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Does Insurance Cover a Stolen Car? Everything You Need to Know

Wednesday, 25 October 2023

As a car owner, there is probably no worse feeling than finding out your vehicle has been stolen. Not only is this an invasion of your privacy, but it also causes a major inconvenience as your main form of transportation is now gone. Your car is likely one of your most prized possessions and a necessity in your daily routine. With that in mind, you will likely find yourself wondering if your auto insurance provider will cover your stolen car. This blog will address that concern and provide an in-depth look at some other questions that you might have about this unfortunate situation.

Transcript: Does Insurance Cover Stolen Car?

Does Insurance Cover a Stolen Car?

Depending on your policy, your auto insurance will provide coverage in the event your car is stolen. Basic auto insurance includes coverage for liability, direct compensation, uninsured automobiles, and accident benefits, but theft is not included. To receive that protection, you will need to opt into comprehensive, specified perils, or all perils coverage.

Comprehensive coverage will cover damage to your vehicle from circumstances that were either unforeseen or out of your control. This includes weather-related issues, animals, falling trees or objects, vandalism, and, most importantly, theft. Keep in mind it does not provide coverage for a collision. If you lease or finance your vehicle, you might be required to carry this coverage. Additionally, it will not cover you if someone living in the same household steals your car.

Specified perils coverage is quite similar to comprehensive coverage. It provides protection for events that are specifically named in your insurance policy. There are a variety of perils you can include in your policy, however, one of the main differences between the two is that specified perils coverage does not protect against damage from falling objects or vandalism. It's important to note that the exact perils covered can vary from one insurance policy to another, and insurers may offer different variations of specified perils coverage. You should carefully review your policy to understand which ones are covered and if any exclusions or limitations apply.

Just like its name suggests, all perils is a type of insurance that provides broad protection for various perils and risks. Also known as all risk coverage, it offers a combination of collision and comprehensive coverage to policyholders. This means that you have access to extensive protection in comparison to the options mentioned above. For instance, if someone living with you were to steal your car, you would be covered for any damage or loss you incur.

Theft & Car Insurance: FAQs

While we have answered the question, “Does insurance cover a stolen car?”, there are some other queries that we would like to dive into as well. By highlighting these additional details, you should have a solid understanding of everything you need to consider if you fall victim to car theft.

How much will insurance pay for a stolen car?

The amount you can expect to receive in a payout is known as the actual cash value (ACV). This is a term that is used to describe the current market value of your car at the time of your claim. Factors like its age, mileage, condition, and depreciation are all taken into consideration when determining this amount. If your vehicle is stolen, you will be paid up to the actual cash value of your car minus your deductible. This is the amount that you are responsible for before your insurance coverage kicks in.

What happens if a stolen car is found after insurance payout?

Most companies have a 30-day waiting period for reported stolen vehicles before processing these claims. If you find out that your car has been found after receiving your payout, you will need to inform your insurance provider. Since they paid you money for your missing car, they are technically now the owners of it. If the car is in good enough condition, the insurance company might choose to sell the vehicle.

Does insurance pay for a stolen car if the key is in it?

There are various scenarios where people might leave their keys in their car. Some might start their car before work so that it warms up by the time they get into it. Others might leave a spare key in a hidden spot in case their original copy goes missing. But does insurance cover a stolen car if your keys were left inside?

Regardless of the reason, if you left your keys in your car when it was stolen, you can still expect to be covered. While that may come as a relief, it’s highly recommended that you never leave your keys inside, as it makes theft that much easier. Consider installing a remote control starter or keeping your spare key in your home to curb the risk of theft.

Does car insurance cover a broken window from theft?

Thieves have all sorts of tricks that they use to break into vehicles. One way they might do so is by smashing one of your car’s windows. If this were to happen to you, your car insurance should cover the cost of repairing or replacing the window, provided you have comprehensive coverage. This would fall under the vandalism portion of your policy. Here’s how it works:

  1. You need to notify your insurance company as soon as possible. They will guide you through the claims process, which might involve providing details about the theft and damage. Take photos to document the damage, as these can be used to support your claim and may be required for a police report. There is also a chance that an adjuster will be sent to assess the damage.
  2. Once the claim is approved, your insurance provider will either arrange for the repair or replacement of the broken window or provide instructions on where you will need to get the repairs done.
  3. You will have to pay the deductible listed in your policy. For example, if your deductible is $500 and the cost of replacing the broken window is $800, you will pay $500, and your insurance provider will cover the remaining cost.

Does car insurance cover personal property left in a vehicle?

It is quite common for motorists to leave personal items in their cars. Common examples include GPS devices, sporting equipment, car seats, and sunglasses. Leaving these in your car is sometimes more convenient than taking them out every time you leave your car.

That said, if these items are stolen from your car, your car insurance will not cover them. Your car insurance is only intended to cover the vehicle itself and certain liabilities stemming from accidents. However, if you have home or tenant insurance, your policies might cover these items, even though the theft occurred outside of your home.

What happens if your car gets stolen on finance?

In addition to notifying the police and your insurance provider, you should also inform your lender. Unfortunately, if you finance your vehicle and it is stolen, you are still required to make regular payments on it. Once your claim is settled, your insurance company will provide you with a payout based on the ACV of your vehicle.

The amount you receive can then go towards paying off the remaining balance of your car loan. In some cases, this amount might be less than what you owe on the car - which means you will have to pay the rest out of your own pocket. That said, if you have guaranteed auto protection, also known as gap insurance, your payout will actually cover the entire amount remaining on your loan instead of the ACV.

How does car theft affect insurance premiums?

Many people who have fallen victim to car theft ask themselves, “Since my car has been stolen, will my insurance go up?”. Simply put, you shouldn’t expect to see a dramatic increase in your policy, if at all.

Conversely, if your claims history has several instances of car theft on file, there is a good chance you can see your rates increase. Living in a neighbourhood with a high crime rate or purchasing a vehicle model that has high theft rates can also lead to increased premiums. It's essential to communicate with your insurance company to understand how a theft claim and these other factors might affect your premiums specifically.

What to Do if Your Car Has Been Stolen

If you come to discover that your car has been stolen, remain calm and follow these steps below:

  1. Contact the local authorities and file a police report. Provide them with relevant details about your car, such as the make, model, year, license plate, VIN number, and where you last had it.
  2. Contact your auto insurance broker or provider to inform them of the situation and confirm if you have the proper coverage.
  3. If any of your personal belongings were left inside the vehicle when it was stolen, contact your home or tenant insurance provider to let them know.
  4. If you have the right coverage, report a claim to your insurance provider as soon as possible.

Insurance Made Easy with BIG

Safeguarding your vehicle from theft with car insurance is paramount in protecting your investment. With the right coverage, you can rest assured that your stolen car will be swiftly addressed, alleviating the financial burden and stress that can follow such an unfortunate event. To learn more about the auto insurance options available to you, contact a BIG broker, visit your nearest branch or request a quote today.

By: Devon Gribble