Does auto insurance cover stolen vehicles?

Does auto insurance cover stolen vehicles? If you only have your state’s minimum liability insurance coverage, you will not be eligible to get a stolen car insurance payout in the event of a theft.

Instead, you will need to have full coverage insurance that includes comprehensive auto insurance if you want your stolen car covered. Keep reading to learn how your insurance company will handle stolen cars so you can buy the right car insurance coverage. 

If you want to purchase comprehensive coverage to protect your assets if your car is stolen, use our free quote comparison tool to find the best rates on car insurance for theft.

File an Insurance Claim if Your Car Is Stolen

Understanding the types of auto insurance can ensure you are reimbursed fairly should your car ever be stolen.

You can only file an insurance claim for a stolen car if you have the right coverage. If you have comprehensive coverage, you can file a car insurance claim for theft. Without this coverage, a stolen car has no protection. 

Learn more: How to File a Car Insurance Claim

It’s essential to understand how your vehicle is valued. Due to depreciation, insurance companies do not cover the purchase price of your car. Instead, the company will look at the value of your vehicle on the day that it was stolen. This is your vehicle’s actual cash value, also known as fair market value.

To process the claim, the insurance company needs a copy of the police report. A representative will also interview you regarding the last time you saw your vehicle.

If Your Vehicle Is Recovered

When your vehicle is stolen, there is always a chance it could be recovered. If this happens before the claim closes, the insurance company generally considers the matter a damage claim.

The insurance company determines the cost of repairs based on the threshold in your state. If your damages exceed this threshold, your claim will be treated as a total loss.

If Your Vehicle Isn’t Recovered

If your vehicle isn’t recovered during the time your claim is open, then your claim is considered a total loss. This means your car is valued based on comparable sales in your area.

Once your deductible is subtracted from the determined value, your insurance company will provide you with a check to compensate you for the remainder of your loss.

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Insurance That Covers a Stolen Car

Motor vehicle operators must meet the minimum auto insurance requirements by state on their vehicles. The basic coverage requirements, also known as liability, are similar in each state and typically cover some or all of the following:

• Body injury
• Property damage
• Uninsured motorist
• Personal injury protection

These coverages are designed to primarily protect the driver and passengers of any vehicle impacted by the insured’s negligence, but state minimum insurance doesn’t cover theft.

You need comprehensive coverage for theft. If you only request the policy options required in your state, you may not be insured after a collision or if your car is stolen. Instead, consider comprehensive and/or collision insurance.

Comprehensive and Collision Coverage

Just what is the difference between collision and comprehensive auto insurance?

Comprehensive coverage pays out to repair or replace your automobile if it’s damaged during a natural disaster, vandalized, or stolen. Collision insurance will pay if you are in an accident with another vehicle or object.

Comprehensive insurance is more expensive than liability and collision coverage but offers you peace of mind should something unexpected happen to your vehicle.

The more coverage you choose, the higher your rates will be. Another factor that may increase your rates is the deductible amount you choose. The higher your deductible, the lower your rates will be. 

However, this also means that the insurance company will pay less for a claim. For example, if the claim is less than your deductible, then you wouldn’t receive a payout at all. It’s a good idea to choose a deductible that you can afford but not one that would leave you without a vehicle.

A Theft Claim May Raise Auto Insurance Rates

If you are determined to be at fault or negligent at the time of the claim, this can cause your insurance rates to increase significantly. However, when your vehicle is stolen by no fault of your own, opening a claim to recover your loss should not impact future insurance rates. 

This does depend on the insurance company and how many claims you have filed in the past. So, shop with multiple insurers to find one with the right coverage for you.

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What You Need to Know About Getting a Stolen Car Insurance Payout

It’s a good idea to discuss every part of your policy with your insurance company before you buy auto insurance, so you know you have the right coverage for all situations, including automobile theft. 

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To safeguard your vehicle, purchase a comprehensive car insurance policy that covers you in case of theft. A comprehensive and collision package with reasonable deductibles ensures you are properly protected in all situations and never left without compensation.

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