection.
• RSC-rated safes: These are UL-listed safes rated at two levels, I and II, and are quite different from each other. RSC Level I is 5 minutes of penetration with tools a thief might find in most any garage. Whereas an RSC Level II is closer to the TL-15 rated safe’s more advanced tool set and penetration testing, providing a 10-minute minimum amount of time these safes withstood an attack. The RSC Level II comes at a much lighter weight making it more useful, therefore effective, under certain circumstances.
• TL ratings: These are UL-listed safes with the most common ones being a TL-15 or TL-30. The 15 and 30 numbers refer to the minimum time these safes withstood an attack. These ratings can also include multiple sides or torch tested (TRTL) ratings.

Learn more about burglar ratings.

Confirm that the safe is UL-listed

Some safe companies falsely claim to have UL-listed safes.  Others claim that their safes are better than UL, but they have not undergone any third-party testing and certification. Educate your customer on how to check to avoid purchasing a safe that won’t meet insurance underwriting requirements.

1. Check for the UL sticker on the safe.
2. Obtain certification documentation from the safe manufacturer, as all reputable safe manufacturers will have documentation.
3. Search the UL certified product database, UL Product iQ^®, the definitive source of truth. If the safe manufacturer built the safe body, the safe manufacturer will be listed for the UL security level of your safe. If the safe manufacturer did not build the safe body, ask the safe manufacturer who does and search the database for that organization.  If the safe manufacturer nor the safe body manufacturer are listed for the UL security level of your safe, it simply isn’t UL-listed.

Insureds Don’t Understand Policy Underwriting Requirements

Insurance carriers should consider creating separate collateral that clearly explains the underwriting requirements in easily understood terms. It is not unusual for requirements to be provided to an insured verbally or buried deep within a document. Be clear about the requirements, how to satisfy them, and make it easy to find them in written form. Seek out a safe manufacturer who is willing to not only create a branded program for insureds, but also accepts the burden and responsibility to guide insureds through the process. Safe experts with an understanding of insurability work effectively directly with agents to solve any barriers the insured’s home may present as well as provide insurers with helpful purchase and installation verification.

Author:
Jamiee Husted
Product Manager and Head of Customer Service