Having your car stolen can be an incredibly stressful and unfortunate experience. Not only do you have to deal with the loss of your vehicle, but you also have to navigate the claims process with your car insurance company. One of the most common questions people have in this situation is – does car insurance cover theft?
The short answer is yes, comprehensive car insurance will cover the theft of your vehicle, subject to your policy limits and deductible. However, the details of what is covered and the claims process can vary depending on your specific policy and insurance company. In this blog post, we’ll walk through what type of car insurance you need for theft coverage, what the claims process typically entails, and tips for getting the most value from your claim.
What Type of Car Insurance Covers Theft?
For your car insurance policy to cover theft, you need to have comprehensive coverage. Comprehensive insurance is an optional add-on coverage that covers damage to your vehicle that is not a result of a collision, including:
- Weather events like hail or floods
- Falling objects
- Collisions with animals
Liability insurance, which is mandatory in most states, covers damage that you cause to others – it does NOT cover damage to your own vehicle from theft. Collision coverage handles damage from accidents. But to get coverage for theft specifically, comprehensive is required.
Comprehensive coverage typically comes with a deductible, usually $500-$1,000, which is the amount you pay out-of-pocket before insurance picks up the rest. So if your stereo gets stolen and costs $800 to replace, you’d pay your $500 deductible and insurance would cover the remaining $300.
The cost of comprehensive coverage varies significantly based on factors like your car’s make and model, your location, and your driving history. On average, it adds $150-$300 per year to your premium. For older cars, it may not be worth adding comprehensive. But for newer cars, the peace of mind is usually worth the extra cost.
What Does the Claims Process Look Like for a Stolen Car?
The specific claims process for a stolen vehicle can vary slightly by insurance company, but there are general steps that apply across the board:
Step 1: Report the theft to the police – The first thing you should do is contact the police to file a stolen vehicle report. Most insurance companies will require a case number or copy of the police report to process your claim. Be sure to provide all relevant details and document everything.
Step 2: Notify your insurance company – Call your insurance provider as soon as possible to start your claim. Have information like your policy number, car details, police report, and any other evidence related to the theft ready to share. Your insurance will open a claim and begin an investigation.
Step 3: Insurance investigation – The insurer will investigate your claim by reviewing the police report, visiting the theft location, looking for surveillance footage, interviewing witnesses, and requesting any other evidence from you. This process can take days or even weeks depending on the complexity of the case.
Step 4: Claims approval/denial – Once the investigation is complete, the insurance company will either approve or deny your claim. If approved, they will provide a payment (minus your deductible) based on the Actual Cash Value (ACV) of your vehicle. If denied, you can appeal or provide additional evidence for re-review.
Step 5: Vehicle recovery – If the stolen vehicle is recovered, the claims process will proceed slightly differently. You may get your car back and then your insurance will assess any damage and cover associated repair costs. Or if the car is extensively damaged, it may be considered a total loss.
The most important things are to act quickly after the theft, thoroughly document everything, and stay in close communication with your insurer throughout the process. This will help ensure you get maximum value from your claim.
Tips for Handling Your Claim After Your Car is Stolen
Navigating the claims process after a theft can be frustrating. Here are some tips to help make it smoother:
- Take pictures/video of your car before it’s stolen to document condition, features, and any distinguishing characteristics. This can help substantiate your claim.
- Get a rental car reimbursement. Most insurers will pay for a rental car for you during the claims process up to a set limit, usually $30/day.
- Save all receipts related to the theft, like towing bills or taxi fares getting home. Insurers will usually reimburse reasonable costs.
- Get estimates for replacement items like car seats or golf clubs stolen to submit to your adjuster. This smooths the payment process.
- Call your agent first if you aren’t satisfied with your claims adjuster or settlement offer. They may be able to work more smoothly on your behalf.
- Appeal a claim denial with help from your agent or in writing if you believe it was wrongfully denied. Provide additional evidence and make your best case.
- Review your settlement offer carefully and follow up on any reductions you think are unfair. Politely push for justification of any lowered valuations.
Dealing with insurance can be a headache even under the best circumstances. But following these tips and advocating for yourself can help get you the maximum claim payout you deserve.
Can You Make an Insurance Claim if You Left Your Keys in the Car?
One common question that comes up with theft claims is whether leaving your keys in the unattended car affects your ability to make a successful claim. The answer is, it depends on your policy language and insurance company.
Some insurers may reduce or deny claims if the theft occurred when you left keys in the vehicle or made it otherwise easy for thieves to access it. They may argue that you were negligent and therefore partially liable.
