Does Full Coverage Cover a Stolen Car?

When discussing car insurance, “full coverage” is a widely used term that doesn’t refer to a single, specific policy. Instead, it describes a bundle of different coverages, often including liability, collision, and comprehensive insurance. Understanding what this bundle entails, especially concerning vehicle theft, is important for policyholders. This article clarifies how “full coverage” addresses a stolen car and other related financial considerations.

The Role of Comprehensive Coverage

Protection against vehicle theft within a “full coverage” policy comes specifically from comprehensive coverage. This insurance covers damage to your vehicle from events other than collisions, such as theft, vandalism, fire, natural disasters like floods or hail, and striking an animal.

If your car is stolen, comprehensive coverage can help pay to replace the vehicle up to its actual cash value, minus your deductible. It also covers damage to your car resulting from a theft or attempted theft, such as a broken window or damaged ignition system. Policyholders should review their specific policy documents to confirm they have comprehensive coverage for theft protection.

What “Full Coverage” Typically Excludes

While “full coverage” provides substantial protection, it does not cover every scenario. Personal belongings stolen from inside your car are generally not covered by auto insurance. Comprehensive auto insurance covers the vehicle and its permanently installed parts, but personal items like laptops, phones, or luggage typically fall under a homeowners or renters insurance policy.

“Full coverage” also does not extend to mechanical breakdowns, routine maintenance, or wear and tear. Intentional acts of damage or using your car for business purposes without appropriate commercial coverage are common exclusions that can lead to a denial of claims.

Steps After a Car Theft

If your car is stolen, take immediate actions to facilitate a potential insurance claim. First, report the theft to the police without delay. Provide detailed information about your vehicle, including its make, model, year, Vehicle Identification Number (VIN), license plate number, and the last known location and time it was seen. Obtaining a police report number is important, as your insurance company will require it to process your claim.

After filing a police report, promptly contact your insurance company to report the theft. Provide your policy number and the police report details. Also, notify any lienholder or leasing company if you have a loan or lease on the vehicle. Insurance companies typically initiate an investigation, and there may be a waiting period, often around 30 days, before a claim is processed to allow time for the vehicle to be recovered.

Understanding Your Claim Payout

Once your car theft claim is approved, understanding how the payout is determined is important. Your comprehensive coverage will pay out the vehicle’s Actual Cash Value (ACV). This is the cost to replace your car minus depreciation for age, mileage, and condition at the time of the theft. The payout reflects the car’s market value just before it was stolen, not what you paid for it or what a new equivalent would cost.

From this ACV amount, your deductible will be subtracted. The deductible is the out-of-pocket amount you agreed to pay before your insurance coverage begins. If your stolen vehicle is eventually recovered, the insurance company will assess its condition. If it’s damaged, repair costs might be covered, minus your deductible. If the car is never found, or is recovered but declared a total loss, the insurance payout, after the deductible, will go first to any lienholder to satisfy an outstanding loan, with any remaining funds paid to you.