Theft of a car is a horrible experience that leaves victims scared and worried. Finding out that your auto insurance covers theft could be a ray of sunshine in an otherwise bleak situation.
For instance, there has been an increase in car theft in the year of the coronavirus. According to the National Insurance Crime Bureau’s preliminary data, there were 873,080 auto thefts in 2020, up to 9.2 percent over the previous year.
And auto theft costs more than $6 billion every year, with an average loss of approximately $8,900 per vehicle.
But if you do have insurance, you’ll be insured for both outright theft and damage to your vehicle caused by a break-in. Your car will be compensated up to its actual cash value (ACV), less your deductible.
Hence, a stolen car is covered by car insurance, but only if you have comprehensive coverage.
Though many types of car insurance cover vehicle theft, whether or not yours does depends on the specific terms and conditions of the coverage you’ve chosen.
Also keep in mind that even if your coverage covers car theft, personal property in the stolen vehicle isn’t covered. Claims are submitted with your homeowners or renters insurance in this case.
Remember to secure your car, take your keys with you, and park in well-lit areas to protect yourself against auto theft. However, if you become a victim of auto theft, here’s how your insurance company may assist you – and what you should do to safeguard your funds.
Table of contents
- Does Car Insurance Cover Theft?
- What Kind of Theft Insurance Do I Need?
- Is Comprehensive Insurance Worth the Money?
- How Does Comprehensive Coverage for Theft Work?
- Car Insurance: Liability vs. Comprehensive
- Is Your Auto Insurance Going To Cover Personal Goods Stolen From Your Vehicle?
- How to Make Sure You’re Covered and Check Your Coverage
- What Should You Do If Your Vehicle Is Stolen?
- How Much Will My Car Be Worth If It’s Stolen?
- How Can I Keep My Automobile From Being Stolen?
- What Happens If My Stolen Vehicle Is Found?
- Final Thoughts
- References
- Recommendations
Does Car Insurance Cover Theft?
A stolen car is covered by car insurance, but only if you have comprehensive coverage. This coverage pays the current worth, or actual cash value, of your vehicle if it is stolen and not recovered.
A deductible is an amount you must pay before your insurance will cover the rest of your claim.
Compare the worth of your automobile to the cost of your deductible and how much you pay for coverage if you have an older vehicle. You probably don’t need comprehensive insurance if the difference isn’t significant.
If you have a car loan or lease, you may be required to purchase comprehensive and collision insurance combined.
This could result in a significant rise in your insurance rate, as collision insurance can cost twice as much as comprehensive insurance, if not more.
Even so, you should be able to get a good deal. To obtain the greatest deal, browse about and compare vehicle insurance prices.
What Kind of Theft Insurance Do I Need?
The only sort of auto insurance that covers vehicle theft is comprehensive coverage. Insurers treat a car theft claim as if it were a total loss.
The real cash worth of your vehicle, minus the deductible, is paid out under comprehensive coverage. The fair market value of an automobile is its depreciated value, which is its actual cash value.
So, if your stolen car has an actual cash worth of $8,000 and your policy has a $500 deductible, you’ll be eligible for a maximum insurance settlement of $7,500.
According to a survey conducted by iSeeCars, automobiles depreciate at a rate of 49.1 percent in the first five years.
Some SUVs and trucks, such as the Jeep Wrangler Unlimited and Toyota Tacoma, depreciate more slowly, while others, such as the BMW 7 Series and Mercedes Benz E-Class, degrade more quickly, up to 72.6 percent in five years.
Here are some examples of settlements you might get when submitting a comprehensive insurance claim for a stolen car, based on Kelley Blue Book car values.
$500 DEDUCTIBLE | $1,000 DEDUCTIBLE | $1,500 DEDUCTIBLE | $2,000 DEDUCTIBLE | |
| 2018 Ford Escape | $10,135 | $9,635 | $9,135 | $8,635 |
| 2020 Toyota Camry | $16,710 | $16,210 | $15,710 | $15,210 |
| 2021 Hyundai Kona | $15,396 | $14,896 | $14,396 | $13,896 |
Note: Gap insurance will cover the difference if your auto loan debt exceeds the value of your car and it is stolen.
Is Comprehensive Insurance Worth the Money?
Comprehensive coverage protects your car against theft and damage that isn’t caused by a collision. Vandalism, falling objects (such as hail or a tree branch), and water damage are all common risks covered by insurance.
Comprehensive insurance can assist cover car theft, stolen automotive parts, and damage caused by a break-in (such as broken windows or damaged door locks).
