Does Liability Insurance Cover a Stolen Car?
Unravel car insurance complexities when your vehicle is stolen. Discover which coverage protects you and essential steps to take if your car is gone.
Car insurance protects vehicle owners from financial burdens. Understanding specific coverages is important, especially regarding vehicle theft. This article clarifies the scope of liability coverage, details the type of insurance that addresses vehicle theft, and outlines steps to take if your car is stolen.
What Liability Insurance Covers
Liability insurance is a mandatory component of auto insurance in most states, designed to cover damages and injuries you cause to other people and their property in an accident where you are at fault. It does not provide coverage for damages to your own vehicle or for your own injuries. This type of coverage helps protect your financial assets if you are found legally responsible for an incident.
Two primary components make up liability insurance: Bodily Injury Liability and Property Damage Liability. Bodily Injury Liability helps pay for medical expenses, lost wages, and pain and suffering for others injured in an accident you cause. It can also cover legal fees if you are sued by the injured parties.
Property Damage Liability covers the cost of repairing or replacing property belonging to others that you damage in an accident. This includes damage to another person’s vehicle, as well as structures like fences, buildings, or road signs. Similar to bodily injury coverage, it can also help with legal defense costs if a lawsuit arises from the property damage.
It is important to understand that liability insurance specifically addresses your financial responsibility to others, not to your own vehicle or personal well-being. Therefore, if your car is stolen, liability insurance will not cover the loss of your vehicle.
How Car Theft is Covered
While liability insurance does not cover a stolen car, comprehensive coverage is the specific type of auto insurance designed to protect your vehicle from non-collision incidents. This optional coverage extends to a range of events beyond your control, including theft, vandalism, fire, and natural disasters such as floods or hail. It serves as a financial safeguard for damages or losses to your own vehicle that are not the result of an accident with another car or object.
If your car is stolen and not recovered, comprehensive coverage typically pays out the vehicle’s Actual Cash Value (ACV) at the time of the theft. The ACV represents the car’s market value, factoring in depreciation due to age, mileage, and condition, rather than its original purchase price. An insurer determines this value by assessing comparable vehicles in the market, ensuring the payout reflects the car’s worth just before the loss.
When filing a comprehensive claim for theft, a deductible will apply, which is the amount you are responsible for paying out-of-pocket before your insurance coverage begins. Comprehensive coverage also extends to damages sustained if a stolen vehicle is recovered, such as broken windows or ignition systems.
What to Do if Your Car is Stolen
Discovering your car has been stolen can be a distressing experience, and taking immediate, structured steps is important. The first crucial action is to report the theft to your local police department. You will need to provide specific details about your vehicle, including its make, model, color, license plate number, and Vehicle Identification Number (VIN), along with the approximate time and location it was last seen. Obtaining a police report number is also necessary, as your insurance company will require it to process a claim.
After filing a police report, contact your insurance provider promptly to notify them of the theft. Even if you only carry liability insurance, informing your insurer is still important, as it helps protect you from potential liability if the stolen vehicle is involved in further incidents. If you have comprehensive coverage, this call initiates the claims process for the theft. Be prepared to provide your policy number and the police report number to your insurer.
Gathering relevant documentation, such as your vehicle’s title, registration, and any details about recent maintenance or modifications, can assist in the claims process. This information helps your insurer accurately determine the car’s Actual Cash Value if it is not recovered. If the car is found, you will need to notify both the police and your insurance company immediately to coordinate its return and assess any damages.