Does Car Insurance Cover Theft?

According to the National Insurance Crime Bureau's statistics, there were 873,080 auto thefts in 2020, which represented a 9.2% increase from 799,644 thefts in 2019. This sharp increase is a reverse of two years of auto-theft declines. The organization attributed the spike to the economic downturn caused by the COVID-19 pandemic.

Liability-only car insurance policies don’t cover vandalism and theft.

Liability-only car insurance policies don't cover vandalism and theft. You're only covered for the loss of the car if you have comprehensive coverage on your auto insurance policy. Car insurance doesn't cover items stolen from a vehicle. Homeowners and renters insurance provide coverage for these items.

Does Car Insurance Cover Theft and Vandalism?

Auto insurance can cover the following scenarios of car theft and vandalism.

Insurance Required

Events Covered

Comprehensive auto insurance

  • Stolen vehicles

  • Acts of vandalism

  • Thefts of catalytic converters

  • Stolen keys or fobs

  • Vehicle damages during a theft

Renters or homeowners insurance

  • Personal belongings stolen from a vehicle are covered with personal property coverage.

Scheduled personal property (homeowners insurance option)

  • Protects big-ticket items stolen from an automobile

Gap insurance

  • Pays the difference between the insurance company's settlement and the remaining amount you owe on your loan after your car's been stolen.

Insurance and Car Theft Scenarios

Your car is one of the second biggest assets you'll purchase after your home. In this section, you'll learn how car insurance covers different cart theft-related scenarios.

First Scenario: A thief damages your car during a break-in.

Your insurer may cover your vehicle damages if you have comprehensive insurance. This coverage will pay for the following repairs:

  • Smashed windows

  • Broken door locks

  • Damaged ignition

Scenario Two: A thief steals your automobile.

You'll receive coverage based on your current car insurance policy. Comprehensive insurance pays for your stolen vehicle's actual cash value. This car insurance also pays for damages the thief caused. You likely won't be covered if you don't have comprehensive coverage.

Scenario Three: A thief steals items from your car.

Comprehensive insurance only reimburses you for damages the thief causes to your car's permanent features, components and pre-installed parts.

Your car insurance policy doesn't cover stolen belongings, such as purses, wallets or laptops.

Stolen items are covered under your homeowners or renters insurance policy. You'll have to file separate insurance claims with your auto and home insurance carriers to receive coverage.

Liability vs. Comprehensive Car Insurance

Auto liability insurance, which is required in most states, doesn't cover car theft. It only covers another driver's damages or medical expenses when you're liable for an accident.

You'll need comprehensive insurance to replace your stolen car. Comprehensive covers non-collision events, such as theft, break-ins, shattered windows and damaged locks. If law enforcement recovers your vehicle, this coverage will pay for any damages the thief caused during the break-in.

Comprehensive coverage includes a deductible, which is the shared amount you must pay before your car insurance kicks in.

What To Do if Your Car Is Stolen

You should confirm someone stole the car before you contact the police. After you verify your car was stolen, take the following steps to report the crime.

Contact law enforcement to file a police report. This first step will allow police offers to search for your stolen vehicle. You'll also need a copy of the police report to file a car insurance claim.

Notify your auto insurer about the theft to start the claims process. Your carrier may ask for the following  information:

  • Police report number

  • Vehicle description

  • Date, time and place of the crime

  • Location of all keys to the stolen car

  • Vehicle's title, registration and VIN

  • Name and contact information of all drivers

  • Your financing company's contact information

You must finish making loan payments, even if your car was stolen.

Inform your lender about the theft. You must finish making loan payments, even if your car was stolen. Unfortunately, the theft doesn't absolve what you owe to your lender.

Finding the Stolen Car

Contact your state's Department of Motor Vehicles (DMV). These agencies maintain a database of stolen vehicles. Your DMV can also track anyone who tries to register your stolen automobile.

Search for CCTV recordings that may have captured the crime. Most businesses have outdoor security cameras. Ask stores for any security footage that may have captured the crime.

Track your car with a GPS tracking device. Many new cars have GPS technology. These systems can help law enforcement track and recover vehicles. One example is GM's' OnStar System. Some car insurers may also provide a GPS device as part of their pay-as-you-go coverage plans. These devices help insurers deliver roadside assistance to customers.

See What You Could Save on Car Insurance

Does Car Insurance Cover Vandalism?

Comprehensive insurance covers vandalism damages, such as broken windows, key marks, scratches, slashed tires and other issues. Comprehensive coverage also reimburses you for parts stolen from your vehicle, including car keys.

You may take the following steps to file a vandalism claim:

  • Call law enforcement to report the vandalism since your car insurer will require you to submit a police report with your claim.

  • Document all vehicle damages with pictures and detailed descriptions.

  • Contact your auto insurer to submit a claim. Complete the required paperwork to file your claim. When submitting your forms, include photos, a list of stolen items and the police report.