If you’re leasing or financing your vehicle, your lender will almost certainly need comprehensive coverage. Comprehensive coverage is not required if you own your automobile outright.
Depending on your circumstances, purchasing comprehensive coverage may be a sensible financial decision.
According to the Insurance Information Institute, the average yearly comprehensive insurance cost for car owners is roughly $134.
Consider the actual cash value of your vehicle before purchasing comprehensive coverage if it isn’t financed or leased.
“It makes sense to obtain comprehensive coverage if it costs $100 per year and my car is still worth $2,000,” Paulson explains. When the car’s value falls below $1,000, it may not make sense, according to Paulson.
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How Does Comprehensive Coverage for Theft Work?
There is a deductible and a coverage limit with comprehensive coverage. The amount you pay out of pocket for a covered claim is referred to as a deductible.
When you buy comprehensive coverage, you choose your deductible – for example, $500. The maximum amount your policy will pay toward a covered claim is known as the coverage limit.
The depreciated worth of your vehicle is usually the limit for comprehensive coverage (also called actual cash value).
Assume you have comprehensive coverage on your car with a $500 deductible. Your car is many model years old and is worth $8,000 after depreciation.
If your car is stolen, you must first make a police complaint before filing a claim with your insurance company. If your claim is covered, your insurer will send you a cheque for $7,500 (the actual cash value minus your deductible) to assist you in replacing your stolen vehicle.
Keep in mind that comprehensive coverage does not cover the cost of a rental car in the event of a stolen vehicle claim. You’ll need rental reimbursement coverage on your auto insurance policy for this.
During a covered insurance claim, this extra coverage helps pay for mobility expenditures such as a rental car or public transportation fare.
Car Insurance: Liability vs. Comprehensive
There are a few different types of car insurance. The most basic is a liability, which is required in all states except New Hampshire and Vermont.
In the event of an accident, collision insurance can assist pay for additional damages. Vehicle theft is not covered by either liability or collision policy.
A complete policy is required if you want to insure your vehicle against theft. You can get a comprehensive policy that covers you if your car is broken into or stolen on its own or as part of a package deal with collision and other forms of coverage.
Is Your Auto Insurance Going To Cover Personal Goods Stolen From Your Vehicle?
No, personal things stolen from your vehicles, such as your laptop, briefcase, or mobile phone, are not covered by your auto insurance.
Personal things stolen from your car may, however, be covered by your renters or homeowners insurance, even if the car was stolen while it was not on your property.
Stolen cell phones, laptops, and other gadgets can all be covered by electronic device insurance.
How to Make Sure You’re Covered and Check Your Coverage
If your automobile is stolen or destroyed, you’ll be covered if you have comprehensive insurance. Liability and collision insurance, for example, do not cover a stolen vehicle.
That’s why, especially if you live in an area where car theft is more common, it’s always a good idea to double-check your policy and make sure you have the correct type of coverage.
You may do this by checking your policy declaration page on your insurer’s web portal, or by phoning your insurance provider and asking them to confirm what’s covered and what isn’t under your auto insurance policy. If you own several vehicles, be sure you have adequate coverage for each one.
What Should You Do If Your Vehicle Is Stolen?
When you discover your automobile isn’t where you left it, it can feel like a nightmare. Before reporting it stolen, make sure you’ve ruled out the following possibilities, was it:
- taken away because it was parked illegally?
- repossessed if you were behind on payments?
- seized or repossessed by a creditor?
Even if you have comprehensive insurance, you must take care to keep your wheels from being stolen.
“The vast majority of auto thefts occur when owners leave their keys in the vehicle,” says Tim Lohmar, prosecuting attorney for St. Charles County, Missouri.
“Thefts that occur at the car owner’s home are the most typical occurrence.” According to Lohmar, “vehicles are frequently taken from convenient stores, fast shops, or gas station sites where the owner leaves the automobile unattended for a small amount of time.”
Here’s what you should do if you’ve been a victim of auto theft:
1. File A Police Report.
It’s best to report a car theft to the police within 24 hours. The sooner the cops start looking for your stolen car, the more likely it is that they will find it. It also means you’ll be able to get started on your claim sooner.
To assist them in locating the vehicle, the police will request the following information:
- The license plate number and the vehicle identification number (VIN) (this information might be found on your vehicle title, insurance card or other insurance documentation)
- The car’s year, make, and model
- Theft’s location and approximate time of occurrence
- When the car was stolen, there was personal property inside.
