Will Car Insurance Replace My Car If It's Stolen?

You might assume any car insurance policy would cover you if your car is stolen. But not all policies do. It all depends on the type of coverage you have.

If you have the right kind of insurance for car thefts, you'll probably be covered, but there are some things you should know about filing a claim and having that claim paid. 

Having your vehicle stolen is frustrating and angering, but if you can prevent it from happening in the first place, you can avoid that headache entirely. 

We'll cover the basics of insurance, how to file a claim, and how to keep your vehicle safe so you'll be less likely to have to deal with losing a vehicle in the future.

Insurance and Stolen Vehicles

Each U.S. state has liability laws. So when someone causes a crash, they're liable for the damage. In addition to liability laws, states have also enacted liability insurance laws. Without insurance, the average person wouldn't have the resources to pay for the damage of even a minor fender bender, much less a significant accident.

State-Required Liability Insurance

Most states require liability insurance which covers the damage you cause to another party in a crash. But since the state-required limits are too low for adequate car insurance coverage, most people opt for higher liability limits. Even with a robust liability policy, you won't have coverage for a stolen vehicle, though.

Comprehensive Coverage

No states require comprehensive coverage, which is often combined with collision coverage and called "full coverage." But if you have a loan or lease, your lender or leaseholder will almost always require you to carry full coverage. 

You need comprehensive coverage if you want insurance to help cover your losses if your vehicle is stolen. It also covers the financial impact of damage to your car from vandalism, weather events, and accidents involving wildlife. 

If you have rental car insurance, that will cover the cost to rent a car while you shop for a new car. If you don't have that kind of coverage, you may have to depend on alternative modes of transportation.

Deciding if Comprehensive Coverage Is Right for You

Even though comprehensive coverage provides valuable financial protection, it might not be worth the cost in every situation. As a rule of thumb, if your vehicle is over 10 years old, you should evaluate how much car full coverage costs to be added to your policy. If the annual cost is more than 10% of your vehicle's value, you should drop the coverage.

To illustrate this principle, imagine a vehicle worth $2,000. If full coverage costs an extra $300 a year, it's probably not worth paying that higher premium. Additionally, you'll likely have a deductible - let's say it's $500 - so the most you'll get from insurance is $1,500. You could save that amount in five years if you chose to allocate the premiums to a savings account.

Additionally, you have to consider that filing a claim for a stolen vehicle will likely increase your rates for several years following the claim. So, you could be at a net loss with a low-value vehicle. 

Filing a Claim for a Stolen Vehicle

Dealing with a stolen vehicle is stressful and inconvenient, but you can expedite the process if you take the proper steps.

File a Police Report to Notify of Theft

If your vehicle is stolen, the first phone call you need to make is to the police. Then they can have your report on record and start searching for your car. 

Additionally, when you contact your car insurance provider, they'll want a copy of the police report. Make sure you get the officer's name taking your report because that information can make getting a copy more straightforward.

If your vehicle has OnStar or a similar GPS tracking system, let the police know that information because it may help them recover your vehicle before it's destroyed or dismantled for parts. 

File an Insurance Claim for Your Stolen Vehicle

Your next step will be to file a claim with your insurance provider. They'll let you know what additional information is needed. Likely, they'll need the title and a list of anyone you allow to use your car.

Sometimes, assumed thefts are the result of some miscommunication where a friend borrows your car without letting you know. 

If you have comprehensive insurance, you'll be covered for your losses concerning your stolen vehicle, but it may take a little bit of time to settle the claim. First, the insurance company will need to investigate the situation to confirm the vehicle was stolen. They'll also want to wait to see if the car is recovered.

You picked a deductible when you added comprehensive coverage to your car insurance policy. Higher deductibles equal lower monthly premiums, and lower deductibles require higher premiums. When your insurance company settles your claim, they'll subtract your deductible from your payment.

If your car is not recovered, they'll reimburse you for the value of your car minus your deductible. For example, if your car is worth $15,000 and you have a $1,000 deductible, they'll issue you a check for $14,000. 

If your car is recovered but incurred $7,000 in damage, they'll pay for $6,000 of the repair costs, and you'll have to pay your $1,000 deductible.

If your vehicle is recovered but damaged, your insurer will cover a tow to a body shop to assess the damage. Find the best tow company in your area to do your best to ensure no additional damage happens.

In some cases, claims will not be covered, even partially, such as in the case that your car is stolen while it is being shipped on an auto transport carrier. 

Preventing Your Vehicle From Being Stolen

There are several ways to keep your vehicle from becoming a target for thieves.

Don't Leave Your Car Running Unattended

It might seem convenient to leave your car running while your run into the coffee shop to pick up your order, but it's not worth the risk.

Another scenario where people often leave their car running unattended is in the winter when they start it and let it warm up. An unattended car running in a driveway can seem like it's begging someone to steal it. Modern cars are designed to run well even without a warmup period, so you can't use that as an excuse.

Protect Your Keys and Remotes

Did you know thieves have developed ways to clone your keyless entry and start? Keep your keys away from your front door where would-be thieves can catch the signal. Also, keep your keys in a pouch or sleeve that blocks the signal.

Park in Your Garage

This advice doesn't work for everyone because many people don't have a garage, and if they do, they may not have it cleared. But if it's an option for you, your car is less likely to be stolen when it's in the garage.

Even if you do everything right, sometimes you'll still become a target of thieves. If you want to be covered by insurance if your car gets stolen, make sure you carry comprehensive coverage and follow the tips above to file your claim and reach a settlement successfully.

Melanie Musson writes and researches for the insurance and legal advice site, FreeAdvice.com. She's passionate about helping others understand their insurance needs and find the best policy for the best price.