The worst has happened. You never thought it would happen to you, but your car is not where you last left it, and you are very sure you did not let your friends have it. Your vehicle has been stolen.
But there is nothing to worry about, right? Car insurance covers car theft, and chances are they are going to compensate you for it, right? Does car insurance cover theft? Well, yes and no!
Car insurance does cover theft, but you need to have the right insurance policy. There are several types of auto theft insurance policies, and unless you have the right one, you won’t be able to make a claim.
Does Car Insurance Cover Theft?
When it comes to auto policies and car theft insurance, you need to have a comprehensive auto policy. Besides having the policy, you need to prove that it was actually stolen, and you had nothing to do with it. That would be straight-up fraud.
What You Need to Know About Comprehensive Insurance
Comprehensive insurance is the only coverage that will reimburse you in case of theft. This is NOT full coverage though, and it covers anything caused by non-collision events, such as:
- Natural disasters
- Collision with animals
- Falling objects
- Fires or explosions
Unlike collision and liability insurance, comprehensive insurance is not a legal requirement. This is an optional add-on, and you can pay for it separately. However, if you have a loan on the car, the lender requires that you have one. Even if you outright own the vehicle, comprehensive insurance coverage can protect you in so many ways.
What Kind of Theft Does It Cover?
Does car insurance cover theft? Yes, but what kind? A comprehensive insurance policy covers a stolen vehicle or stolen car parts. For instance, if the tires, locks, and hubcaps were stolen, you would get compensation. If the windows were broken and the vehicle vandalized, then the policy would cover that as well.
How Much Will the Policy Cover?
Essentially, a comprehensive insurance policy covers the Actual Cash Value or ACV of the vehicle minus any deductible. The auto theft insurance adjuster will consider the vehicle’s age, accident history, make, model, Blue Book value, and any other information they deem necessary to come up with a valuation.
You must understand that the insurance policy will not cover some of the things you may expect. The adjuster will not take your wheels, GPS, seats, or MP3 player into account. Of course, it’s possible to claim these things as well, but on a different policy is known as homeowner’s or renter’s insurance.
If you have a Rental Car Reimbursement coverage as an add-on, the policy will pay for fees required to rent a car. The policy usually offers a daily limit and an overall limit. This means they cover all rental costs so long as you do not exceed the daily or total limit. For instance, they may offer you a $30-per-day and $800-per-claim limit.
Can You Dispute the Offer?
If you feel that the adjuster did an unfair valuation and believe you should get more, you may counter the offer. You need to have a solid reason for doing that, though. If maybe you upgraded your car and you have proof of receipts or photos, you may be able to convince them to include the improvements in the offer.
What Will Happen In the Instance Your Car is Recovered?
A very small percentage of stolen cars are recovered after theft. If your vehicle falls into this category, it may have sustained damages, or some of the parts could be missing. There is a state-mandated loss threshold your auto theft insurance policy should follow to determine whether the damages are worth repairing or deem the car a loss.
If you have comprehensive coverage and they decide to do the repairs, it will cover all the costs. Of course, you need to keep in mind that they will subtract any deductible you owe from the costs. If they decide it’s a total loss, they will pay you the ACV.
In the case that you have already received the payout when the car is recovered, the insurance company will possibly take the car as it’s property. However, they may also ask you to return the claim amount.
Will the Insurance Policy Cover Personal Items in The Stolen Car?
No, even if you had expensive laptops, smartphones, and other gadgets, car insurance policies don’t cover personal items in a stolen car. However, if you have personal property insurance coverage in your homeowner’s or renter’s policy, you can make a claim. This insurance policy covers personal items even when they are not in the house during the theft.
You should consult your insurance provider about this as you may have off-premises coverage. This means that your limits for personal property away from home may be lower than they would be inside your premises.
What’s the First Thing You Do When You Realize Your Car Has Been Stolen?
First things first, ensure the car is actually stolen. Are you sure that’s where you last parked? Did you come home drunk last night and have no idea where you last saw your car?
Are you considering the repo man? Rack your brain for other possible case scenarios before you decide it’s definitely missing. If you are sure, then call the police and file a report.
Check your car’s location using your GPS or any tracking device you have installed. Most cars nowadays are loaded with technology that makes it possible to track them easily. After filing a claim with the police, your next call should be to your insurer and lender.
Do not wait long before notifying your insurer as it may look suspicious. Insurance fraud is unfortunately very common, about $80 billion every year in the US, and the last thing you need is being a suspect. Even if you don’t have comprehensive insurance, it’s still essential to call and cover liability in case the thief causes injuries and damages to others.
Your insurance company is likely to wait a maximum of 30 days before they declare the come is gone for good. After this, they will pay you what you deserve. Keep on making policy payments to avoid other problems in the future.
So, does car insurance cover theft? Only if you have the right policy. Check out our website for more comprehensive information about insurance policies so you can prepare yourself accordingly. You may also contact us if you have any questions whatsoever.