Does Car Insurance Cover Theft?

Car theft is an unfortunate reality for many drivers, and it raises an important question: Does car insurance cover theft? The answer depends on the type of car insurance policy you have in place. In this guide, we'll break down which auto policies cover theft, how filing a claim works, and steps you can take to help protect both your vehicle and your peace of mind.

Understanding Car Insurance

Depending on the coverage you select, car insurance can help protect against financial losses arising from accidents or other covered events. Most car owners have auto liability insurance, which is typically required by law in most states, to help cover liability in the event of an accident.

But does car insurance cover theft?

Does Car Insurance Cover Theft? Common Types of Car Insurance Coverages Explained

Car insurance policies generally consist of different forms of coverage, each intended to address distinct categories of risk or loss. Common types of car insurance include:

1. Auto Liability Coverage: Generally required by most states, this type of insurance covers claims alleging third party injury or property damage arising from an accident where the policyholder was at fault.  

Auto liability insurance doesn't cover theft.

2. Collision Coverage: This type of insurance covers claims arising from damage to your car resulting from a collision with another vehicle or object, such as a guardrail, tree, or building, regardless of fault. Auto collision insurance is not required by law in any state, but lenders often require collision (and comprehensive) coverage if you are leasing or financing your vehicle.

Collision insurance doesn't cover theft.

3. Comprehensive Coverage: This type of insurance covers non-collision-related damages or losses, such as theft, vandalism, natural disasters, and other incidents such as contact with an animal.  Many lenders require comprehensive coverage, in addition to liability coverage, if financing or leasing a car.

Comprehensive insurance is a type of coverage you should consider if you're concerned about coverage for claims arising from theft.

Comprehensive Coverage: The Type of Car Insurance That Covers Theft

While the terms and conditions of a given policy may vary, comprehensive auto insurance typically includes coverage for car theft, among other non-collision-related losses. If your car suffers a covered loss, such as theft, a standard comprehensive auto insurance policy will typically reimburse you for the vehicle’s actual cash value (its market value at the time of loss, accounting for depreciation), up to your coverage limit, minus any applicable deductible.  While less common, some auto insurance policies offer replacement cost coverage for an additional cost.

It's important to understand the specifics of your policy to know exactly how your coverage will apply.

Does Car Insurance Cover Theft of Personal Belongings?

No, car insurance generally does not cover personal belongings stolen from your vehicle.

Personal belongings stolen from your car may be covered under a homeowners or renters insurance policy, rather than by auto insurance. Review your policy for specifics, especially for high-value items like jewelry or electronics.

Filing a Car Insurance Claim After Theft

Should your vehicle get stolen, it's essential to act quickly when filing a car insurance claim. File a police report, as this will be a key document for your car insurance claim. Contact your car insurance company and provide the police report to support your claim. Submit any other requested documentation alongside a completed claim form, detailing the event. Always be sure to follow your insurance company's specific directions for filing a claim, as procedures may vary by provider.

Taking swift action can help expedite the claim process.

You may also need to contact your homeowners or renters insurance company if belongings were stolen from your car. Providing a list of any items stolen can help your insurer streamline the processing of your homeowners or renters insurance claim.  Again, always be sure to follow your insurance company's specific directions for filing a claim, as procedures may vary by provider.

What Factors Can Affect Car Insurance Coverage for Theft Claims?

Many factors can affect your car insurance coverage. These include, but are not limited to:

Deductibles: This is the amount you pay out of pocket before car insurance kicks in. The higher the deductible, the lower your premium payments typically are, but it also means you'll pay more out of pocket on a covered claim.

Policy Limits: Car insurance policy limits refer to the maximum amount an insurer will pay for covered losses.

Actual Cash Value vs. Replacement Cost Value: Auto insurance policies typically provide coverage based on actual cash value (ACV), which is the vehicle’s current market value minus depreciation. This means your claim payment would reflect the depreciated value of the car, not the cost of a brand-new replacement. Replacement cost coverage, which pays the full cost to replace your vehicle without factoring in depreciation, is less standard but may be available as an option for an additional cost depending on your insurer and coverage form.

Useful Car Theft Prevention Tips to Help Protect Your Vehicle

While comprehensive auto insurance can provide coverage in the event your vehicle is stolen, prevention is always a preferable strategy. Consider these methods to help secure your vehicle:

• Install Anti-theft Devices: Steering wheel locks, ignition kill switches, and alarms can help deter thieves.
• GPS Tracking Systems: These can assist in recovery if the vehicle is stolen.
• Secure Parking: Parking in well-lit areas can help. When possible, also use secured parking spaces or garages.

Conclusion: Is Comprehensive Car Insurance Worth It for Theft Protection?

Considering the financial risks associated with car theft, comprehensive coverage offers a strategic means of mitigating financial loss. While comprehensive coverage is not required by any state, having the right coverage in place to help protect against theft and other non-collision scenarios can be important. Review your policy details with your insurance provider to ensure you have the right coverage for your needs, considering your chosen deductibles and coverage limits.

By understanding the nuances of car insurance and knowing what types of coverage address vehicle theft, you can help safeguard your financial security while mitigating risk.

Acrisure can help you find the right car insurance solutions for the road ahead. Contact us today or request a car insurance quote online now.

FAQ: Car Insurance and Theft

Does car insurance cover theft if I only have liability coverage?

No. Auto liability insurance only covers damages or injuries you cause to others in a covered accident. It does not cover the theft of your car or belongings.

Does car insurance cover theft of items inside my car?

Generally, no. Personal belongings stolen from your car are typically covered under your homeowners or renters insurance, not your auto policy.

Does comprehensive car insurance cover theft of my car?

Yes. Comprehensive coverage typically includes car theft. In most cases, it reimburses you for the actual cash value of your vehicle at the time of the loss (its market value minus depreciation), up to your policy limit and minus any applicable deductible. Some auto insurance policies may instead provide replacement cost coverage for an additional cost, but this is less standard.