What Part of Car Insurance Covers Theft?

Car insurance protects vehicle owners from financial burdens caused by unforeseen events. It helps manage risks associated with vehicle ownership, such as damage from accidents, natural occurrences, and theft. Understanding your auto insurance policy’s components helps prepare for various scenarios, including vehicle theft.

Comprehensive Coverage

Comprehensive coverage is a specific part of an auto insurance policy designed to protect against vehicle damage not caused by a collision. This coverage extends to incidents like fire, natural disasters such as floods or hail, falling objects, and impacts with animals. Importantly, comprehensive coverage also includes protection against vehicle theft.

It covers non-collision events beyond a policyholder’s control. If a vehicle is stolen, it helps pay for replacement or repairs if recovered. While optional, it is often required for financed or leased vehicles.

Covered Items and Scenarios

Comprehensive insurance covers the vehicle itself, including permanently installed parts like factory audio systems and navigation units. It also covers damage from attempted theft, such as broken windows or damaged door locks.

If a stolen vehicle is recovered, comprehensive coverage pays for damage incurred while missing. Coverage for aftermarket parts or modifications, like custom rims or sound systems, depends on policy terms. Standard policies often cover only original factory parts, requiring additional custom parts and equipment (CPE) coverage for modifications.

Common Exclusions

While comprehensive coverage protects against theft, it excludes personal belongings inside the vehicle, such as laptops or purses. These items are typically covered by homeowner’s or renter’s insurance, even when outside the home.

Claim denials can occur due to certain circumstances. For example, theft by a household member may be excluded. Gross negligence, like leaving keys in an unsecured running car, can also lead to denial. Review your policy for specific exclusions and limitations.

Steps After Vehicle Theft

Immediately after discovering a vehicle has been stolen, contact law enforcement and file a police report. This report is a mandatory requirement for initiating an insurance claim and provides a legal record of the incident. Provide detailed information about the vehicle, including its make, model, color, and Vehicle Identification Number (VIN), along with the circumstances of the theft.

Following the police report, the policyholder must promptly notify their insurance company about the theft. Insurers typically require notification within a specified timeframe, as delays could impact the claim process. During this notification, policyholders should be prepared to provide their policy number, the police report number, and details about the stolen vehicle.

The insurance company will investigate, and an adjuster may request documentation like proof of ownership or maintenance records. A deductible applies to the comprehensive claim. If the vehicle is not recovered, the insurer pays its actual cash value, minus the deductible. If recovered after a claim payout, the insurer usually takes ownership, and any damage is covered under the comprehensive policy, subject to the deductible.