“Does Liability Insurance Cover Theft?” raises a common question among individuals seeking clarity on what their auto insurance policies entail. In this inquiry, we will explore the nuances of liability insurance, its coverage limitations, and the need for additional coverage to protect against theft-related losses.
- Coverage for vehicle theft or break-in damage varies depending on your purchased insurance type.
- Comprehensive auto insurance commonly includes theft and vandalism coverage.
- Remember, car insurance usually doesn’t cover stolen personal property within the vehicle; check your homeowners or renters insurance for such coverage.
- In case of theft, promptly file both a police report and an insurance claim for a swift resolution.
Does Liability Insurance Cover Theft?
Regrettably, liability insurance won’t help if your car gets stolen or if things inside it are taken. This kind of insurance only pays for harm to other people and their stuff, not for theft or damage to your own vehicle. So, you can’t make a claim with your property damage liability coverage if your car is stolen or your belongings are stolen from inside it.
How Do Insurance Companies Define Theft?
Car theft isn’t just about stolen cars; it can also involve things like vandalism or damage from theft-related incidents. To get a clearer picture of what your insurance covers as theft, consider these scenarios:
In this situation, someone breaks into your vehicle but doesn’t actually steal it. They might damage your car by breaking a window or breaking a door lock while attempting to get inside. They could also harm your car’s ignition system by trying to start it without a key. Usually, you can have these damaged parts repaired or replaced at an auto repair shop.
Your car might be intentionally damaged or defaced by someone, like scratching it with a key, spray-painting graffiti, or slashing the tires. These deliberate actions are considered vandalism because they involve harming or disfiguring your vehicle on purpose.
Thieves sometimes take parts from cars to sell and make money, like valuable items such as catalytic converters. These converters are often overlooked because they’re part of the car’s exhaust system, but they play a crucial role in cleaning engine emissions. Unfortunately, there’s been an increase in catalytic converter theft in the United States. Make sure your insurance policy includes coverage for this kind of theft.
Theft of Personal Items
If your car gets stolen, and you had personal items like a cell phone or sports gear inside, car insurance typically won’t cover those losses. Usually, it’s your home insurance or renters insurance that would step in to replace your belongings, even if the stolen car is never found.
The most troubling form of car theft is when your vehicle is genuinely stolen. Picture this: You park your car in your usual spot on your residential street. The next day, you walk out to find shattered glass and an empty space where your car used to be. It’s been stolen. What’s your next step? Depending on your insurance coverage, your provider might assist you in replacing it.
Which Type of Insurance Covers Theft?
To safeguard yourself, your car, and your stuff from theft, it’s a good idea to explore additional insurance options. While liability insurance doesn’t cover theft, you can think about adding these kinds of coverage to your car insurance policy. You can also increase the limits or lower the deductible to receive more compensation in case something happens.
If your car is stolen, only comprehensive coverage will help. When you file a car theft claim, your insurance company will give you money for your car’s current value, minus your deductible. You can use this money to buy a new car. Even if the police find your stolen car, comprehensive coverage can assist in paying for any damage caused to your car during the theft.
Custom Parts and Equipment Coverage
If you’ve made changes to your car using special aftermarket or custom parts, you might want to safeguard them with custom parts and equipment (CPE) coverage. It’s essential to realize that most regular car insurance plans won’t pay for repairs or replacements of these modified parts. Nevertheless, you can consider adding CPE coverage to your existing policy, if your insurance company provides it. This way, your custom parts will be protected, even in case of theft.
Renters Insurance or Homeowners Insurance
Unfortunately, if your personal things get stolen, comprehensive car insurance won’t cover them. But if you have homeowners or renters insurance, these policies will pay to get your stolen things replaced.
For example, let’s say you left your laptop in your car overnight. When you wake up the next morning, you see a broken back window, and your laptop is gone. What should you do? You can tell your renters or homeowners insurance about it and they’ll give you money to replace it.
However, remember that insurance for personal stuff often has limits on how much they’ll pay for valuable things like electronics or jewelry.
What to Do If Someone Steals Your Car
Dealing with a stolen car can be very stressful. You might find it hard to remember what happened that day or what you had in your car. Here are some steps to get ready for this unfortunate situation:
1. File a Police Report
Before you call the police, take a moment to consider other possibilities. Was your car towed? Did you forget where you parked it? Did you owe money on it, and it got taken back by the lender? If none of these are true, and your car is indeed stolen, then call the police to report it.
It’s a good idea to find a safe place to make this call so you can think clearly and provide all the needed details for the report. Be ready to answer questions about your stolen car’s year, make, model, VIN (vehicle identification number), license plate numbers, and color.