However, in many cases you can still receive a payout even if you made the theft easier, as long as you had comprehensive coverage. The main steps are being upfront about the circumstances, providing police reports, and pushing back on any unfair valuations.
With Progressive Insurance for example, they indicate that leaving your keys in the car would not alone be reason to deny a theft claim. State Farm also says they generally will not deny a claim for keys in car, unless intention to create the loss is evident.
To improve your chances of a smooth claims process, avoid admitting fault or negligence to the insurer. Simply provide all relevant facts and evidence and let them come to their own conclusions objectively.
The main takeaway is that leaving keys in an unattended car does not automatically make your theft claim invalid if you have comprehensive coverage. But it does make getting your full payout more difficult.
How to Prevent Your Parked Car From Being Stolen
While car insurance will cover theft, it’s better to avoid having your car stolen in the first place if possible. Here are some tips to reduce the risk of theft when your car is parked:
- Never leave your keys or valuables visible in the car
- Hide any charging cords so passersby don’t assume a phone is in the car
- Install a car alarm or anti-theft system – loser models work as deterrents
- Park in well-lit areas and avoid isolated, dark parking lots
- Use a steering wheel lock which makes hotwiring difficult
- Invest in a wheel clamp, which makes it hard to tow the car
- Etch your VIN number on car windows to deter professional thieves
- Park strategically by backing into spaces or parking between two larger vehicles
- When parking overnight, use your garage or park on a driveway versus the street
Taking simple precautions like never leaving keys in the car, parking strategically, and having visible anti-theft devices can go a long way in keeping your car safe. Avoid making your vehicle an easy target and you dramatically decrease the odds of it being stolen.
Can You Insure a Car That’s Already Been Stolen?
If you’re considering buying a used car that’s been stolen and recovered in the past, you may be wondering if you’ll be able to get insurance. The answer is usually yes, you can insure a previously stolen vehicle. But there are some caveats.
Insurance companies will be wary of a car with a theft history when underwriting a policy. It will be classified as high risk. You may encounter issues like:
- Higher premiums – potentially 1.5X the normal rate
- Mandatory comprehensive coverage
- Higher deductible requirements
- Usage-based restrictions preventing regular street parking
- Requirement to have anti-theft devices installed
The increased risk also means some insurers may shy away from writing a policy. But there are specialty insurers that focus on high-risk vehicles. With some persistence, you should be able to find coverage.
The best way to get affordable rates is to be proactive about prevention. Install anti-theft tech, keep it garaged, consider using a tracking service, and highlight precautions you’re taking to make the car less appealing to thieves. Also keep your driving record clean.
While more difficult, a stolen and recovered car can still be insured in most cases. Just take extra steps to mitigate the added risk.
Is it Worth it to File an Insurance Claim for a Stolen Car?
If your car is stolen, one question you might face is whether it’s even worthwhile to file an insurance claim at all. There are a few factors to consider when making this decision:
Value of the car – If your car is older or not very valuable, the payout from your insurer after deducting your copay may be relatively small. In that case it may not be worth the time and effort to pursue a claim. But for newer cars, it’s usually worth filing.
Out-of-pocket costs – What deductible, rental car costs, and other expenses will come out of pocket if you file? If those costs exceed the likely payout, no claim makes sense.
Premium increase – After a theft claim, your rates will likely go up at renewal. If the rate hike exceeds the claim payout, it may be smarter to forego the claim and avoid the premium bump.
Claims history – The more claims you file, the higher your premiums get. Avoid too many claims in a short timeframe as your insurer may see you as high-risk.
Chance of recovery – If there is a good chance your car may still be found, it can be worth waiting on starting a claim just yet in case it’s recovered undamaged.
You have to look at the unique circumstances of your situation. But in many cases, filing an insurance claim for a stolen car is worthwhile and provides important financial protection. Just weigh the expected costs vs. benefits first.
Common Exclusions in Comprehensive Coverage
While comprehensive coverage is quite broad, most policies do contain some exclusions where theft or damage will not be covered. Here are some common car insurance exclusions to be aware of:
- Inside the car – Personal items stolen from inside the car like cash, phones, clothing, or bags are not covered. Only the vehicle itself is protected.
- Unsecured cargo – If gear in your car bed or cargo area is stolen because it wasn’t properly locked down, it may not be covered.
- Mechanical parts – Consumable parts like batteries or tires are generally excluded from comprehensive claims.
- Unapproved drivers – Some policies won’t cover theft if the driver wasn’t listed as approved to drive the car. Check your driver list.
- Racing vehicles – Comprehensive claims may be denied if the car was being used for racing or off-roading sports when stolen.
