Is Auto Theft Covered by Insurance? What to Know
Unsure if your car insurance covers theft? Discover how policies protect you, what steps to take, and how to manage the claim process effectively.
Discovering your vehicle has been stolen can be a difficult experience. Understanding how insurance coverage applies to auto theft is important for navigating the aftermath.
Comprehensive Coverage and Theft Protection
Comprehensive insurance coverage is generally the type of protection that applies to auto theft. This coverage extends to loss or damage to your vehicle from events other than collisions, including theft.
When a vehicle is stolen, comprehensive coverage covers the actual cash value (ACV) of the vehicle, up to the policy limits, after a deductible. The actual cash value reflects the market value of the vehicle at the time of the theft, accounting for depreciation. Personal belongings or items inside the vehicle, such as electronics or clothing, are generally not covered by an auto insurance policy. However, these items may fall under the protection of a homeowner’s or renter’s insurance policy.
Immediate Actions After Auto Theft
After discovering your vehicle has been stolen, prompt action is important to aid recovery and facilitate any insurance claim. The initial steps involve reporting the theft to law enforcement and notifying your insurance provider. These actions create a formal record of the incident, which is necessary for the claims process.
First, contact local law enforcement to file a police report. You should be prepared to provide specific details about your vehicle, including its make, model, year, color, Vehicle Identification Number (VIN), and license plate number. Providing information about the last known location and any distinguishing features can also be helpful. It is important to obtain a copy of the police report or the report number, as this document is essential for your insurance claim.
Next, notify your insurance company as soon as possible after filing the police report. This initial notification informs them of the theft and begins the process. You will need to provide your policy number, the date and time of the theft, and the police report number during this call. Some insurers may have a specific timeframe within which a theft must be reported.
If your vehicle is equipped with a tracking service or GPS locator, notify the service provider promptly. This can assist law enforcement in locating the vehicle.
Navigating the Insurance Claim
Once the initial reports are filed, the formal process of navigating your insurance claim begins. This stage involves providing more detailed documentation and cooperating with your insurer’s investigation.
To submit your claim, your insurer may provide an online portal, a phone number, or require mailed documentation. You will need to provide additional documents. These commonly include the vehicle’s title, proof of ownership, a complete set of keys, and any relevant loan or lease information.
The insurance company will conduct its investigation into the theft. This investigation may involve contacting the police, checking for vehicle recovery, and verifying the details you provided. Maintain open communication with the assigned claims adjuster and promptly respond to any requests for further information or documentation.
Many insurers have a waiting period, typically a few days to 30 days, before processing a total loss claim for a stolen vehicle. This period allows time for the vehicle to be recovered by law enforcement. If the vehicle is recovered during this time, the claim may shift to cover any damage incurred during the theft rather than a total loss payout.
Determining Your Claim Payout
The final payout for a stolen vehicle covered by insurance is influenced by several factors outlined in your policy.
A deductible, a predetermined out-of-pocket amount, will be subtracted from the total payout. For example, if your comprehensive coverage has a $500 deductible, that amount will be deducted from the calculated value of your stolen vehicle.
Most auto theft claims are settled based on the vehicle’s actual cash value (ACV). The ACV represents the market value of the vehicle at the time of the theft, accounting for depreciation due to age, mileage, and condition. This differs from replacement cost value, which covers the cost of a new comparable vehicle. While rare for auto insurance, some policies offer replacement cost coverage.
The payout will not exceed the policy limits for your comprehensive coverage. If the stolen vehicle was financed or leased, the payout goes directly to the lender or leasing company first. If the payout is less than the outstanding loan or lease balance, the policyholder remains responsible for the difference.