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Does auto insurance cover car theft?

Fact-checked with HomeInsurance.com

It’s a worst-case scenario for any driver—searching high and low for your car that’s nowhere to be found. Having your car stolen is extremely distressing and inconvenient, especially if you use your car on a daily basis. The good news is that auto insurance does cover theft, depending on what type of coverage you have. In this article, we’ll explain what type of insurance covers theft and what to do if your car is stolen.

What coverage is needed to cover car theft?

Not all types of car insurance cover theft. Only comprehensive insurance will pay to replace your vehicle if it’s stolen. Comprehensive car insurance covers damage from incidents that are not related to an accident. For example, if a tree fell on your car after a hurricane, or if your car was severely damaged in a wildfire, comprehensive insurance would pay for the repairs. 

Despite the name, comprehensive coverage isn’t entirely “comprehensive.” It doesn’t pay for damages due to an accident, nor does it cover your liabilities as a driver. That’s what collision and personal liability insurance are for. This coverage is strictly for non-collision losses.

Who needs comprehensive insurance?

Comprehensive insurance is an optional coverage, meaning it’s not automatically included with all car insurance policies. If you choose to purchase comprehensive coverage, it will be an added cost or increase on your premium.

However, some drivers are required to carry comprehensive insurance. If you have a car loan or lease, your lender probably requires you to have full coverage insurance, which includes comprehensive coverage. Even then, most drivers can benefit from having it. Without comprehensive insurance, non-collision car damage wouldn’t be covered, and the cost of those repairs would come out of your pocket.

The only time a driver doesn’t need comprehensive insurance is when the value of their vehicle is less than the cost of their deductible. This is more common with very old vehicles, especially ones that are in poor condition or that have high mileage. In the event of a covered loss, it ends up being cheaper to purchase a new car than to get the current one fixed.

How much does comprehensive insurance cost?

Comprehensive insurance is relatively affordable. According to the Insurance Information Institute (III), the average cost of comprehensive insurance is about $134 per year. However, the actual amount you’ll pay depends on a number of factors, including:

  • Where you live
  • Your age
  • Your claims history
  • Your driving record
  • Your credit score
  • The current market value of your car
  • The make and model of your car
  • The age of your car
  • Other coverages you have on your policy

What to do when your car is stolen

Finding out that your car has been stolen is alarming and scary, to say the least. In the moment, it’s easy to get caught up with worry and fear, but the sooner you act, the better. Here’s what to do if your car has been stolen.

Call the police

As soon as you realize the car has been stolen, call the police. You’ll need to file a police report and provide information about your vehicle, including the VIN number, make and model, year, color and any distinguishing features, like dents, scratches or bumper stickers. You will also need to provide details about where you had the car parked and what time you realized the car was missing. The police will add your vehicle to a database of stolen cars and keep an eye out for it.

Contact your insurance company

After you file the police report, the next step is to contact your insurance company and let them know that your car was stolen. You’ll need to file a claim with similar information to what you gave the police. Even if you don’t have comprehensive insurance, you should still notify your insurance company about the theft. If the person who stole your car goes on a joyride and gets into an accident, the insurance company will need to know about it. 

Wait for your payout (if you’re covered)

If you have comprehensive insurance, your insurance company will review your claim, determine your payout and write you a check for the car’s replacement cost, minus your deductible. You can use that money to purchase any new vehicle. Just make sure to add the new car to your insurance policy as soon as you get it, as your rates can be affected by the make and model, among other factors. 

Does car insurance cover the contents of a stolen car?

There is no type of car insurance that will cover personal items inside a stolen car. However, if you have homeowners insurance or renters insurance, your personal property may be covered by those policies. Home and renters insurance both include personal property coverage, which covers the items inside and outside your home. Typically, items inside your car qualify for coverage under home or renters insurance.

However, coverage for off-premise items has a certain limit, and it’s usually lower than the limit for items inside your home. For example, if you had a computer worth $1,000 inside your car when it was stolen, you probably wouldn’t be reimbursed for the full value. Off-premise coverage also has low limits for things like jewelry, personal electronics and other valuables.

What to do if the car is recovered

After you file an insurance claim, there’s always the possibility that your stolen car could be found. If that happens, the insurance company will handle it in one of two ways.

If the car is recovered during the claim process, the insurance company will assess the vehicle for damage and reimburse you for the cost of any repairs, minus your deductible. If the car is totaled, the insurance company will write you a check for the car’s replacement cost so you can purchase a new one.

If your car is recovered after the claim has been processed, it’s more complicated. If you’ve already been paid out by the insurance company, they technically own the vehicle. You might be able to buy back the car if you haven’t spent the money on a new one. However, this type of situation is typically handled on a case-by-case basis.

The takeaway

  • Comprehensive insurance is the only type of insurance that covers the theft of your vehicle.
  • Home and renters insurance covers personal property inside a stolen vehicle.
  • Comprehensive insurance is optional in most cases, but there are many benefits to having it.

Conclusion

Having your car stolen is one of the worst things you can experience. But if you have comprehensive car insurance, you don’t have to worry about paying for a new vehicle out-of-pocket. You’ll pay your deductible and receive a check for your car’s replacement cost value. Remember that car insurance typically won’t cover your personal belongings inside the stolen car—you’ll need to file a homeowners or renters insurance claim for that.

Elizabeth Rivelli

Elizabeth is an insurance writer for coverage.com, where she covers insurance providers and reviews policies to help consumers find comprehensive and affordable coverage for every area of their life. She has more than three years of writing experience for top online insurance and finance publications.

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