What kind of coverage do I have if my car is stolen?

What kind of coverage do I have if my car is stolen?

May 06, 2019

One of the worst feelings to experience is the realization that your car has been stolen. May you were coming out of your house to leave for work and your car is missing or maybe you just finished grocery shopping and your car is no longer there. No matter the scenario, it's a horrible feeling to know that an object you depend on so much is now gone.

The first step after any car theft is to call the police. It's very important to make an official report to one, help find the vehicle, and two, to provide your insurance company with a detailed police report of the incident.

Step two, call your insurance company. It's important to let your insurance company know about the theft for a couple of reasons:

  1. Notifying the insurance company of the theft will allow your carrier to provide protection in the event your vehicle is used to hurt someone or causes property damage while out of your possession
  2. Notification will allow the insurance company to begin to determine coverage provided by your policy and start working towards replacement if allowable

Unfortunately a common misconception many people have is that if they have car insurance then they are always covered for a vehicle replacement in the event of a car theft, however, this isn't true. Unless you have comprehensive coverage included on your policy there is actually no coverage to replace your vehicle if it is stolen. A liability only policy is great for covering injury in accidents, but provides no coverage to your vehicle in the event of theft or an accident.

Comprehensive coverage will allow the insurance company to work on providing payment to you to replace your vehicle minus your deductible. Most insurance carriers will provide payment to you on an ACV basis which is the amount you paid for your vehicle minus depreciation. Always keep in mind that prior to providing payment for a vehicle insurance companies will thoroughly investigate to ensure that a vehicle as really stolen without the insured's knowledge. I know that seems insulting to most people, however, there are many people that use vehicle theft as a way to defraud insurance companies. Additionally, if your policy includes rental car expense the insurance company can set up a rental car right away for you while they investigate the situation and issue payment.

If you aren't clear on what type of coverage you have, take the time to talk to your agent. Hopefully you never have to deal with a car theft, but if you do, make sure you understand how you're covered.