The more information you can provide about what happened, the better the chances that the police will be able to recover your car. According to the National Insurance Crime Bureau, 35% of stolen cars are found on the same day, and 45% are recovered within two days.
2. File an Insurance Claim
After you talk to the police, get in touch with your car insurance company right away. Your insurance agent will likely need the details from the police report to start working on your claim. So they’ll figure out which type of coverage to use and what they need to do to compensate you for what you lost.
What happens next depends on whether the authorities find your car. If they do, but it’s damaged, your comprehensive insurance will pay for the repairs. If you never get your car back, this insurance will give you money to get a new one. Just remember, your insurer will pay for the repairs or replacement after taking out your insurance deductible from the payout amount.
3. Contact Your Auto Lender
If your stolen car was leased, you need to contact your lender right after getting in touch with your insurance company. Most likely, when you signed the lease, the lender made you get comprehensive coverage to protect the car. This coverage also helps the lender because they own the stolen car.
Let your leasing company know that your car was stolen and tell them to contact your insurance provider directly. They will work together to solve the problem. If your car had positive equity, your insurance coverage should take care of the rest of your lease amount, up to the car’s actual value, minus your deductible from your comprehensive coverage.
Have Professionals Inspect Your Recovered Car
If the police find your stolen car, you can start driving it again. But before you do, it’s a good idea to take your car to a trusted auto repair shop and have a professional check it carefully. You might see some obvious damage from the theft, like scratches, flat tires, or broken windows, but there could also be hidden problems, like a missing catalytic converter.
Once you get your car back, schedule an appointment at your local auto body shop as soon as possible. If you’re not sure where to go, ask your insurance agent for recommendations. The service technician at the repair shop will then contact your insurance company with a list of the repairs your car needs. If you have comprehensive coverage, your insurance will pay for these repairs, but you’ll have to cover your deductible.
For instance, let’s say the technician says it will cost $1,000 to fix your car. Your comprehensive insurance covers this cost, but you have a $250 deductible. So, your insurance company will subtract that $250 and pay the repair shop $750. You’ll be responsible for paying the remaining $250 to the repair shop.
Use Your Reimbursement Check to Buy a New Car
The worst thing that can happen with a stolen car is not getting it back. If you depend on your car to get to school or work, you’ll probably need a replacement. So that’s why having comprehensive insurance is really important.
Your insurance company will figure out how much your car was worth before it got stolen, considering things like its age and wear and tear. This value is called the actual cash value (ACV). Let’s say your car was worth $7,000, and you have a $500 deductible. Your insurer will send you a check for $6,500. You can use this money as a down payment on a new car or lease one temporarily.
5+ Tips How to Prevent Theft
While car theft can happen, it’s smart to take steps to protect yourself and your stuff. Here are some ways to prevent theft:
- Take out valuable items from your car that you don’t want to be stolen.
- Keep a record of receipts and take pictures of your most important things. This can help if you need to report stolen stuff later.
- Park your car in a well-lit place. Thieves are less likely to go for it if it’s easy to see.
- Make thieves think twice by adding anti-theft devices, like car alarms, to your vehicle.
- Hide a tracker somewhere on your car. If someone takes your car, you can work with the police to find it.
- Always close your windows completely when you leave your parked car. Don’t leave them open.
Does Car Insurance Cover Theft? FAQs
Does liability insurance cover theft?
No, liability insurance does not cover theft. It primarily covers the costs associated with injuries or damages you cause to others in an accident where you are at fault.
What does liability insurance cover?
Liability insurance covers bodily injury and property damage that you are legally responsible for if you cause an accident while driving. It does not cover your own vehicle or personal belongings in the event of theft or damage.
Do I need additional insurance for theft coverage?
Yes, if you want coverage for theft or damage to your vehicle, you would typically need to purchase comprehensive insurance, which is a separate type of coverage that covers various non-accident-related incidents, including theft.
Can I add theft coverage to my liability insurance policy?
No, you cannot add theft coverage directly to a liability insurance policy. You would need to purchase comprehensive coverage separately to protect your vehicle from theft.
What should I do if my car is stolen and I have liability insurance?
If your car is stolen and you only have liability insurance, you would need to rely on other sources of coverage, such as your homeowners or renters insurance, to cover the loss of personal belongings inside the vehicle. Liability insurance will not provide compensation for the stolen vehicle itself.
Does liability insurance cover theft? No, liability insurance does not cover theft. Liability insurance primarily covers bodily injury and property damage you may cause to others in an accident, not the theft of your own vehicle or personal belongings.