Does car insurance cover theft? It's complicated
There are lots of things that can happen when you own a car. That's why you should purchase insurance that best fits the type of vehicle you drive, your driving habits and your personal budget. Different types of car insurance covers everything from accidents to medical coverage for passengers. But what about theft? The following includes what you need to know regarding theft and car insurance.
What Type of Insurance Covers Theft?
To cover car theft, you need a comprehensive insurance policy. Other kinds of auto insurance - including liability, collision and personal injury protection - covers various types of damages related to car ownership, but none of them will cover theft. It's important to note that most states don't require comprehensive coverage. However, if you still owe money on the car almost all lenders will require it.
What Else Does Comprehensive Coverage Include?
Comprehensive coverage includes all sorts of non-driving-related car damage, such as denting from hail, a garage fire, or flood damage. If your car is stolen, comprehensive coverage also covers the cash value of your vehicle. Most comprehensive polices don't cover items inside of a car that may be stolen.
Comprehensive insurance can be more expensive than other types, depending on factors such as your age, driving record and the type of car you drive. There are a few things you can do to reduce the costs such as including an anti-theft device on your vehicle.
What Steps Should you Take to Cover Theft?
If your car is stolen and you have comprehensive car insurance, you need to make a claim. Whether or not your claim is approved depends on you taking the right steps after the incident occurs. The following are a few basic procedures you'll want to follow.
- As soon as you're aware the vehicle has been stolen it's necessary to file a police report. An insurance company will likely not process a claim for a stolen car without a police report.
- If you have a leased or financed car you'll need to contact the company or financial institution. You'll want to ask them to talk directly with your insurance company to expedite your claim as quickly as possible.
- If the police recover the stolen vehicle make sure to again inform your insurance company or any relevant financial institution.
It's important to note that some states do have laws in place regarding negligence. This could include leaving your car unlocked or running while you run a quick errand. If your car is stolen and an accident occurs you may in some cases have a claim filed against you personally for negligence.
Are Personal Items Covered?
In general, car insurance does not cover personal items such as a wallet, a laptop, or other loose items that may be inside of your car at any given time. According to Pocket Sense, personal property is usually defined as any items that aren't permanently part of the vehicle. Personal items are often covered under your homeowners policy or renters insurance. It would, however, be subject to whatever deductible you have in place.
Customized rims and a car stereo, even though they may be installed separately, are usually considered permanent parts of the car. It's important to note that not everything customized and added to a vehicle is automatically covered. For example, an adapter and a portable device such as an iPod will likely not be covered under car insurance. Extremely expensive items that have been added may require specialized insurance.
Why are Claims Sometimes Denied?
There are several instances when claims that are otherwise covered are eventually denied. Even if you have coverage that would cover theft it could be denied if it occurs under the following conditions:
- Often claims are denied if you don't report an incident in a timely manner. Each separate policy may have different time limits.
- If you've taken the vehicle outside of the United States, certain types of coverage may not apply.
- You'll likely receive a denial if someone has been driving the vehicle that is not listed on the policy.
- A car involved in any type of illegal activity will likely receive a denial.
How Do You Make Sure You're Covered for Theft?
As stated earlier, comprehensive insurance is the only type that covers theft. No matter how extensive your car insurance is, theft will not be covered unless you have a comprehensive policy. You'll need a homeowners or renters policy to cover the theft of items not considered part of the vehicle.
It's also important to remember that almost all comprehensive policies will have a deductible. It might be only $200 while other policies can be $500 or more. Normally, if you want to have a lower deductible you'll pay higher premiums. You might also want to purchase gap insurance. Gap insurance will normally pay the difference between the cash value of your vehicle and whatever you still owe. It's important to carry gap insurance if you still owe more on your car than the current value of the vehicle.
A claim is often denied in a variety of situations. To ensure you have coverage for theft it's necessary to carefully review your policy and talk with your insurance agent. Make sure to purchase the right car insurance so your vehicle, belongings, and all passengers are as protected as possible.