Does liability insurance cover theft? 

Car insurance is the type of insurance coverage you need to protect your car from theft and damage. Insurance is nothing but a contract between you and the insurance company. In the contract, the insurance company covers losses and any financial liability against you and your car in exchange for premiums.

Car insurance covers your car for events like theft, damages, accidents, and natural disasters as well as medical expenses for you and any passengers involved in the car accident. 

According to Forbes, the USA experiences over 6 million car accidents yearly. According to the same data source, road accidents are one of the leading causes of death, accounting for over 38,000 deaths every year.

Types of car insurance

There are many types of car insurance coverage you should consider buying depending on your insurance needs. Your insurance choices will depend on factors like; how old is your car, and what is the cost of your car. 

Other considerations you will need to look at are, do you drive a sports car or not? what are the common insurable events in your locality, insurance prices, and rates, what are your state’s minimum required car insurance coverages and so many others?

The most basic car insurance coverages available are

• Liability car insurance coverage
• Comprehensive car insurance
• Collision insurance coverage
• Uninsured/underinsured motorist insurance coverage
• Gap insurance and many others.

What kinds of car insurance cover theft?

According to NICB Report Finds Vehicle Thefts, vehicle theft are on the rise across many areas in the USA. For instance, there were 932,329 vehicles stolen in 2021, a number that is 6% rise from the year 2020, and a 17% increase from 2019.

There are many insurable events you could choose for your car. Some of the events a car insurance policy may cover include fire, theft, collisions/accidents, liability, medical expenses, flood damage, hail storms damages, and many others. 

Car theft is an insurable event that is covered by comprehensive auto insurance coverage. If you need to cover the theft of your car contents or items, you may need to buy homeowners insurance or include the coverage in the comprehensive policy.

When Am I Entitled to Coverage for Car Theft Insurance?

If your car is stolen, you may be entitled to compensation through your comprehensive insurance coverage which you purchased in addition to the mandatory liability car insurance. 

To file a claim for theft of your car from your insurance company under comprehensive coverage, you must have purchased this policy and your car should have been stolen while it was still covered by the comprehensive policy. 

You must also show proof of your car theft by providing a police report. This means that you should have reported to the police the theft of your car immediately, and also informed your car insurance company.

How much will insurance pay for a stolen car?

If your car is stolen when it is covered by a comprehensive auto insurance policy, the insurance company will pay you the actual cash value of your car (ACV). The actual cash value of your car is the price of your car according to the current market.

The actual cash value of your car takes into account things like the general condition of your car, mileage, and age.

The amount of money you will get as compensation for your stolen car also depends on other specifics of your insurance coverage policy. For instance, some insurance policies provide a payment limit for your stolen car, while others have no limits.

You may also be asked to pay a deductible. A deductible is the amount of money you will pay out of your pocket before your receive a payout from the insurance company. The policyholder (driver) usually chooses the deductible he/she is comfortable paying in case of the occurrence of the covered event.

The average car insurance deductible that is favored by most drivers is $500. You are free to choose a lower or higher figure well knowing you will need to pay this deductible before the company steps in to pay the rest. Here is an explanation of the car insurance deductible.

It is also important to note that, the insurance company will still pay the actual cash value of your leased and financed car. The driver still needs to cover the difference between what you owe on the leased/financed car and its actual cash value, unless you purchased gap insurance. Here is an answer to what is gap insurance.

Does car insurance cover theft and vandalism?

I already highlighted all possible events that are insurable by auto insurance policies. For instance, comprehensive car insurance is a policy that covers natural disasters, vandalism, and theft. 

Comprehensive coverage rather than a liability or collision covers events that are not caused by collisions like fire, theft, hail damage vandalism, and many others.

If your car is stolen or vandalized while it is still covered by a comprehensive insurance policy, you may be entitled to compensation in form of reimbursement for repair costs, or a payout to replace your stolen car.

How to fill out a Police Report & Insurance Claim?

Every driver needs to call and inform the police about his/her car theft or any car crash. Thereafter, the driver will need to file a claim through the insurance company responsible for paying the settlement claim. 

Below are 2 steps you will need to follow to fill out the police report and insurance claim.

How to fill out a car accident police report after a car theft?

To fill a police report, do this after the theft of your car.

• Call and inform the police as soon as after the accident.
• Provide the police with information like the location of the accident, time, and any witnesses available.
• The police will ask for information like your car model, make, and license plate number.
• The police should provide you with a copy of the theft report which you will use to file for your claim settlement from the insurance company.

How to file an insurance claim after a car theft?

If your car is stolen and you decided to file an insurance claim, follow the following steps.

• Contact your insurance company immediately after the event.
• Provide the insurance company with your policy and number and police report.
• Your insurance company will ask you to explain the incident details, and may also ask you to provide receipts and any other documents to support your claim.
• The insurance company will review and determine if your claim is covered and then inform you of the next steps to follow to receive a payout.
• If your claim is approved, the insurance company will cut you a check to cover your repair costs or an amount to replace your stolen car.

Does full coverage cover theft?

Full coverage is the type of car insurance coverage policy that includes comprehensive coverage, collision coverage, and liability insurance policies.

The collision insurance coverage covers any damages to your car that are a result of a collision. It will also help you replace your car if it is totaled. 

If you caused an accident in which people are injured, or properties are damaged, your liability auto insurance will help to cover such liabilities. So, yes, full coverage covers car theft and other many events.

Does car insurance cover break-ins?

Though break-ins are best covered under homeowners’ policies, you have the option of covering break-ins by purchasing a car insurance policy.

Damages due to car break-ins are covered by a comprehensive auto policy which is an optional policy a driver needs to buy after the mandatory liability coverage.

It is also important to know that your comprehensive coverage depends on the terms of the policy. You should speak to your insurance broker or company to understand what your policy covers and other exclusions.

Does car insurance cover theft of items?

Yes, car insurance covers the theft of items in your car. Coverage for the theft of items in your is covered by a comprehensive insurance policy, which also covers all events that are not a result of a car collision accident.

To make claiming your stolen items easier, it is important to keep in a safe place a list of the items, their receipts, and their serial numbers. At the time of claim, you will be asked to provide proof of the stolen items.

Does Liability Insurance Cover Theft?

Here is an example to show how liability insurance works. Suppose drivers A and B were involved in a collision in which driver B is at-fault for the accident.

In the majority of states in the USA, both drivers A and B should carry liability insurance coverage as proof of financial responsibility towards other people that might be injured in the accident. 

Since driver B is at-fault for the accident, he/she is liable for the injuries and losses incurred by driver A. Therefore, the driver is entitled to damages he/she should receive from driver B, or from his insurance company.

To pay damages and other losses incurred by driver A, driver B will either pay from their own pockets or through his liability car insurance coverage if he/she has one. 

Liability does not cover the theft of your car. It only helps you to pay damages and losses incurred by others as a result of the accident you caused.

Conclusion.

Does liability insurance cover theft? The answer is no. Liability car insurance does not cover theft. The policy helps you to compensate other people you injured and whose property you damaged in your at-fault accident.

Only a comprehensive car insurance policy covers natural disasters and theft of your car.