- Marks on the car that can be identified, such as bumper stickers or dents
- Whether or not your vehicle is equipped with a vehicle locating device
The license plate number, vehicle identification number (VIN), color, make, and model of the vehicle will all be needed by the cops.
Law enforcement officers may also inquire about identifying marks on the vehicle, such as dents, customizations such as chrome wheels, and personal property within the vehicle.
The police will also inquire if you witnessed the thief and might perhaps identify him.
Be thorough and truthful while completing your police report. Regrettably, due to the prevalence of fraud, the police may need to rule you out as a suspect. Notify your auto insurer as soon as possible after filing your report to begin the claim procedure.
2. Make A Claim With Your Insurance Company
To file a claim, contact your insurance within 24 hours of the theft. The police will offer you a printed copy of their report or a case number that you may give to your insurance carrier as a reference.
To analyze your claim and calculate a payment offer, your auto insurance provider will need as much information as possible. When a policyholder files an automobile theft claim, Geico requires the following information:
- The title of the vehicle
- Before and after the theft, the whereabouts of all keys to the car
- Everyone who had access to the vehicle’s name and contact information
- Your vehicle’s description, including mileage, service records, and improvements
- Your auto lender’s contact information
- Account number for your insurance policy
A credit check may be performed by your provider to ensure that you are in good financial standing.
If you have a lot of debt and file a claim for a stolen car, it could create suspicions that you’re trying to commit fraud, which could result in your claim being refused.
Finally, you must notify your lender as soon as possible if you are leasing or financing your automobile.
Meanwhile, if you come across the automobile, call the cops and your insurance company right away. “Never try to solve a problem on your own. A stolen car isn’t worth causing significant damage or death.
Even if the automobile isn’t found, posting on social media can alert your neighbors that a thief is on the loose.
“Near-real-time information sharing has proven quite helpful on social media sites like Facebook and NextDoor,” explains Lohmar.
“The more knowledgeable and informed the public is, the more efforts they may take to avoid becoming victims of auto theft.”
If your car has been taken, file a police report right away. Keep in mind that installing a tracking device on your vehicle may aid with its recovery by the authorities. Contact your insurance company as soon as possible after filing a police report to register a car theft claim.
How Much Will My Car Be Worth If It’s Stolen?
Comprehensive coverage pays up to the actual cash worth of your automobile, minus your deductible, which you choose when you buy car insurance.
If the automobile is recovered and the repair cost is less than this, you’ll only get enough money to pay for the repairs.
Actual Cash Value
The actual cash value, or ACV, of your car, is the replacement cost minus typical wear and tear depreciation.
Coverage For Rental Car Reimbursement
Rental coverage is available as an add-on to many motor insurance policies. While your car is being searched for by the police, this coverage pays for you to rent a vehicle up to a set daily and overall maximum.
Rental car reimbursement from Geico, for example, covers up to $25 in rental car charges each day, up to a maximum of $750 per claim.
However, if your automobile is declared a total loss, your insurance company will eventually stop paying for your rental car, so it’s important to start looking for a replacement vehicle as soon as possible.
Any insurance deductible you may owe is not included in the ACV. The insurance adjuster will analyze your automobile’s make and model, age, accident history, Kelley Blue Book value, and other factors such as the wholesale price of your car in order to arrive at a valuation.
In addition to the Coverage For Rental Car Reimbursement
The value of your car is determined only by the vehicle’s main components. Your wheels and seats should be considered while determining your worth.
Auxiliary items, such as an MP3 player hooked into your auxiliary outlet, are not covered by comprehensive insurance. Even though your car wasn’t parked at home at the time of the theft, you may be able to file a separate claim for these things if you have homeowner’s or renters insurance. For this type of claim, you’ll almost certainly have to pay a separate deductible.
The adjuster’s objective is to give your car a fair, but typically low, value. Investigate the value of your vehicle to see if you’re getting a fair deal. You can make use of:
- Kelley Blue Book is a reference book published by Kelley Blue Book
- Edmunds
- The National Automobile Dealers Association (NAADA) is a trade organization that represents automobile (NADA)
Include all relevant information, including vehicle mileage and accident history, that your adjuster would examine. You may also look at dealership data to see how similar cars have sold in the past.
2. Objecting To Your Offer
If you believe your insurer’s reported ACV value is unjust, you can contest the offer and back up your claim with credible research. If you’ve made improvements to your car and can prove it with receipts and photos, the insurer may lower its estimate.