How To Prevent Car Theft

Here are eight common sense measures you can take to deter a car thief:

  1. Lock all doors, windows, trunks and hatches.

  2. Take your keys out of the ignition.

  3. Activate your anti-theft system.

  4. Select a visible, well-lit parking spot.

  5. Park your vehicle near a front-end obstacle, such as a guardrail or a wall, so thieves can't tow it away.

  6. Don't write your personal information on your keychain. Thieves can use this info to visit your home and steal your car.

  7. When you park on a street, turn your car's wheels toward the curb and lock the steering wheel to prevent thieves from moving it.

  8. Ask a car dealership to etch your VIN onto your car windows, so thieves will have a harder time reselling your car and its parts.

Anti-Theft Discounts

Most auto insurers offer anti-theft discounts, and these 12 states require car insurers to offer discounts for anti-theft devices: Florida, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Rhode Island, Texas and Washington.

Passive alarm discounts – Auto insurers favor passive anti-theft devices, which switch on once a driver removes keys from a car's ignition and shuts all doors. Insurers provide significant discounts for these devices than active ones. The average discount is 15% to 20%, and 30% for more sophisticated systems. Passive devices include ignition cut-offs and car alarms.

Active alarm discounts – You can buy inexpensive active alarm systems from local auto stores. Insurers provide a smaller discount for active devices since drivers must switch them on to get protection. The average discount ranges from 2% to 10%.

Sound-only alarms discounts – These alarms only deter theft. Sound-only alarms notify others that a thief has tried to access your vehicle. Most car insurers offer an average discount of 2% to 10%.

Engine-disabling alarm discounts – These are sophisticated passive alarm systems. Engine-disabling devices activate and disable the ignition or engine whenever the alarm sounds. You may receive a 30% anti-theft discount on your comprehensive insurance if your car has one of these devices.

Tracking or recovery system discounts – Several insurers offer vehicle system insurance discounts. These systems don't deter theft, instead, these devices allow a vehicle owner to find where their car is if a thief steals it. Two popular vehicle recovery systems are LoJack and OnStar. Car owners must pay an annual subscription to monitor and track automobiles.

Car Theft FAQs

Do I need comprehensive coverage?

The following formula can help you determine whether you need comprehensive insurance.

  1. Add your deductible and annual premium.

  2. Compare this amount to your car's current value.

  3. If your car's value is lower than this amount, you may not need comprehensive insurance.

Does car insurance cover items stolen from my car?

Comprehensive insurance only covers your stolen vehicle's value and any damages. To recover the value of your belongings, you must file a claim with your homeowners and renters insurance carrier.

Does car insurance cover catalytic converter theft?

According to the National Insurance Crime Bureau, thefts for catalytic converters have increased 293% from July 2020 to June 2021. If you have comprehensive coverage, your car insurance may pay for your stolen catalytic converter and any theft-related damages to your vehicle.

Does car insurance cover my stolen custom parts or equipment?

Some car insurance companies provide Custom Parts and Equipment (CPE) endorsement that covers alterations you've made to your vehicle. For instance, if a thief steals expensive custom rims from your vehicle, a CPE endorsement would replace them.

How much will I receive in a stolen car settlement?

Comprehensive insurance typically covers the actual cash value of your car, which includes depreciation. This amount is the maximum you'll receive. If your stolen car is recovered, comprehensive will only cover the cost of repairs.

Do I still have to pay off my loan if my car is stolen?

Lienholders still require owners to pay off their loan, even if their vehicle is stolen. Unfortunately, your car insurance settlement may not be enough to cover the remaining amount of your loan.

Guaranteed Asset Protection (Gap) Insurance covers the difference between your car insurer's settlement and the remaining amount you owe the lender.

Which Car Insurance Companies Offer Anti-Theft Discounts?

Here are several car insurance companies that offer anti-theft discounts, including:

  1. 21st Century
  2. AAA
  3. Allstate
  4. American Family
  5. Ameriprise
  6. Amica
  7. Country Financial
  8. Esurance
  9. Farmers
  10. Liberty Mutual
  11. MetLife
  12. Nationwide
  13. Safe Auto
  14. Safeco
  15. State Farm
  16. The General
  17. The Hanover
  18. The Hartford
  19. Travelers
  20. USAA

Get Affordable Auto Insurance to Protect Your Vehicle

As car thefts continue to increase throughout the county, buying comprehensive insurance may help you cover your vehicle if someone steals it. Comprehensive coverage also pays for vandalism damages if the car is recovered. Finally, homeowners insurance and renters insurance would cover any belongings stolen from the vehicle.

Your automobile may be one of your biggest assets so it's important to have the right level of protection. Consider shopping for better coverage at cheaper prices. SmartFinancial offers free auto insurance quotes from local insurers offering the best value policies. Enter your zip code below to get started.

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