Does Car Insurance Cover Theft?

It is possible for car insurance to cover theft, but it has to be the right kind of insurance. Here are a series of scenarios.

When it comes to an auto policy, theft is theft. So the answer is yes, but it’s not quite a blanket “yes.”

The only way theft would not be covered under this plan is if it could be proven that the policyholder was somehow involved in the theft of the vehicle. That’s straight-up fraud. Typical things that comprehensive insurance covers include “Missiles, falling objects, theft, larceny, wind storm (sandblast), contact with bird or animal, mischief, fire, explosion, earthquake. These generally constitute your typical “Act of God” scenarios. It’s important to note that this comprehensive level of coverage is above and beyond your basic liability insurance.

What happens when your car is broken into?

So you walk out to your car in the morning, and your car is still there, but the window is broken. Maybe you own a vehicle with a manual transmission and the thieves couldn’t drive stick, so they went after your belongings instead.

Once again, things get tricky. It depends what those things were, where they were located in the car, and how they were used by the owner.

If you had valuables in the car, such as cell phones, CDs, a purse, etc., these items are covered under the personal property section of your homeowners insurance, condo insurance, or renters insurance.

But say you have an advanced digital camera with multiple lenses (which can get quite expensive), and they are stolen from your trunk. If it turns out you use that equipment for work-related purposes, they would be covered under a commercial property policy or a special scheduled policy. Once again – special cases require a special insurance policy.

What if you have installed aftermarket parts and they are stolen?

One of the great things about car ownership is the ability to customize and personalize your ride. From specialty sound equipment to aftermarket wheels and engine upgrades, there are seemingly endless ways to modify your vehicle. But just because these parts are now on your car, it doesn’t mean they are covered together under the same policy.

Your standard stereo is covered under the auto policy if it is stolen in the middle of the night. And even many aftermarket units are covered.

The rationale is that, in theory, most late-model cars have sophisticated stereo systems, and even the aftermarket units are on-par with the stock ones.

But if you are using an adapter connected to a portable music device, like an old iPod, that’s covered under homeowners insurance.

The only way to recover the value of the wheels is if you contact the auto insurance company to write special coverage. Otherwise, you will only be compensated for the value of the stock wheels and tires.

Collision coverage

Collision coverage pays for repairs if your car is damaged during a car accident or if it collides with another object like a building or tree, even if you’re at fault. It may also cover damage from potholes.