Let’s take a look at a real-life scenario to understand how your claim might pan out.
| 2019 Toyota Camry | Value |
| MSRP | $23,070 |
| After one year of average wear and tear | Approximately $13,000 |
| Adjuster’s designated ACV | $12,500 |
| Insurance deductible | $500 |
| Final claim payout | $12,000 |
Dave paid $23,070 for a new 2019 Toyota Camry. He drove his automobile for a year and totaled 12,000 miles on it. His automobile is still in excellent shape, with only one tiny scrape on the bumper, and Kelley Blue Book estimates a trade-in value of between $12,000 and $14,000.
Dave’s car was taken last week, and his tablet was found in the back seat. He reported the incident to the police and informed his insurance company.
The insurance adjuster looked at the vehicle’s history and mileage, as well as its Blue Book value and the prices of similar vehicles at a few nearby dealers. Dave’s car’s ACV was determined at $12,500 by the adjuster. Dave’s insurance policy requires him to pay a $500 deductible before coverage begins. As a result, Dave received a payment of $12,000 from the insurance company.
Dave’s comprehensive insurance covers just the vehicle’s permanent fixtures, therefore his tablet isn’t insured. His motor insurance was packaged with his renters insurance, but he’ll have to file a separate claim for goods stolen from the car, according to the provider.
A $500 deductible is also part of Dave’s renters insurance policy. Dave replaced his tablet with his own money because it was worth less than the deductible.
How Can I Keep My Automobile From Being Stolen?
Car thieves can be deterred by anti-theft systems such as external steering wheel locks, kill switches, and car alarms. Bonus: Having an anti-theft system may entitle you to a car insurance discount.
But you don’t need expensive equipment to keep your car safe. Here are some other ways to keep your automobile from being stolen:
If you’re not in your vehicle, switch it off and take the keys with you. You can even do it in your own driveway.
Every time you exit your vehicle, lock all doors, windows, and the trunk or hatch.
When possible, park in places that are off-street, highly visible, and well-lit. Don’t leave your car in an unattended parking lot or garage for an extended period of time.
On your keychain, never write your name or address. Thieves can use this information to locate and steal your vehicle if it goes missing.
Your vehicle should be parked with the front end facing an impediment like a wall or a guardrail. This makes it more difficult for thieves to tow or roll away your automobile if they can’t start it.
Turn the wheels toward the curb and lock the steering wheel when parking on the street. This makes it more difficult to tow your car away without causing damage.
If your VIN number isn’t already etched on your windows, have it done by a car dealership or a local police department. Thieves will have a harder time reselling your vehicle and its parts if you etch them.
Also, you can check this: Casualty Insurance: What Is It And How Does It Work?
What Happens If My Stolen Vehicle Is Found?
Authorities may be able to retrieve stolen cars more readily if they are outfitted with a GPS system in specific situations. Some advanced GPS systems include tracking technology, which allows law enforcement to track down a stolen vehicle’s whereabouts.
However, if a thief steals your vehicle, there’s a good chance you’ll never see it again. “We’ve discovered that most auto thieves, if successful, take stolen cars to chop shops for money,” Lohmar explains.
“Chop shops buy stolen cars, disassemble them, and resell their component parts for profit, usually within hours after the theft. “Most of the time, they’re acting as part of a broader criminal network,” Lohmar explains.
Your car may be damaged if it is recovered. Damage to original and custom equipment caused by car thieves is covered by comprehensive auto insurance, but only to a certain extent. “Something that isn’t standard equipment necessitates additional coverage,” says Gary Paulson, owner of Mid-Columbia Insurance in Yakima, Washington.
“Some corporations will cover alterations up to a certain dollar amount, such as $3,000.” However, if someone has a $7,000 radio in their car and it is stolen, they will not be protected to replace it unless they have additional coverage.”
If you receive a settlement and the vehicle is eventually found, the insurance company will own it. However, according to Paulson, you may be able to buy it back from the carrier.
Final Thoughts
With so many vehicle insurance policies to choose from, keep in mind that only a few will cover you if your car is broken into or stolen.
Liability and collision insurance alone will not protect you. If your automobile is stolen, only comprehensive insurance will cover it, and it will not cover personal stuff left inside.
To do so, you’ll need to make a claim with the company that issued your homeowners or renters insurance. Make sure to make a police report and an insurance claim as soon as possible—doing so will speed up the process and allow you to replace your vehicle sooner.
References
- valuepenguin.com – Does Auto Insurance Cover a Stolen Car?
- allstate.com – Does Car Insurance Cover Theft?
- time.com – Does Car Insurance Cover Stolen Cars?
- investopedia.com – Does Car Insurance Cover Theft?
- progressive.com – How insurers cover car theft
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