Car insurance policies are designed to protect the vehicle and the policyholder from a range of accidents. Unfortunately, car insurance won’t cover everything. While most car insurance policies include theft coverage, there are certain exceptions.
When It’s Covered
Most car insurance policies include comprehensive coverage, which is an optional coverage for your vehicle. Comprehensive coverage provides the policyholder with compensation for damages to or loss of the vehicle due to fire, wind, hail, lightning, falling objects, vandalism and theft.
The driver’s own liability insurance should provide compensation for damages they cause while operating the vehicle. So long as a police report is filed and the insurance agency is notified, any damages the thief causes while operating the stolen vehicle should fall on the thief’s shoulders rather than the car owner’s.
When It Isn’t Covered
In some cases, drivers may not have comprehensive coverage on their vehicle. This optional insurance is usually omitted when drivers want to save money on an older vehicle whose value is less than the cost of insurance. If a vehicle does not have comprehensive coverage, the stolen vehicle will not be replaced or covered.
Another reason an act of theft may not be covered is in the case of excluded drivers. Drivers can add other people to their policy as permitted or approved drivers, but they can also name those who are not allowed to drive the vehicle. These are excluded drivers and are not covered under insurance if they use the vehicle with the owner’s permission. If an excluded driver steals the vehicle without permission, however, the vehicle should still be covered. In some cases, an insurance agency may require the car owner to name a certain person on their policy as an excluded driver. This usually occurs when the car owner lives with or is related to someone with a poor driving record or previous violations.
How Vehicle Theft Coverage Works
When you file a theft claim on your car insurance policy, an underwriter from the insurance agency will investigate the claim to approve its validity (that the car was actually stolen and that it was not excluded) and to determine how much compensation the policyholder will receive.
Comprehensive coverage policies regarding theft offer actual cash value compensation. This means that if a vehicle is stolen and unable to be recovered, the car owner will receive the cash value of the vehicle, which accounts for depreciation. Depreciation occurs as the value of the vehicle slowly goes down over time, which means the amount of compensation the car owner will receive also goes down.
Remember to file a police report as soon as the vehicle is confirmed stolen and contact your insurance agent.
What Happens if the Vehicle is Recovered?
In some cases, a vehicle may be recovered after a claim is filed and compensated. If the vehicle is no longer able to operate, the owner may keep the compensation or vehicle they received. On the other hand, if the policyholder decides to take the original car back, the insurance agency may claim the compensation or vehicle paid for by the compensation provided. Every situation is different, so it’s important to keep your car insurance provider updated when it comes to vehicle theft.
How Much is Comprehensive Coverage?
Comprehensive coverage is generally bought alongside collision coverage as a larger car insurance policy. Car insurance premiums vary depending on the value of the vehicle, location, driving record and credit score of the insured, and more. On its own, comprehensive coverage costs about $136 a year, which is less than $12 a month.
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