- Natural disasters – Damage from events like floods may only be covered up to a set policy limit, which can fall short.
- War – Theft stemming from a war or military unrest typically isn’t covered.
Scrutinize your full policy language for details on exclusions and limitations on comprehensive coverage for theft. Never assume everything is blanket-covered. Know what circumstances would result in a denial of coverage.
Changing Insurance Coverage After Theft
The unfortunate reality is that once your car is stolen, you’re at much higher risk of it occurring again. For this reason, you may want to re-evaluate your insurance coverage when getting a replacement vehicle. Here are some things to consider:
- Increase your deductible – this can help offset the cost of higher premiums
- Lower your comprehensive coverage limits – if the car value is lower, you need less coverage
- Drop collision coverage – for an older car, it may not be cost-effective
- Add GAP insurance – covers the difference if the car is totaled and insurance payout is less than the car loan
- Increase liability protection – in case a theft causes injury or property damage
- Add roadside assistance – provides transportation if a theft disables the vehicle
- Use anti-theft discounts – insurers often offer discounts for anti-theft tech
Don’t wait until it’s time to renew. As soon as you have a theft claim, contact your provider to discuss optimizing your coverage for the future. Being strategic can help minimize the cost increases that will result.
Can You Back Out of Buying a Car With a Theft History?
Many car buyers are understandably wary of purchasing a used vehicle with a record of being stolen. If you find yourself having second thoughts about buying a car with theft history, here is the key question – did the seller disclose this history upfront before you purchased?
If the seller informed you the car had been stolen prior to the sale, then you likely won’t have grounds to back out unless there are legal warranty provisions allowing it. Technically, the disclosure puts the risk in your hands as the buyer.
However, if you only discovered the theft history after purchasing through an independent vehicle history report, you may have a case to potentially reverse the sale. Most states require disclosure of major vehicle defects prior to sale.
Talk to the seller first and discuss cancelling the sale and refunding your money. If they refuse, consult an attorney to explore legal remedies in your state. Small claims court may also be an option depending on the purchase price of the vehicle.
The lesson is to always get a vehicle history report yourself first before completing a purchase. This will reveal past theft that the seller may try to hide from you otherwise. Being an informed buyer is critical.
Warning Signs a Used Car May Be Stolen
If you’re shopping for a used car, it’s important to be vigilant about any red flags that a vehicle may be stolen. Here are some warning signs to watch for:
- Title inconsistencies, like an outdated title or name spelling errors
- VIN appears tampered with or doesn’t match registration
- Seller seems evasive or hesitant allowing inspections
- Price is substantially below market value
- Unable or unwilling to provide vehicle history report
- License plate appears swapped out or doesn’t match registration
- Mileage seems significantly too low for the age
- Car location doesn’t match seller’s stated home address
- Unwillingness to meet at their residence or photo ID
- Requests payment in cash or money order instead of checks
- Lack of proper registration or insurance paperwork
Any single factor on its own does not prove a car is stolen. But if multiple suspicious signs are present, it may be safest to walk away. Protect yourself by thoroughly vetting the seller, paperwork, and vehicle history before purchase.
What to Do if You Unknowingly Buy a Stolen Car
Finding out you unknowingly purchased a stolen vehicle can be upsetting and stressful. If this happens to you, here are the best steps to take:
First, contact the police and insurer right away to report it. Provide all documentation you have related to the sale and seller. This establishes an important paper trail in case the issues escalates to court.
If financing was used, notify the lender of the potential fraud immediately as well. They will conduct their own investigation around the loan application details.
Consult an attorney knowledgeable in state auto sales laws. They can provide guidance on your consumer rights and options to seek financial restitution. Suing the seller in civil court is likely the next step.
Be prepared to surrender the car as evidence or return it to the rightful owner depending on the police investigation. Make sure you receive proper compensation for your losses before releasing it.
Getting professional legal advice is crucial in navigating this situation to protect your rights as the innocent buyer. With the right evidence and advocacy, you can recover financially, even if the car itself gets returned to original owner.
Dealing with car theft can be extremely disruptive, but having comprehensive insurance coverage provides important protection. Take proactive steps to prevent theft, thoroughly document any incident, and ensure you get fair value for your claim. Pay close attention to policy limitations and exclusions so you understand exactly what is covered.
While the claims process varies across insurers, following the standard steps of prompt reporting, cooperation with investigation, and active negotiation during valuation will help ensure the best outcome when the unfortunate happens. Remember to explore adjusting your coverage after a theft to prevent being in a similar situation down the road.