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Protect what's yours: Car insurance and auto theft

Here's what you need to know about the different types of auto policies, what's covered under each, and how you can help keep your car safe from unwelcome people.

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Car theft is a situation no one wants to deal with. Not only is it a hassle to report and recover or replace your vehicle, but it can also leave you feeling anxious and vulnerable. Fortunately, if you have comprehensive coverage, you won't have to bear the full financial impact alone.

How protective is your policy? Here's what you need to know about the different types of auto policies, what's covered under each, and how you can help keep your car safe from unwelcome people.

What type of auto insurance covers theft?

When it comes to car insurance, there are three main types of coverage: collision, liability and comprehensive. But comprehensive is the only one that will cover theft.

  • Collision coverage helps pay for damage to your vehicle from accidents related to driving, no matter who's at fault.
  • Liability coverage helps pay for the other person's expenses if you cause an accident.
  • Comprehensive coverage helps pay for damage to your vehicle from other events, such as fire, glass damage and theft.

When you purchase car insurance, you have some flexibility to choose which types of coverage you want and how much. Most states require liability insurance, but if you finance or lease your vehicle, your lender will probably require you to carry comprehensive coverage and collision coverage as well.

Break-ins, attempted theft and vandalism

When someone breaks into your car — whether their intent is to steal the vehicle itself or just the valuables locked inside — they can cause serious damage such as smashed windows, picked locks, scratched paint or a broken ignition.

If your vehicle is damaged as a result of a break-in, attempted theft or vandalism, comprehensive auto insurance can help pay for repairs.

Will my car insurance cover stolen parts, too?

Sometimes rather than stealing the entire car, a thief will only remove certain parts with the intent of reselling them. Radios, GPS devices and speakers are frequent targets, but things like rims and tires, truck tailgates, catalytic converters, and even third-row SUV seats can be stolen, too.

In some cases, a thief will steal a car, take it to another location where they can remove the desired parts discreetly, and abandon it elsewhere.

So will your comprehensive insurance cover it?

The short answer is yes. But generally speaking, a comprehensive auto policy only covers car parts that are permanent or preinstalled features. Easily removed items such as premium stereos, portable GPS devices or DVD players aren't typically covered.

What about other custom equipment or aftermarket upgrades? Ultimately, it depends on the specific terms of your auto policy. Certain custom parts may be covered, such as anti-theft devices or disability equipment, but many insurers place a limit on the value of other upgrades you make to your car.

If your car is a restored or modified collectors vehicle, it may qualify for classic car insurance, which is a special type of auto insurance that recognizes the collector's value.

What if personal items are stolen from my car?

Personal property in your car, such as cell phones, laptops, textbooks or tools, aren't usually covered by your auto insurance policy in the event of a break-in. But the good news is, your homeowners or renters policy may cover those items, even if the car wasn't on your property at the time of the theft.

If your car is stolen with valuable personal property inside, you'll need to file two claims: an auto insurance claim for the vehicle itself and a homeowners or renters insurance claim for your personal items.

Keep in mind that there are a number of other possible targeted items as well: your car registration, license plate or DMV tags, house keys, and garage door openers. With some of these items, a thief could easily gain entrance to your home and commit further crimes.

What to do if your car is stolen or vandalized

Over 1 million vehicles were stolen in 2022, according to the Insurance Information Institute Opens in a New Window.‍ ‍ See note 1 The top five most frequently stolen vehicles were Chevrolet and Ford pickups, Honda Civic and Accord, and the Toyota Camry.

Vehicle thefts last year were 7% greater than the prior year with significant growth in Illinois and Washington and most taking place in California and Texas. Auto theft can happen anywhere. The statistics highlight the frequency of auto crimes — and the need to protect your vehicle.

It's important to take action quickly if your car is stolen or vandalized. This will increase the odds of recovering your stolen vehicle and get your claims processed faster. Here are the immediate steps you need to take:

  1. Do a double check. Before you jump to conclusions, rule out other possible explanations. Was it parked illegally and towed? Was it impounded or repossessed? Did a friend or family member borrow it?
  2. Call the police and file a report. You'll need to provide basic information like the car's make and model, license plate number, and vehicle identification number or VIN. If your car was vandalized or broken into, you'll need to compile a list of stolen items and take pictures to document any vehicle damage.
  3. Contact your insurance agent. Confirm that you have comprehensive coverage on your vehicle, and see if any personal items are covered by your homeowners or renters policy.
  4. File your claim. You'll need to file a car theft claim for the stolen vehicle and a homeowners or renters claim for any valuables inside.
  5. Call your bank. If any debit or credit cards were in your car at the time of the theft, contact your bank promptly to freeze your account. This will help you prevent fraudulent charges as well as identity theft.

What happens with a car theft claim?

If your car isn't recovered after being stolen, your insurance company will provide a payout to help you replace your vehicle. How much money you receive will depend on your vehicle's value, the size of your comprehensive coverage deductible, and any coverage limits, such as those for custom upgrades.

For example, let's say your car has a depreciated value of $14,000 and your deductible is $1,000. If your vehicle is stolen, your insurance company will give you $13,000 — the value of your car, minus your deductible.

But what if you have an auto loan on your car? In this case, your insurer would submit the payment to your loan provider. You can put any difference between the insurance settlement value and your loan balance toward a new car.

This is where other financial products, like Guaranteed Asset Protection insurance, can help. GAP insurance is often offered by your lender or at the dealership you purchased your vehicle from. It helps offset the cost of replacing your vehicle if you owe more than its value. This insurance typically offers a limited benefit or cash amount to you during a loss of your vehicle. Unfortunately, GAP isn't always available after your loan is finalized.

Prevent your car from being stolen

By making your car a less appealing target — that is, easy to see and harder to steal — you may be able to prevent your car from being stolen or vandalized in the first place. Here are a few simple things you can do:

  • Never leave your keys inside your car when it's unattended, and don't leave it running.
  • Don't leave your house keys or garage door opener inside the car.
  • Always lock your car, even while driving.
  • If you park your car outside at night, park it in a well-lit area.
  • Keep valuables out of sight from passersby. If possible, lock them in the glovebox or trunk.
  • Don't keep your vehicle title in the car.
  • Install an anti-theft, vehicle immobilizer or tracking system. In addition to deterring thieves, you may even get a discount on your auto insurance.

Of course, it's not always possible to prevent crime from happening. Fortunately, with comprehensive auto insurance, you can make it easier to recover financially after a car theft.

Insuring your vehicle

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