Does Car Insurance Cover Theft?

It has to be one of the worst-case scenarios involving your car. You walk out of your home or the store one day and see that your vehicle has been vandalized, broken into, or, much worse, not where you left it at all.

After the initial shock of dealing with the crime at hand, you’ll likely have to get insurance involved by filing a claim. Let’s take a look at how your auto insurance helps you in case of theft or vandalism.

Yes, car theft is likely covered if you have comprehensive coverage. Auto insurance has a few different components and, while comprehensive coverage is technically optional, it’s common for drivers to have and is the only way your auto insurance policy will cover a stolen vehicle.

Comprehensive coverage financially guards you against incidents that happen while your car is parked, which includes a break-in, and will pay for repair costs for your vehicle after a theft. A comprehensive plan covers things like broken windows and busted door locks.

It won’t reimburse you for any personal items that are stolen since comprehensive coverage is only limited to fixed features of your vehicle. At the end of the day, it’s car insurance, so it’s only responsible for your car.

You’re not completely out of luck, though, as the personal property portion of your homeowners or renters policy may cover your stolen belongings.

Comprehensive coverage isn’t required by law, unlike liability insurance. The difference between these two will be discussed a little later, but just know it’s possible you might not have comprehensive coverage. Most lenders do require it if you’re leasing or financing your car.

It’s important to note that a comprehensive plan, like liability insurance, has a deductible you have to pay when you file a claim. A deductible is how much you’ll pay before your car insurance covers the rest.

For example, if the damage done to your car after a break-in amounts to $2,000 and you have a $500 deductible, your insurer will pay $1,500 to cover costs. Your damages are covered up to your policy’s limit.

This means filing a claim with your provider after a car theft might not always be worth it. For example, if the damages from a car break-in total $300 and you have a $500 deductible, filing a claim would be kind of silly because you’d be paying $500 to your insurer who won’t reimburse you since the costs are covered by your deductible.

Your comprehensive coverage also has your back if your car was stolen entirely. If this is the case, your provider will likely reimburse you for the actual cash value of your car. This means the insurance company factors in depreciation before reimbursing you. 

The circumstances shouldn’t matter much, either. Whether your car was stolen in front of your house or at a public place, or even if you left your keys inside, your comprehensive coverage should financially protect you.

After you file a police report, your insurer will investigate the incident themselves. This takes some time since the company has to be sure it’s not getting scammed by someone who’s staging a fake claim attempt. After talking to an adjuster and your lender, if needed, you should eventually get a payout for your stolen car.

If you owe more than your car is worth and the payout is less than what you still owe, you’ll be responsible for paying the remaining amount to your lender. That’s why it’s always smart to invest in Gap insurance.

Your car may be recovered during the claims process. Depending on what’s happened to the car, your provider may choose to replace and pay for damaged parts or deem it unsalvageable and reimburse you for a new vehicle.

Comprehensive coverage also protects you from vandalism. Some examples of vandalism that are covered under a comprehensive plan include broken headlights, smashed windows, slashed tires, graffiti and keying. It won’t cover intentional damage or damage caused by someone named on the policy.

Like filing a claim after car theft, you should be sure that the damage costs more than your deductible. You wouldn’t want to file a claim otherwise.

Your rate may not go up after one comprehensive claim, but don’t expect to keep filing multiple claims without any repercussions. In general, claims cause your premiums to increase. The reasoning behind this is after you file a claim once, you’re more likely to file one again.

If your rate does increase after a comprehensive claim, it likely won’t go up as much it would for an at-fault accident. Some companies may not raise your rate at all and others will forgive it as long as it’s below a certain dollar amount.

As mentioned earlier, comprehensive coverage isn’t responsible for personal belongings inside your car if it’s broken into or stolen. Your homeowners or renters policy may cover this. Also, your comprehensive coverage won’t reimburse you for legal fees or damage caused by another car. Other parts of your auto insurance handle this.

Comprehensive coverage protects you from theft, vandalism, and even damage caused by weather or riots while your car is parked. It’s wise to know what parts of your car insurance to turn to in other scenarios. 

Your liability insurance should cover another driver’s injuries or damage to their vehicle in an accident in which you’re at fault, while collision coverage protects your car in accidents.