Will My Insurance Policy Cover Me if My Car Is Broken Into? It Can, Learn How To Check
SmartFinancial Offers Unbiased, Fact-based Information. Our fact-checked articles are intended to educate insurance shoppers so they can make the right buying decisions. Learn More
Car insurance covers auto theft as long as your policy includes comprehensive coverage. Without comprehensive coverage, your insurance policy will not cover you if your car is broken into or stolen, meaning you will have to pay for repairs or a replacement vehicle out of pocket. Your car insurance also won’t cover items that were stolen from your car, although a standard homeowners or renters policy typically will.
Read below to learn how auto insurance deals with theft and related incidents, and what you should do if your car is ever stolen.
How Do Insurance Companies Cover Car Theft?
While insurance companies generally do cover car theft, not all associated losses will be covered by your car insurance policy. In fact, some losses will not be covered by insurance at all unless you upgrade your policy to include extra coverage.
Theft is one of the perils covered by comprehensive insurance, along with vandalism, fire, falling objects and more. Comprehensive coverage also accounts for damages an intruder causes in the process of stealing or otherwise breaking into your car. For example, your comprehensive coverage would kick in to help pay for a broken window or a picked car lock after an attempted break-in.
ACV means they will take depreciation factors like age or wear and tear into account to determine the value of the lost vehicle rather than simply paying you whatever it would cost to buy a new car. Your insurance company could instead pay out your loss at the car’s replacement cost value (RCV) if you are willing to pay a higher premium. For example, Allstate lets you add optional replacement cost coverage for cars that are less than two years old.
Meanwhile, your deductible is the amount you have to pay toward any covered loss before your insurance company will start to contribute.
Your auto insurance will not cover items stolen from your car, but your homeowners, renters or condo insurance most likely will. If you have off-premises coverage, a standard homeowners policy insures your belongings against named perils like theft even if those belongings are not inside of your primary residence.
So, if your car was stolen while your cell phone and laptop were inside, you would need to file a claim with your home insurance to be reimbursed for those items, rather than your car insurance. Usually, the limit for your off-premises coverage will be 10% of your overall personal property coverage limit.
Car Modifications, Add-Ons or Upgrades
When calculating the ACV of your vehicle after it is stolen, your insurance company may not account for expensive modifications like a high-end sound system or a custom paint job. You typically need to purchase a car insurance add-on called custom parts and equipment coverage to ensure you will be reimbursed if these upgrades are ever damaged or lost.
Loans and Lease Payoffs
Comprehensive insurance will not pay off your outstanding loan if your car is totaled but gap insurance might if you have purchased it. While you could put your comprehensive insurance payout toward paying off the loan, it’s possible that there would still be a remaining balance you would have to pay out of pocket.
This is where gap insurance steps in. Usually required if you made a small down payment on your car, gap insurance covers the difference if the value of your vehicle is less than what you currently owe on your loan. For example, if your car is stolen and you receive $10,000 through your comprehensive insurance, but you still owe $12,000 on your auto loan, gap insurance would take care of the remaining $2,000.
What Types of Car Insurance Policies Cover Theft?
Comprehensive coverage is the only type of car insurance that directly covers theft of your vehicle. Liability insurance doesn’t cover theft, even though it is the coverage type required by most states. However, a full coverage policy should cover theft, since full coverage typically includes the minimum state requirements plus comprehensive and collision coverage.
In fact, nearly 80% of insured drivers in 2019 had a policy that included comprehensive coverage. As a result, it is more likely than not that your auto insurance does cover theft. You can check if you have comprehensive coverage by reviewing your auto policy's declaration page.
As previously mentioned, gap insurance and the off-premises personal property coverage portion of your homeowners insurance policy may also be relevant if your car is stolen. In addition, rental car reimbursement could be a useful endorsement to add to your car insurance policy in case you need to temporarily rent a car while you wait for the police to search for your lost vehicle.
What Should I Do if My Car Is Stolen?
Once you have confirmed that your car has been stolen, you should take the following steps:
- Prepare information about your car, such as the vehicle identification number (VIN), license plate number and other identifying characteristics.
- Contact law enforcement and file a police report so they can begin searching for your car.
- File a car insurance claim.
- If necessary, file a homeowners insurance claim to cover items that were inside of your car.
- If necessary, contact your bank or other relevant institutions to lock an account, request new documents, cancel credit cards, etc.
If the police recover your vehicle before your insurance company has offered you a settlement, your insurer may still reimburse you for any damages your car incurred during the theft. Conversely, if the police recover your vehicle after your insurer has already paid you the car’s ACV, then the insurance company will likely take ownership of the vehicle.
Which Car Insurance Companies Offer Anti-Theft Discounts?
Numerous insurance companies offer discounted premiums for cars with anti-theft devices, including Allstate, Farmers, Nationwide, Safeco, State Farm and USAA, with the availability of some discounts depending on the state you live in.
In addition, insurance companies in the following states are required to offer comprehensive coverage discounts to drivers with anti-theft devices:
- New Mexico
- New York
- Rhode Island
In general, insurers in these states will offer you a 15% to 20% discount if your car has a passive alarm, which is an anti-theft device that automatically activates whenever you remove the key from the ignition.
How Can I Prevent My Car From Being Stolen and Broken Into?
You can take the following precautions to lower the odds that your car will be stolen or broken into:
- Install an audible car alarm, a visible anti-theft device (steering wheel lock, window etching, etc.), an immobilizer system that can deactivate your car if necessary and a tracking system to help the police locate your stolen vehicle if necessary
- Be aware of your surroundings any time you leave your car
- Park your car in a garage or well-lit area
- Makes sure there are no valuable items clearly visible within your car (i.e. leave them at home or store them in your trunk)
- Lock your car doors and close the windows
- Remove keys from your car and make sure there aren’t any spare keys nearby