While you can’t predict when and where a car theft will happen, you can be prepared for it. Certain types of car insurance cover vehicle theft, helping prevent a bad situation from becoming worse.
Americans experienced more than 1 million incidents of car theft in 2022, according to the Insurance Information Institute.
Your odds of dealing with a stolen car might be disproportionately higher depending on where you live. California had more than 200,000 cases in 2022, almost doubling the second state on the list, Texas.
We’ll explain how auto insurance kicks in when your car is stolen — and what type of coverage you need to be protected.
Comprehensive insurance explained
When it comes to protecting yourself from vehicle theft, comprehensive coverage is your go-to insurance. This is optional coverage you add to your auto insurance policy.
Comprehensive insurance covers incidents other than car accidents that are out of your control, in particular property damage caused by:
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Weather: hail, tornados, floods, windstorms, lightning, fire, and other natural disasters.
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Vandalism: slashed tires, key scratches, broken windows, spray paint damage, substances put in the gas tank, or any other defacing.
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Theft: if your car is broken into or stolen, or if parts are taken, such as the catalytic converter that has been a target of thieves in many communities.
Comprehensive car insurance doesn’t cover accidents — that’s what collision coverage is for. And it doesn’t pay for other people’s car repairs or bodily injury if you’re at fault in an accident. Liability insurance covers that. Collision, comprehensive, and liability insurance are together commonly known as full coverage car insurance.
Another important exception to comprehensive coverage: If you’ve upgraded your vehicle with aftermarket modifications such as custom rims, trailer hitches, or spoilers, you’ll need to buy a separate endorsement to your insurance policy called custom parts and equipment coverage. It usually has a $5,000 limit.
States don’t require this type of coverage, but your lender may require it if you have a car loan. You’ll typically be required to pay a deductible when you make an insurance claim (more on that later).
Read more: These are the minimum car insurance requirements in all 50 U.S. states
When and how does car insurance cover theft?
While there’s no specific “theft coverage” policy, comprehensive coverage will take care of you in the case of a stolen car.
But bear in mind that while your comprehensive policy will pay to replace stolen parts and broken windows or locks from a break-in, personal items are not covered. (However, personal property coverage on your homeowners insurance should cover personal stolen items, even those in your car.)
This type of insurance also doesn’t cover a stolen rental car. If that’s a concern, you might check with your car insurance company about optional rental reimbursement coverage on your policy. This also would pay for transportation costs if you are without a vehicle during the claims process.
Deductibles and limits
With any comprehensive policy, you’ll have a deductible and a coverage limit.
The deductible is the amount you’re required to pay out of pocket – such as $500 or $1,000 – when you file a claim. Your coverage limit will depend on your vehicle’s age, condition, and other factors, which will determine the actual cash value of your car.
So, let’s say you have a car with a $10,000 actual cash value and a $500 deductible. If your car is stolen, you first call the police to file a report, and then you call your insurer to file a claim.
After that, assuming your claim is covered, the insurer would write a check for $9,500. That’s the actual cash value minus your deductible.
Keep in mind that the higher your deductible – meaning the more you’re willing to pay out of pocket – the lower your premiums will be.
Making a theft claim
If you’re in the unfortunate situation of dealing with a stolen car, it’s important to take the necessary steps to either get your car returned or have it replaced.
Here’s a quick guide on how to file a theft claim:
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Contact the police. Do this immediately. Your insurance company will need a police report to get the claims process underway.
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Report the theft to your auto insurance company. As soon as you have a police report, contact your insurer right away. Most major companies allow you to file a claim online.
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Gather the right information. When you contact your insurer, make sure you have the title, which contains the vehicle identification number. They also might ask for information about your vehicle’s age and condition, as well as any personal property that might have been inside the car. If you’re financing or leasing the car, they will likely ask for your account information.
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Contact your financing company. If you don’t own the car outright, let your financing or leasing company know about the theft so they work with your insurer.
Insurance companies are accustomed to working with stolen car claims. To make the process run smoothly, follow through with any requested information as quickly as possible.
Car anti-theft measures
Preventative measures can go a long way in helping you avoid dealing with the hassle of a stolen vehicle. Some can even help you land lower premiums from your insurance company.
The most basic step you can take is to simply lock your car and park in well-lit areas whenever possible. Also, a car alarm is a basic anti-theft device to install.
Most newer cars feature tracking devices that will allow you to locate and even disable the car in the case of theft. These are also easy to buy and install if you have an older car without a GPS tracking system. Steering wheel and gearshift locks are other preventive devices.
Another simple, easy measure is VIN etching – a service offered by car dealers and some police departments. This process only takes about 10 minutes and involves etching your car’s VIN number on the front windshield.
Car thieves sometimes replace the VIN plate to make the car more difficult to track. By etching the VIN on the glass, thieves would have to replace the entire windshield – which isn’t a great option for their profitability.
These measures will not only protect your car from theft, but also their presence might also bring a discount from some insurers.
For example, Nationwide says they offer anti-theft discounts (in some states) for factory-installed deterrents and devices that are installed after you purchase your car. The savings vary based on the device and where you live.
Comparing policies
Car insurance costs can vary greatly depending on where you live, the type of car you drive, your history on the road, and other factors. So, when you’re shopping around for the cheapest car insurance, don’t assume the first insurance quote you get is the best.
Make sure you know the types of coverages you want – liability, comprehensive, collision, etc. – and then start by getting online quotes from the companies you’re considering. Only buy what you truly need, but if a company is willing to throw in additional coverage at no cost, then, by all means, take it.
On average, comprehensive insurance costs around $30 per month. That amount will go a long way if your car is stolen or damaged during a weather event.
You can also use tools like the S&P ratings and J.D. Power reviews to learn about an insurer’s reputation and ability to pay claims effectively.