Does Insurance Cover Theft of a Vehicle?

Types of Coverage for Vehicle Theft

Comprehensive coverage is the specific type of auto insurance designed to address vehicle theft. This coverage extends beyond typical collisions, offering protection against various non-collision events that can damage or result in the loss of a vehicle. It typically covers perils such as fire, vandalism, falling objects, natural disasters like hail or floods, and animal impacts.

Unlike collision or liability coverage, comprehensive insurance is often optional. Collision coverage primarily pays for damage to your vehicle from an accident with another vehicle or object, while liability coverage addresses damages or injuries you might cause to others.

Scope of Theft Coverage

Comprehensive auto insurance policies typically cover the theft of the vehicle itself, including its permanently attached parts and standard equipment. If your car is stolen, the policy is designed to help replace the vehicle or compensate you for its loss.

However, comprehensive policies generally have specific exclusions regarding personal belongings left inside the stolen vehicle. Items such as laptops, briefcases, cell phones, or tools are usually not covered under an auto insurance policy; coverage for these items typically falls under a homeowner’s or renter’s insurance policy. Additionally, aftermarket modifications, like custom wheels or specialized sound systems, may not be fully covered unless specifically declared to the insurer and added to the policy.

When a vehicle is stolen and not recovered, the insurer typically assesses its value based on its Actual Cash Value (ACV). ACV represents the vehicle’s market value just before the theft, considering depreciation due to age, wear, and tear. This valuation determines the payout amount, not the original purchase price or replacement cost.

Immediate Steps After Vehicle Theft

Upon discovering your vehicle has been stolen, report the theft to the local law enforcement agency. Provide a detailed description of the vehicle, its last known location, and any identifying features for the police report. It is crucial to obtain a copy of the police report and a case number, as this documentation will be required by your insurance company.

Following the police report, promptly notify your insurance provider about the theft. Having your policy number and the police report details readily available will streamline this initial communication. Insurers typically require notification within 24 to 72 hours of discovery.

Gathering all relevant information about your vehicle, such as the Vehicle Identification Number (VIN), license plate number, make, model, and year, will assist both law enforcement and your insurer. If your vehicle is equipped with a tracking device, activating it or providing its information to the authorities can aid in recovery efforts.

Navigating the Insurance Claim

After reporting the theft and notifying your insurer, the formal claim process begins. You will typically complete specific claim forms provided by your insurance company, detailing the circumstances of the theft and providing all requested vehicle information. This paperwork is a necessary step to formally initiate the claim investigation.

Your insurer will then commence an investigation, which may include a waiting period before the vehicle is declared a total loss if it remains unrecovered. This waiting period often ranges from 15 to 30 days, allowing time for law enforcement to attempt recovery. During this period, the insurer also verifies the claim details and investigates for any potential fraud.

If the vehicle is not recovered within the waiting period, the insurer will determine the payout value, typically based on the Actual Cash Value. The settlement amount will factor in your policy’s deductible, which is subtracted from the determined ACV. Once the payout is issued, ownership of the stolen vehicle typically transfers to the insurance company. Should the vehicle be recovered after you have received a settlement, the insurer will then own the recovered vehicle.