Patterns of Loss, Recovery, and Reimbursement
Statistics derived from the National Crime Victimiza- tion Survey confirm some commonsense predictions about insurance coverage and recovery. First, some types of coverage are more common than others. More people are insured against medical expenses than against property losses. Medical and dental costs are potentially more devastating than theft or vandalism of tangible goods, and health coverage often is provided by an employer as a fringe benefit of full-time jobs. Second, high-income individuals are more likely to buy crime insurance than low- income people (even though the poor are exposed to greater risks and suffer higher victimization rates). Third, larger losses are more likely than smaller ones to be reimbursed through insurance claims. The households that are most likely to receive cash set- tlements are those whose cars are stolen. Only a small proportion of families who suffer burglaries and larcenies are reimbursed. An even smaller frac- tion of people who are robbed or pickpocketed are insured against such losses. Most policies have deductible clauses that stipulate that the victim must absorb the first $500 (or some other sum) of the losses and cannot file a claim unless out- of-pocket expenses exceed this figure. Hence, most crime-imposed losses (which usually are small) can- not be recovered (Harland, 1981a).
Studies concerning actual patterns of burglary loss, coverage, and recovery are rare. One revealed that both the average amount stolen and the percentage of victims who are insured are positively correlated with family income. That means that wealthy families lose more to burglars but also are more likely to be insured than low-income households. In one study during the 1970s, only 1 family in 10 had purchased burglary insurance in the lowest income category, but about half the families in the higher-income cate- gory were covered. (Presumably, the rich were fully insured, but those data was unavailable.) In sum, although a small number of families recover substantial amounts, insurance provides relief for relatively few burglary victims (Skogan, 1978; and
Harland, 1981a). Some more recent data is avail- able from the NCVS. It indicated that the bigger the loss, the more likely the victim was to report the burglary to the police and to an insurance company as well. In 1994, just about 40 percent of households suffering a loss to burglars of $1,000 or more informed an insurance company about their misfortunes. In 2003, that figure dropped to 33 percent. By 2011, it stood at 35 percent of households losing $1,000 or more (Walters et al., 2013). It appears that fewer people currently have burglary insurance coverage for major losses than in previous years.
As for medical insurance coverage for expenses arising from hospital care, doctors, and medicines due to injuries resulting from violent crime, women were more likely to receive reim- bursement (73 percent) than men (57 percent). The lowest income grouping (61 percent) and the highest income grouping (95 percent) were much more likely to get their out-of-pocket costs paid by health insurance (from the govern- ment in the case of the poor; from private compa- nies in the case of the affluent) than the working poor (45 percent) who usually earn too much for Medicaid but too little to afford their own policies. All senior citizens received coverage of their bills under Medicare, but less than half (45 percent) of injured individuals between 20 and 24 years of age had health insurance coverage, according to the NCVS for 2006 (BJS, 2008d). As various phases of the federal Affordable Care Act go into effect, these percentages ought to improve.