Does Insurance Cover Auto Theft?

Discovering that your car has been stolen is a distressing ordeal. However, if you have Comprehensive coverage as part of your vehicle insurance, you might consider yourself fortunate, as this type of coverage includes stolen cars, along with damages caused by fire, theft, vandalism, and natural disasters. Securing a good car insurance policy that includes Collision and Comprehensive coverage, along with sufficient liability coverage to safeguard your assets against potential liability claims resulting from accidents caused by you, can provide a sense of reassurance while driving. Moreover, it proves invaluable in situations like theft of your car.

If the vehicle is found and repairable, Comprehensive coverage pays for repair costs. If you have Rental Reimbursement Coverage you can probably have a rental car while yours is being repaired or up to a month in most cases.

If a car isn’t found within a few weeks, most insurers assume that it will never be recovered and typically pay the actual cash value of the vehicle, which takes depreciation into account. If it turns up at a later stage, then it is considered to be the property of the carrier as they fully paid for it.

Comprehensive car insurance coverage comes with a deductible of around $300 – $500 and you can increase it if you can save money by doing so. Deductibles are the sums you need to pay before the coverage kicks in to pay the rest.

Then, there is the vandalism to your automobile that is also covered by comprehensive coverage. Sometimes it may be difficult to determine if the damage is caused because someone was trying to steal something from inside or being stupid, destructive or drunk. In any case, you are protected if you have comprehensive coverage.

Sometimes, they are more interested in what is inside than the vehicle itself and thieves break in to get them. Car insurance doesn’t cover stolen items from automobiles but personal items are typically covered by home or renters’ policies. In other words, you may have to make an automobile insurance claim for the damages to the car like broken windows and a home insurance claim for the lost personal items like laptops.

Furthermore, if an equipment isn’t an original part of an automobile like an expensive entertainment set installed later, insurers may not pay for its theft unless you have told them about such improvements and additions in advance, paid the additional premium and have them included in your policy. However, some companies may pay for improvements up to $1,000, even if they didn’t know about them.

Comprehensive coverage is optional for people who own their vehicles unencumbered. But people who leased or bought a car with a loan may need to have it as lenders and lessors usually require the vehicle to be insured fully. Comprehensive coverage is usually sold together with liability and collision coverage.

Every 45 seconds someone’s car is stolen, according to the Insurance Information Institute. The FBI reports that there are over 800,000 thefts of motor vehicles, which cost nearly $5 billion across the country every year. You may think that police will retrieve it quickly but only 50% of stolen cars are reunited with their owners, according to NHTSA. A few of those recovered vehicles are smashed beyond repair anyway and most require substantial repairs.

According to NHTSA, over 40% of auto thefts and break ins were the result of driver mistakes, like leaving the key in the ignition, not locking it properly and leaving valuables visibly inside.

To  protect your vehicle from thieves or opportunist joy riders, don’t ever leave the key in the ignition no matter for how short period and where it is parked. Also, make sure all the windows and doors are locked. Park it in the garage or driveway if you have one. Otherwise, look for a well-lit spot. Always, take personal items like wallets, handbags, laptops and cell phones with you when you are leaving.

What to Do After an Auto Theft?

You buy an automobile insurance policy in the event that all your attempts to safeguard it fails and you need to make a claim. Here is how to go about it.

  1. The first thing you need to do is to file a police report. Most companies start their process with this report. Also, notifying the police of a stolen vehicle protects you if the thief causes damage to others with your car or racks up parking, speeding or other tickets.
  2. You should report the incident to the insurer immediately. You probably need to complete a claim form.
  3. Contact the lender if you have a vehicle loan and let them know of the claim details so that they can contact the agent if they need to.

Losing a car can cause sudden inconvenience. If you have full coverage, it will at least take away the financial worries. Normally, most vehicle insurers settle a theft claim pretty quickly as after a while it becomes obvious that it may never be found. Most would look into paying you after a month of no news. So, prepare yourself accordingly.