The theft of a car is a stressful thing. The financial and emotional costs may be high whether your car is missing off a parking space or whether someone breaks into your car and takes away your valuables. This brings up one of the frequent questions, is auto insurance theft covered?
The brief response is: yes, as long as you have the appropriate type of coverage. Here, we will discuss how theft coverage operates, the coverage and non-coverage items, and how you can be financially insured in case your car was stolen.
Understanding the Basics of Auto Insurance Coverage
Before exploring theft coverage, it’s helpful to understand how auto insurance works.
Types of Auto Insurance Coverage
The various types of cover in most auto insurance policies are:
Liability coverage – covers damages to others in case you are the cause of the accident.
Collision coverage – includes the damage of your vehicle following a collision.
Comprehensive coverage– covers physical damage not related to collisions such as theft.
Personal injury protection (PIP) or medical payments – pays medical bills.
Uninsured/underinsured motorist coverage – insures you in the event that the other driver is not adequately insured.
This is ultimate coverage when it comes to theft.
Does Auto Insurance Cover Car Theft?
The Role of Comprehensive Coverage
Auto insurance is only able to cover theft in case it is comprehensive. Stolen vehicles are not under the liability and collision insurance.
Comprehensive coverage protects your car from incidents beyond your control, including:
- Theft or carjacking
- Vandalism
- Fire
- Natural calamities such as floods or storms
- Objects falling, e.g. tree branches.
When your car is stolen, a typical car insurance company compensates you the actual cash value (ACV) of the car, less your deductible.
What Happens If Your Car Is Stolen?
Step-by-Step Insurance Process
If your vehicle is stolen, the claims process typically involves:
File a police report immediately
Theft claims require a police report to be taken by insurance companies.
Contact your insurance company
Include information such as the number of the police report, last location and description of the vehicle.
Waiting period
The insurers usually take 7-30 days before knowing whether the car is found or not.
Claim settlement
In case the car is not recovered, the insurers cover the actual cash value of the vehicle less your deductible.
In case the car is reclaimed, but in a damaged state, a complete coverage tends to cover the repair cost.
Is Theft Covered If Someone Steals Items From Your Car?
Personal Property vs. Auto Parts
Most drivers believe that auto insurance will cover the stolen personal properties but this is not true.
- Auto insurance does not cover personal items that have been taken off your car (such as laptops, phones, or purses). They can be included in your homeowners or renters’ insurance.
- Vehicle components that have been installed in factories, including stereo system, airbags or in-built navigation are covered.
The aftermarket accessories will only be covered on the condition of being added to your policy.
Does Insurance Cover Partial Theft or Vandalism?
When Your Car Isn’t Fully Stolen
Full coverage also covers partial theft which includes:
- Shattered windows, where they had tried to rob
- Stolen wheels or tires
- Damaged ignition systems
- Catalytic converter theft
When such happens, insurance will cover the repair or replacement expenses (less your deductible).
What If Your Car Is Stolen and Recovered?
Coverage for Damages After Recovery
If your stolen car is recovered, insurance typically covers:
- Damage to the property due to the theft.
- Vandalism.
- Lacking or broken car parts.
But insurance is not typically provided to cover:
- Amortization of vehicle value.
- Minor cosmetic wear.
- Missing personal items in the car.
Assuming that the cost of repair is more than the value of the car, your insurer can declare that it is a total loss.
Does Liability or Collision Insurance Cover Theft?
Clearing Up a Common Misunderstanding
It is a myth that every insurance is an insurance against theft:
- Liability insurance does not include theft.
- Collision insurance does not cover theft, except in the event that the car is in an accident and you are at fault.
Theft-related losses can only be covered by a comprehensive coverage.
Is Comprehensive Coverage Required?
Legal vs. Lender Requirements
Comprehensive coverage is generally optional.
However:
- It is usually required to be financed through lenders or leasing companies.
- It is highly suggested on newer or high-value cars.
You may technically stop comprehensive coverage in case your car is completely paid off, but you would then have full responsibility in case it is stolen.
How Much Does Theft Coverage Cost?
Average Cost of Comprehensive Coverage
Extensive coverage is generally cheap.
On average:
- Ranges between 100-300 annually, depending on the car and the place.
- Deductibles typically range from 250 to 1000 dollars.
Cost-influencing factors include:
- Vehicle make, model, and age
- Theft rates in your area
- Driving and claims history.
The relatively cheap price is compensated with the peace of mind of many drivers.
Are Certain Cars More Likely to Be Stolen?
High-Theft Vehicles
Some cars are targeted more often by thieves, including:
- Pickup trucks (especially older ones)
- Honda Civic and Accord
- Hyundai and Kia models (some years)
- Toyota Camry
Full coverage proves even more useful in case you drive a high-theft car.
Does Auto Insurance Cover Theft Due to Negligence?
What would you Do If You Left the Keys in?
Theft is often even insured even when you have left your keys in the car.
The coverage can be refused under exceptional circumstances:
- Fraudulent claims.
- Wilful permissiveness of theft.
- Specific policy exclusions.
The thing is that you should always read your auto policy carefully, because the rules are different with the different insurers.
How to Lower Your Risk of Car Theft
Practical Prevention Tips
While insurance helps financially, prevention is always better.
Consider:
- Placing anti-theft equipment
- Using steering wheel locks
- Parking in places with plenty of light
- Placing GPS tracking systems
- Locking doors and windows.
Other insurers provide discounts on vehicles that have security features.
Should You Get Comprehensive Coverage?
When It Makes Sense
The broad coverage is a clever decision in case:
- Your car is newer or valuable.
- You are residing in a locality with increased theft.
- You will not be able to buy a new car on your own.
- Your car is leased or financed.
In the case of older, low-value vehicles, you may find that the price is not worth it- but again, that is a matter of your own risk profile.
