Car theft is an unfortunate reality for many drivers, and it raises an important question: Does car insurance cover theft? The answer depends on the type of car insurance policy you have in place. In this guide, we’ll break down which auto policies cover theft, how filing a claim works, and steps you can take to help protect both your vehicle and your peace of mind.
Understanding Car Insurance
Depending on the coverage you select, car insurance can help protect against financial losses arising from accidents or other covered events. Most car owners have auto liability insurance, which is typically required by law in most states, to help cover liability in the event of an accident.
But does car insurance cover theft?
Does Car Insurance Cover Theft? Common Types of Car Insurance Coverages Explained
Car insurance policies generally consist of different forms of coverage, each intended to address distinct categories of risk or loss. Common types of car insurance include:
1. Auto Liability Coverage: Generally required by most states, this type of insurance covers claims alleging third party injury or property damage arising from an accident where the policyholder was at fault.
Auto liability insurance doesn’t cover theft.
2. Collision Coverage: This type of insurance covers claims arising from damage to your car resulting from a collision with another vehicle or object, such as a guardrail, tree, or building, regardless of fault. Auto collision insurance is not required by law in any state, but lenders often require collision (and comprehensive) coverage if you are leasing or financing your vehicle.
Collision insurance doesn’t cover theft.
3. Comprehensive Coverage: This type of insurance covers non-collision-related damages or losses, such as theft, vandalism, natural disasters, and other incidents such as contact with an animal. Many lenders require comprehensive coverage, in addition to liability coverage, if financing or leasing a car.
Comprehensive insurance is a type of coverage you should consider if you’re concerned about coverage for claims arising from theft.
Comprehensive Coverage: The Type of Car Insurance That Covers Theft
While the terms and conditions of a given policy may vary, comprehensive auto insurance typically includes coverage for car theft, among other non-collision-related losses. If your car suffers a covered loss, such as theft, a standard comprehensive auto insurance policy will typically reimburse you for the vehicle’s actual cash value (its market value at the time of loss, accounting for depreciation), up to your coverage limit, minus any applicable deductible. While less common, some auto insurance policies offer replacement cost coverage for an additional cost.
It’s important to understand the specifics of your policy to know exactly how your coverage will apply.
Does Car Insurance Cover Theft of Personal Belongings?
No, car insurance generally does not cover personal belongings stolen from your vehicle.
Personal belongings stolen from your car may be covered under a homeowners or renters insurance policy, rather than by auto insurance. Review your policy for specifics, especially for high-value items like jewelry or electronics.