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Having the right insurance policy in place can help you get reimbursed if your vehicle is stolen. But comprehensive auto insurance is the only type of policy that covers theft. How does insurance cover a stolen car? Here’s what to know about how comprehensive policies work, how to file a claim, and exclusions that may not be part of your coverage.
Key Points
• Comprehensive insurance is required for theft coverage, safeguarding the car and its parts.
• Liability and collision policies do not cover car theft.
• A police report is required to file an auto theft claim with your insurer.
• Exclusions include vehicle upgrades and personal property.
• Insurance reimburses the actual cash value, not the cost of a new car.
Yes, Car Insurance Covers a Stolen Car — If You Have the Right Coverage
Not every type of car insurance covers a stolen vehicle. Even if it does, how does car insurance cover a stolen car? You’ll need comprehensive coverage in order to successfully file a claim.
Comprehensive Coverage: The Key for Stolen Car Claims
Does car insurance cover theft? It can if you have a comprehensive auto insurance policy. You can file a claim for one of two scenarios: a stolen vehicle that isn’t recovered, or one that is recovered. Here’s how coverage works for each one:
• Vehicle is not recovered: After subtracting your car insurance deductible amount, your insurer will likely reimburse you for the vehicle’s actual cash value.
• Vehicle is recovered: If you find the stolen vehicle and there’s damage (like broken windows), a comprehensive policy should cover the repairs after your deductible.
How Comprehensive Differs from Liability and Collision
Each state has its own basic requirements for car insurance, but there are actually four main types of policies to choose from with varying degrees of coverage.
• Liability: Usually the minimum coverage required by states, it covers bodily injury liability and property damage liability of another person when you’re at fault for the damage.
• Collision: This additional coverage repairs or replaces your car if it’s been in a collision, regardless of fault.
• Uninsured motorist coverage: Uninsured motorist coverage pays out when you’re in an accident and an uninsured driver is at fault.
• Comprehensive: This type of policy covers damage caused by things like theft, fire, vandalism, and fallen objects.
As you can see, the only way insurance covers a stolen car is if you have comprehensive insurance as part of your policy.
When a Stolen Car Is Typically Covered
If your car gets stolen, insurance covers it in a few scenarios under a comprehensive policy. It covers the car itself if it’s not recovered, damage if it is recovered, and stolen parts (including catalytic converters).
What to Do If Your Car Is Stolen
Your car is missing — now what? Here are a few things you need to do next.
Immediate Steps to Take After Your Car is Stolen
The first thing to do after your car is stolen is to call the police and file a report. A stolen vehicle report is typically required by the insurance company in order to get reimbursed.
Next, file a claim with your insurance company.
Finally, if your car was financed or leased, you must report the theft to your lender as well.
How to Report a Stolen Car to Police and Your Insurer
Once you call the police to report your stolen vehicle, you’ll need to give them some key information:
• Vehicle make, model, and color
• License plate number
• Vehicle identification number (VIN)
• Car GPS system details (if applicable)
The insurance claim process varies depending on your insurance company. Most offer options to file a claim online, over the phone, or through their app.
What Documentation You’ll Need for Your Claim
Here’s what insurance companies typically require when you file a claim for a stolen vehicle:
• Vehicle title
• Locations of keys both before and after the vehicle was stolen
• Contact information of anyone who was able to access the car
• Vehicle details, including mileage, maintenance records, and upgrades
• Financing or leasing information
Recommended: How Much Auto Insurance Do I Need?
How a Stolen Car Insurance Claim Works
The claims process for a stolen vehicle is different than a collision because it’s likely that there is no physical car to assess its value.
The Waiting Period for a Stolen Vehicle Claim
Many insurers treat an unrecovered vehicle like a total loss. But first, they’ll enact a waiting period to see if your car is recovered. The waiting period usually lasts 30 days. After that period, they can initiate the appraisal process if your car hasn’t been located.
It’s worth noting that if your car is settled as a total loss and it’s recovered after you receive reimbursement money from your insurance company, they’ll own the car. However, it may be possible for you to buy it back.
How Your Car’s Value is Determined (Actual Cash Value)
Most insurance companies use actual cash value (ACV) to determine your reimbursement amount (up to the limit of your policy). That means you don’t receive the amount of money it would take to buy your car new today. Instead, the insurance company accounts for depreciation, which factors in things like age, mileage, and condition.
Submitting documents like maintenance and service work could help you qualify for a larger cash value estimate.
Common Exclusions and Limitations to Be Aware Of
It’s important to quickly notify your car insurance company when your car is stolen and respond to any follow-up requests. Otherwise, your claim could be delayed or even denied.
Other reasons that may limit your payout or cause a claim denial include:
• Incomplete documentation
• Unauthorized driver using the car
• Lapsed policy
• Car being used outside of the policy terms (like ride-sharing, for instance)
What Isn’t Covered When Your Car is Stolen?
In addition to those exclusions, here are some things typically not covered by a comprehensive car insurance policy.
Personal Belongings Left in the Car
Any personal belongings left in your car aren’t covered by your auto insurance when the vehicle is stolen. However, if you have renters, homeowners, or condo insurance, you should have coverage for stolen items, even if they’re outside the home at the time of theft. You’ll need to file a separate claim with that policy. Also understand that your policy’s deductible and personal property coverage limit also apply to how much you’ll be reimbursed.
Custom Parts and Equipment (Unless Endorsed)
Standard comprehensive policies usually don’t cover custom parts, upgrades, or anything added aftermarket. The exception is if you’ve added custom parts and equipment (CPE) coverage to your existing policy.
Theft Due to Fraud or Negligence
Your auto policy won’t cover a car theft if the policy holder fraudulently staged the theft or was negligent with the vehicle’s safekeeping.
Here are some examples of insurance fraud related to car theft:
• Hard fraud: The owner plans a theft with a partner and files a claim with the insurance company
• Soft fraud: When accurate information is left off the insurance claim, such as:
◦ Leaving out household driver information
◦ Overreporting the value of the car
◦ Lying about where the car is registered (since zip codes can cause price fluctuations depending on crime rates)
Recommended: Auto Insurance Guide
The Takeaway
Does car insurance cover theft? If your car is stolen and you have comprehensive auto insurance, it will cover the cost to repair or replace your vehicle, up to its actual cash value at the time of the theft, minus your chosen deductible. But keep in mind that If your car is found after the insurance company pays the claim, it will own the vehicle. You might be able to buy it back, if you wish.
When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.
FAQ
Will my insurance pay for a rental car if my car is stolen?
Does insurance cover car theft of rental cars? Unfortunately, not as part of a standard comprehensive auto policy. Instead, you need to have rental reimbursement coverage included in your overall policy.
Does car insurance cover personal items stolen from my car?
No, personal items are typically covered by renters, homeowners, or condo insurance.
How is my stolen car’s value determined for the claim payout?
Your insurance company will assess the car’s value based on its actual cash value. They’ll take into account things like the age, condition, and mileage of the vehicle.
Will my insurance rates go up after a stolen car claim?
It’s possible that your insurance rate will increase after filing a stolen vehicle claim, even if you weren’t at fault.
What happens if my car is recovered after the insurance company pays my claim?
The insurance company will own the car. You may be able to use your settlement funds to buy back the car if you wish.
photo credit: iStock/Rattankun Thongbun
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