If your car is stolen does insurance pay?

Theft claims are covered under comprehensive coverage on your auto insurance policy. You will be reimbursed based on the Actual Cash Value of the stolen vehicle.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 25, 2021

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Things to Remember...

  • Policyholders must have comprehensive coverage for theft claims to be covered
  • Claims valuations are based on the vehicle’s fair market value at the time of the loss
  • Theft claims require a reasonable waiting period before insurer will issue claim payment
  • Cost of the damages must exceed your deductible before payout is issued
  • Theft claims are non-fault claims and don’t impact future premiums

Proactive car owners go to steep lengths to prevent their vehicles from being stolen by career criminals.

They roll up their windows, lock their doors, lock their vehicles in garages, activate their alarm systems and park in well-lit areas in public, but that doesn’t stop the savvy car thieves.

One of the most effective ways to protect yourself from the financial devastation that can follow a vehicle theft is to buy the appropriate type of auto insurance.

All vehicle owners are required to buy coverage, but the minimum requirements hardly protect you and don’t protect your own car.

You’ll need to add optional physical damage coverage before you’ll have any bit of peace of mind in knowing your policy will pay a theft claim.

If you’re not sure how your coverage will protect you if your vehicle is stolen, read this guide and find out exactly what your insurer will pay and what isn’t covered.

Once you’ve brushed up on the basics, you’ll be prepared to deal with a loss you may have never considered you’d have to deal with.

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What is the difference between coverage requirements and physical damage coverage?

When you buy a car for the first time, it’s only normal to feel bombarded with all of the paperwork you’re presented with.

High school students don’t really take classes that educate them on insurance products and misunderstandings can lead to claims denials.

It’s overwhelming, but you’ll need to really know how your coverage works before you build a policy that’s going to give you peace of mind.

No state requires a vehicle owner to purchase physical damage coverage options that will pay to repair or replace the listed auto.

Instead, state minimum auto insurance requirements are in place to protect third parties when the named insured or a listed driver is negligent for damages or injuries.

Required basic coverage options are as follows in a majority of states:

– Bodily Injury Liability (BI)

Pays for medical bills, lost wages, pain and suffering claims and funeral expenses when you or a driver is negligent for a crash that results in injury.

This coverage is written with a per person limit and a per accident limit.

– Property Damage Liability (PD)

Pays for the cost to repair or replace various types of real property which include: cars, recreational vehicles, trailers, lampposts, benches, street signs, homes, buildings and more.

This limit is written on a per accident basis.

– Uninsured Motorist (UM)

While not required in all states, a majority of states require policyholders to be offered coverage that pays for their medical bills and lost wages when they’re hit by an uninsured driver.


– Medical Payments or Personal Injury Protection

Another coverage that may or may not be required is medical payments. This pays for the policyholder’s medical bills regardless of fault when the injury occurred in a covered auto accident.

Now that you know which options are commonly required, you can see that none of this protects the car that you’re driving.

The only way to go about getting protection for your vehicle damages is to buy optional physical damage coverage through your auto carrier. Here’s a breakdown of the types of physical damage coverage that’s offered to policyholders:

– Comprehensive (Comp)

Pays to repair or replace the covered auto when it’s damaged due to fire, vandalism, wind, hail, flood, falling objects, explosion or stolen.

You must select a deductible for this option and may be required to have your vehicle inspected if you’re adding comp to an existing policy.

– Collision

Pays to repair or replace the vehicle if it’s damaged in a covered crash while being driven by a covered operator. This coverage also comes with a deductible.

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How a Vehicle is Valued Following a Theft Claim

If you carry comprehensive coverage, you’ll have peace of mind that your theft claim will be accepted and paid out as long as it’s found to be a legitimate claim.

While you do have this peace of mind, it’s extremely important to learn how your vehicle is valued before you’re dealing with a claims adjuster.

An insurance company won’t pay you the MSRP of your car because all cars depreciate.

Since depreciation plays a major role in a car’s value, the insurer agrees to pay you a reasonable amount of money to replace your car. In the world of auto insurance, this is referred to as the actual cash value or fair market value of the property.

Fair market value is paid only when you have a total loss. If a damage claim is filed, the company will instead pay up to the total loss threshold or market value for repairs depending on the state law.

What happens when the vehicle is not recovered?

When you file a claim, the insurer will ask for a police report and details about the last time you say your vehicle.

If your car isn’t recovered over a reasonable period of time, you will be dealing with a total loss claim.

In this scenario, the insurer will compare sales prices in the area to give you a check for the car’s value. Any deductible you have for comprehensive will be subtracted.

What is paid if the vehicle is recovered?

If the stolen car is recovered before the claim closes, the claim is treated as a damage claim. This means that the cost of repairs will be covered up to the threshold in the state.

If the repair costs exceed the threshold or market value, the claim will be treated as a total loss.

Companies will also pay for rental cars if you carry rental car coverage. Be sure to review your policy to see if you have the right optional coverages and a deductible that you can afford.

If you’re not happy with your policy or your rates, use an online comparison tool and see if you can find a better deal. Start comparing car insurance rates now by using our FREE quote tool below!

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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