Does Insurance Pay You If Your Car Is Stolen?

Discovering your car has been stolen can be an unsettling experience. Car insurance can provide financial protection in such an event, depending on the specific type of coverage you have included in your policy.

Car Insurance Coverage for Theft

For car theft, “Comprehensive Coverage,” also known as “Other Than Collision” coverage, offers protection. This auto insurance covers damages to your vehicle not caused by a collision. It includes incidents like vandalism, fire, natural disasters (floods, hail, wind), and damage from hitting an animal.

Comprehensive coverage differs from liability or collision insurance. Liability coverage covers damages or injuries you cause to others in an accident. Collision coverage handles damage to your own vehicle from an accident, regardless of fault. Neither liability nor collision coverage compensates for a stolen car. Therefore, comprehensive coverage is necessary for financial losses from car theft.

Immediate Steps After Car Theft

When your car is stolen, immediate action is important for recovery and your insurance claim. First, contact the police department where the theft occurred to file a stolen vehicle report. Provide detailed information: make, model, color, license plate number, Vehicle Identification Number (VIN), and the last time and location you saw it. Obtain a police report number, as your insurance company will require it to process your claim.

Next, notify your insurance company as soon as possible. Many insurers have specific timeframes for reporting theft, and delays could impact your claim. Provide your policy number, vehicle details, and the police report number to your insurer. If your vehicle has a GPS tracking device or telematics system, inform law enforcement and your insurance company immediately, as this can aid in locating the car.

The Insurance Claim and Payout Process

After reporting the theft to both the police and your insurance provider, the insurance company will begin its investigation. Insurers implement a waiting period, often 7 to 30 days, before finalizing a payout, in case the vehicle is recovered. During this period, the insurer will verify theft details and may conduct interviews. Your cooperation in providing requested documentation helps expedite this process.

If your vehicle is not recovered within the waiting period, or if it is found but deemed a total loss due to damages, your insurer will offer a settlement. The payout is based on the car’s Actual Cash Value (ACV) at the time of theft. ACV accounts for the car’s original value minus depreciation due to age, mileage, and overall condition. From this ACV, your comprehensive coverage deductible will be subtracted. For example, if your car’s ACV is $10,000 and your deductible is $500, your payout would be $9,500. If a payout is made and the car is not recovered, the vehicle’s title will be transferred to the insurer.

What Is Not Covered

While comprehensive coverage offers protection against car theft, it has specific limitations. Personal belongings stolen from inside the vehicle are generally not covered by auto insurance. Items such as laptops, phones, or wallets are typically excluded from car insurance policies. These personal items may, however, be covered under a homeowners, renters, or condo insurance policy, subject to that policy’s deductible and coverage limits.

Comprehensive coverage typically does not cover losses due to negligence, such as leaving your keys in the ignition with the car running, though some policies may still offer coverage. Additionally, the cost of a rental car or other temporary transportation expenses while your vehicle is stolen or being repaired is usually not covered unless you have added rental reimbursement coverage as an endorsement to your policy. Aftermarket equipment not permanently installed in the vehicle may also not be covered unless specifically declared and added to your policy.