Does Comprehensive Insurance Cover Stolen Vehicle?

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Andrew Lee is insurance content writer and editor for Andrew holds a Bachelor's degree from Ryerson University and has extensive experience of writing content for financial websites. His expertise is especially strong in home and auto insurance.

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There are nearly 800,000 vehicles stolen in the US each year. Compared to vandalism or theft, a stolen car is a lot harder to reclaim. Let’s say your car is parked safely in the parking lot of a hotel – you then go outside the next morning and find out the car is missing. The first question you ask yourself is “Is my insurance going to cover this?”. This guide will show you what happens if your vehicle is stolen, how to file a claim, what happens if the police recover the vehicle and other important questions.

So, does comprehensive insurance cover stolen vehicles? Yes, comprehensive insurance covers stolen vehicles. If the vehicle is stolen and not recovered, the insurance company will reimburse you for the market value of your car. If the car is retrieved and damaged, the insurance company will cover the repairs necessary. Certain deductibles apply in both situations.

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Note: Certain types of car insurance might not cover car theft under a total loss policy – this depends on the auto insurance policy you have. In most cases, comprehensive insurance will also include vehicle theft including repairs for any recovered vehicles. If you only have liability insurance, this will NOT cover theft as it only covers you for legal expenses that result from a traffic accident.

Stolen Vehicles: Replacement Coverage

What happens if the car is stolen? Americans depend on their cars for the commute, picking up children, buying groceries, carrying out daily activities, etc. This is why insurance companies cover you for the rental car contract after your vehicle is stolen. If you have comprehensive insurance, you won’t have to pay for a rental out of pocket.

Consult your insurance agent to find out if the comprehensive vehicle insurance plan will also include coverage for rentals after a “total loss” event such as car theft. The insurance company pays for a rental equal to the car that was insured. For instance, if you have a Chevy sedan, they have to compensate you for a rental Chevy sedan until you cash out on your claim or recover the car.

Rental car coverage varies by state. Certain states have longer coverage than others. For instance, in Florida, you’ll be covered for up to 45 days which is the typical amount an insurance company needs to pay out on a vehicle theft claim. In states like Virginia, you may get up to 30 days. Consult your insurance agent to find out about the exact coverage.

Are Stolen Vehicles Covered by Car Insurance?

If you have a basic automotive insurance policy, vehicle theft should be covered at a total loss policy – meaning you get the full replacement value, similar to losing your car in a car accident. Vehicle theft is considered “non-collision” which means the insurance will pay regardless of whether the car is recovered.

The main difference between auto liability and comprehensive auto insurance is that comprehensive insurance is optional for car owners. If you own the car fully, the insurance company will not require comprehensive insurance as a mandatory policy. If you have a lease on a car, they will require collision and comprehensive policies together. Comprehensive insurance is the best way to ensure your car is insured in the event of theft.

Will You Get Full Replacement Value for the Car?

Yes. Insurance companies treat automotive claims on comprehensive insurance as a “total loss”. If the car is wrecked in a traffic accident and can’t be fixed anyone, this is a total loss event. The same applies to stolen vehicles and you receive a payout on the current market value of your car. Here’s the kicker: You only get paid for today’s market value, not the price you originally paid for the vehicle. This is called an “Actual Cash Value” (ACV) policy.

If you owe money on a car and you only get reimbursed for the current cash value of the car (and not the money you have left on the loan), this could place you in an unfortunate spot if the car is currently worth less than you owe.

Cars can depreciate by as much as 30% in the span of a year. There are certain plans that can help you get complete coverage in advance by insuring you for the original settlement amount and the remaining loan principal in the event of theft. Consider upgrading to gap insurance coverage if you’re on a lease.

What if the Police Recovers the Car?

What happens if the police manage to recover your car? Consult your insurance company if the car is recovered. The insurance company will send an adjuster who will estimate the damage and the cost of repairing that damage.

The company will then reimburse you for the damage done to the vehicle, excluding the deductible. You will still get paid the full cash value of the vehicle if the vehicle is deemed a total loss (unrepeatable) by the insurance adjuster. Less than 45% of all stolen vehicles in the US are recovered. The chance of finding your car is slim. Even though you may get your car back, it may not be worth repairing of there’s too much damage.

What happens if the insurance company pays you, but the vehicle is later recovered? In most cases, insurers wait for up to a month before they issue payment. This gives the police enough time to launch an investigation and find your vehicle. During this period, you’re covered for a rental. After the 30 days are up, you get paid the ACV amount on the car.

Pro Tip: Install tracing devices under your car with GPS trackers built in the vehicle security systems. This will significantly increase your chance of recovering the car. Certain car manufacturers can even remotely reduce the engine power on a stolen vehicle.

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