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Does Car Insurance Cover Theft?

Car break-ins and auto theft are on the rise in the US, with 2020 seeing an 11% increase in thefts over 2019. There is a multitude of reasons why this increase may be occurring. However, it’s important to note that there is little indication theft is slowing down.

With the increase in auto theft comes a correlated increase in drivers seeking coverage for their stolen vehicles and possessions. However, many in that predicament seeking repayment may be surprised that their policy does not cover auto theft. If you are one of those people seeking to protect yourself from future break-ins, read on to learn more.

Does Car Insurance Cover Theft?

Every car insurance policy is a collection of different types of coverage, each designed to do different things. These differences let you customize your coverage, which can also affect the cost of your insurance.

Most states require some auto coverage, and many auto lenders also require coverage. Therefore, it helps to understand what the types of insurance are:

  • Liability: Most states require this insurance, and it comes in two forms: bodily injury liability and property damage liability. This coverage pays for damage or injuries that you cause while driving.
  • Collision: Lenders often require collision insurance, which helps pay for your vehicle damages if you are involved in an accident with another vehicle or hit an object, like a tree.
  • Comprehensive: Comprehensive covers car theft, storm damage, vandalism, and other damages that can happen to your vehicle but do not typically involve a car accident. A lender might require this, but your state will not.
  • Medical Payments Coverage: If anyone in your vehicle is injured in an accident, MPC pays for medical expenses. Some states require this insurance; others do not.
  • Uninsured/Underinsured Motorist: This coverage helps if someone hits you without insurance or if that person does not have enough coverage to pay your bills. It’s required in some states but not required in others.
  • Personal Injury Protection: This coverage is required in some states and is not even available in others. It helps cover your personal costs if you’re in an accident. For instance, it will help with childcare expenses if you’re hospitalized, it can replace lost income, and might pay some medical bills.

Does Liability Insurance Cover a Stolen Car?

Almost every state requires liability insurance, but this insurance does not cover auto theft. Liability helps with expenses if you’re liable or at fault in a car accident. Bodily injury liability pays for the medical expenses and pain and suffering of people you injure in an auto accident. Property damage liability pays for the damage you cause to someone else’s property.

Liability insurance does not pay for your medical bills and the damages you’ve caused to your vehicle. It does offer you financial protection if you’re in an accident. Without liability coverage, the person you hit will come after you for their expenses, which can easily cause financial hardship for anyone. In this way, liability insurance protects your assets and financial health.

How Does Comprehensive Coverage on a Stolen Car Work?

Comprehensive coverage is the one type of auto insurance that covers a stolen vehicle. It also covers damage during a theft, vandalism to your car, and other damage unrelated to a car accident. If your vehicle has hail damage, is in a firestorm, a tree falls on it, it’s vandalized, or is stolen, your comprehensive coverage helps pay for damages.

The National Association of Insurance Commissioners released their most recent data and found that in 2019, the average cost for comprehensive insurance in the United States was $171.87 a year. Your policy may vary, and you can adjust your expenses by changing your deductible and coverage limits.

Insurers base comprehensive coverage rates on your vehicle’s actual cash value (ACV). For instance, someone steals your ten-year-old vehicle, and you have comprehensive insurance. The insurance company will determine what the value of your car was on the day it was stolen, and they will reimburse you that amount minus your deductible. If you paid $30,000 ten years ago for your vehicle, but today, it’s worth $10,000, the insurance company will assign the car an ACV of $10,000.

Does Car Insurance Cover Stolen Car Parts?

If someone steals parts of your vehicle, your comprehensive insurance will help. Not only does comprehensive insurance cover the stolen parts, but it also covers any damage to your vehicle during the theft. You’ll have to pay the deductible before your coverage steps in.

It’s important to note that custom parts are usually not included. If you’ve installed a new sound system and custom rims, those items will not be covered unless you purchase an additional policy.

Does Car Insurance Cover Vandalism?

Comprehensive insurance also covers vandalism. Some more common forms of covered vandalism include:

  • Slashed tired
  • Broken windows or lights
  • Spray paint or graffiti
  • Dents and scratches
  • Sugar or other substances put in the tank

Does Car Insurance Cover Theft of Personal Items?

Comprehensive insurance does not typically cover personal items in the vehicle. For instance, most comprehensive insurance policies will not cover the loss of your golf clubs stolen from the trunk of your car.

A homeowners or a renters insurance policy covers this type of theft. Each homeowners and renters policy is different, so a close inspection of your insurance will help you understand what is covered at home or in your vehicle.

Some auto insurance plans offer an additional policy covering stolen personal items. This policy comes with an additional fee and might not be necessary if part of your homeowners or renters insurance.

How Homeowners and Renters Insurance Help with Stolen Car

Part of any homeowners and renters insurance policy is coverage for your possessions, even when they’re not in your home. It’s a good idea to check your homeowners or renters insurance to see what type of protection your possessions have when they’re not in your home. Some policies have “off-premises” coverage which does not offer as much protection.

Bundling your homeowners or renters policies with an auto insurance plan is a way to ensure you have all the coverage you need. An agent can help you review these policies together to look for any coverage gaps or redundancies. Bundling insurance often comes with a discount, so you can save money while getting all the necessary insurance.

What To Do if Your Car Is Stolen

If you step outside and realize your vehicle is gone, ensure no one borrowed it and that it’s not towed. However, once you confirm it is stolen, it’s time to act.

  • File a police report: Contact your local police department as soon as you know your vehicle was stolen – the sooner, the better. You’ll need to be able to provide the following information:
    • Car’s make, model, year, color, and any distinguishing information
    • Car’s vehicle identification number (VIN)
    • License plate number
    • Your driver’s license number
    • Car’s last location
    • List of any belongings in the vehicle
    • GPS tracking information, if any
  • Contact your auto insurance company: After you file a report with the police, it’s time to contact your insurance company. Your insurance company will want the same information you gave the police, and they’ll also want specific details about your policy. Usually, they’ll want a copy of the policy report, but that’s rarely available immediately after you’ve reported the theft. Send them a copy as soon as you get it, which will speed up the process.
  • Contact your homeowners or renters insurance company: If you’ve bundled your policy, this step will not be necessary, your insurance agent will take all of your auto information, and they’ll want a list of personal items in your vehicle. If you have separate policies and personal items in the vehicle, you’ll have to report this to your homeowners or renters insurance for coverage.

Your insurance company and the police may first take steps to rule out any fraud. There is a two-to-four-week period where the insurance company waits to see if the vehicle turns up.

After that, the insurance company will have an insurance adjuster determine the vehicle’s value. Since the car is not around to inspect, they will base this determination on the reported condition of the vehicle and the fair market value at the time. This process provides an actual cash value for the vehicle.

The vehicle’s determined value is usually a negotiable number, and you can work to prove that your vehicle is worth more. Once you agree on a value, your insurance company subtracts your deductible, and the balance is the amount of financial damages you can expect.

Find an auto insurance policy that meets your needs.

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Find an auto insurance policy that meets your needs.

Get a quote