Does car insurance cover theft?

Comprehensive insurance and theft coverage

Comprehensive insurance covers car theft, paying out your vehicle’s cash value minus your deductible when it’s stolen. Most insurers use third-party databases to calculate actual cash value, which may differ from the purchase price and replacement cost.

The payout amount you’ll receive depends on several factors:

• Your car’s age
• Your car’s mileage
• Your car’s market value
• The condition of your car before theft

Though no states legally mandate comprehensive insurance, lenders may require it for financed or leased vehicles. Even if you’re a car owner, Rob Bhatt, an insurance expert at LendingTree, recommends this protection for vehicles worth more than a few thousand dollars.

However, you should understand what isn’t covered before purchasing comprehensive coverage. Josh Damico, vice president of insurance operations at insurance comparison app Jerry, outlines these key exclusions:

• Cases involving fraud or policy violations
• Losses due to negligence, such as leaving keys in an unlocked car
• Personal items stolen from your car (these fall under homeowners or renters insurance)
• Rental car expenses, unless you’ve added reimbursement coverage

Did you know?

Other types of auto insurance won’t help if someone steals your car. Liability insurance only pays for damage you cause to others’ property. Collision coverage handles damage from accidents with other vehicles or objects. For theft protection, you must buy full coverage car insurance.

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How to file a theft claim

“The first thing you should do is report the theft to law enforcement,” said Maya Afilalo, an analyst at AutoInsurance.com. A police report is essential for your insurance claim and helps law enforcement track down your vehicle. After filing the report, contact your insurance company right away with these key documents:

• Photos of your vehicle (if available)
• Police report number
• The last known location of your car
• Title or loan/lease documents
• Vehicle registration

Your insurance company will investigate the claim and likely wait about 30 days for possible vehicle recovery. If law enforcement recovers your car, the insurance company will send an adjuster out to assess any damage and see if it needs repairs. It’ll then cover repair costs minus your comprehensive deductible, assuming the quote is less than your car’s market value.

However, Bhatt warned, “Car thieves often leave stolen cars in terrible condition when they abandon them. So your car may end up being a total loss, even if it’s recovered.” In this case, you’ll receive a check for your car’s market value minus your deductible.

Keep detailed records

If you disagree with the offered settlement, Bhatt suggests gathering evidence such as maintenance records, photos and local sales data for similar vehicles to support a higher value. You can also make a case for a higher value if you’ve recently installed new original manufacturer parts.

Car theft prevention

Several effective anti-theft devices can protect your car and lower your insurance costs. Afilalo explains that these fall into two categories: passive systems that work automatically and active devices that you must engage yourself. Popular anti-theft technologies include the following devices:

• Passive devices: GPS trackers, smart keys and engine immobilizers
• Active devices: Steering wheel locks, kill switches and brake locks
• Built-in features: Car alarms and automatic door locks
• Tracking systems: OnStar, LoJack or hidden AirTags

Anti-theft devices can earn you insurance discounts of up to 30%, with rates varying by device type and insurance provider. And “some companies give you an additional discount for aftermarket theft prevention [measures such as] VIN etching,” Bhatt pointed out. This displays your vehicle identification number in more locations to deter theft and aid recovery.

While anti-theft measures help, they shouldn’t replace comprehensive coverage. Damico highlights that using both provides the best protection against theft. Besides installing security devices, taking these basic prevention steps can reduce your chances of experiencing car theft:

• Avoid leaving your car in high-crime areas
• Choose a garage over street parking when possible
• Hide anything that might suggest valuables inside
• Install a dashcam (hardwired if possible)
• Keep windows closed when parked
• Never leave your car running unattended
• Park in well-lit areas near building entrances
• Store your car title at home, not in the vehicle
• Take photos of your car from all angles for documentation
• Take your keys with you even for quick errands
• Tint windows to prevent thieves from seeing inside
• Use attended parking lots when available

Other types of insurance and theft

No other car insurance coverage besides comprehensive will protect you if someone steals your vehicle. Bhatt reiterates that liability insurance only covers damage you cause to others, while collision coverage handles accident-related damage to your car. Among these insurance types, comprehensive costs more than liability but typically less than collision.

If you want more robust vehicle protection, you can add comprehensive coverage to your existing policy anytime. But Afilalo notes one important caveat: Coverage won’t apply retroactively to a theft that has already occurred. So, it’s best to get it before you think you’ll need it.

To build a complete protection plan, consider these add-ons alongside comprehensive coverage:

• Credit card coverage for rental cars (could also cover towing)
• Homeowners or renters insurance to cover personal items stolen from your car
• Rental reimbursement coverage for temporary transportation if your car is missing or in the shop for repairs

Pro tip

If you have an older vehicle worth less than the annual cost of comprehensive coverage, you might choose to skip this protection. In these cases, saving the premium for potential out-of-pocket expenses could make more financial sense.

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