If Someone Steals Your Car, Will Insurance Cover It?

Car theft is a distressing experience that raises immediate concerns about insurance coverage. Understanding the specific types of coverage that apply, along with the necessary steps to take, can help navigate this challenging situation. This article clarifies the insurance aspects of car theft, guiding individuals through the process from initial discovery to claim resolution.

Understanding Relevant Coverage

Insurance coverage for car theft primarily falls under comprehensive coverage. This type of auto insurance helps pay to repair or replace a covered vehicle that is stolen or damaged by events other than a collision. Comprehensive coverage extends to a range of non-collision incidents, including vandalism, fire, natural disasters like floods and hail, and damage from hitting an animal.

This coverage is distinct from collision coverage, which addresses damage to your vehicle resulting from an accident with another vehicle or object, and liability coverage, which covers damages you might cause to others. While liability coverage is often a legal requirement, comprehensive coverage is typically optional unless a vehicle is financed or leased, in which case lenders frequently require it. The payout from comprehensive coverage, after a deductible, is generally based on the vehicle’s actual cash value at the time of the theft.

Immediate Actions After Theft

Upon discovering a vehicle has been stolen, the first action is to contact law enforcement. Reporting the theft promptly to the local police department is necessary, as insurers typically require a police report to process a claim. When contacting the police, be prepared to provide crucial details about the vehicle, such as its make, model, color, license plate number, and the Vehicle Identification Number (VIN). The VIN can usually be found on insurance documents or the vehicle’s title.

Inform the police of the last known location and time the vehicle was seen, along with any distinctive features or aftermarket additions. If there were any personal belongings inside the vehicle, provide a list of those items, although auto insurance typically does not cover personal property. Obtaining a copy of the police report, including the crime reference number, is crucial, as this document will be required for the subsequent insurance claim.

Notifying Your Insurer and Filing a Claim

Once the police report has been filed and a crime reference number obtained, the next step involves notifying your insurance provider. Contact your insurer as soon as possible, ideally within 24 hours of discovering the theft, to initiate the claims process. Timely notification helps protect you from potential liability if the stolen vehicle is involved in further incidents while out of your possession.

When contacting the insurance company, be ready to provide your policy number, the police report number, and all vehicle details previously given to law enforcement. Insurers may also inquire about the location of all keys to the vehicle and a detailed account of the theft’s circumstances. The insurance company will then assign a claims adjuster who may verify the police report and conduct their own investigation to confirm the theft. Cooperation with the adjuster by providing any requested additional information or documentation, such as proof of ownership or maintenance records, can help expedite the claim.

Claim Resolution

The resolution of a car theft claim typically depends on whether the vehicle is recovered and its condition. If the stolen vehicle is not recovered, the insurance company will generally pay out its actual cash value (ACV) at the time of the theft, minus your policy’s deductible. Actual cash value accounts for depreciation due to age and wear, meaning the payout reflects the vehicle’s worth just before it was stolen, not necessarily its original purchase price or the cost of a brand-new replacement.

If the vehicle is recovered, the outcome varies based on the timing of the recovery and its condition. If recovered before a claim payout, the insurer will assess any damages and cover the repair costs, less your deductible, to return it to its pre-theft condition. Should the repair costs exceed the vehicle’s actual cash value, the car may be declared a total loss, and the insurer would pay out the ACV. If the car is recovered after the insurance company has already settled the claim and paid out the ACV, the vehicle then becomes the property of the insurance company. In some instances, the insurance company might offer the former owner the option to buy the recovered vehicle back.