Yes, auto insurance covers theft in case you have a comprehensive insurance policy or a third-party, fire and theft (TPFT) policy. This kind of coverage compensates the real cash value of your car when stolen and unrecovered, less your deductible. Car theft is also a major threat in the US. The National Insurance Crime Bureau (NICB) reported that vehicle thefts increased by 1.1 percent in 2023. The theft risk varies based on the place and vehicle type. Theft coverage in auto insurance varies depending on the coverage in the policy. Theft is not included in standard liability policies because they only cover damage to other parties. Extensive coverage offers protection against theft of vehicles. It is an optional cover that covers non-collision losses such as theft, vandalism, and natural disasters. The insurance companies will not process a theft claim without a police report. In 2024, the NICB reported that vehicle thefts had risen more than 16.7 percent from 2022 to 2023, and some vehicle models had higher theft rates. Coverage specifications and deductibles differ depending on the insurance company.

What Type of Auto Insurance Covers Theft?

Here are the two types of auto insurance and their relationship to theft:
  1. Comprehensive Coverage: This policy covers financial losses that are not based on a collision. This involves theft, vandalism, and natural disaster destruction. Comprehensive also covers the repair cost of the vehicle in case of an attempted theft or break-in.
  2. Liability Insurance: Liability insurance is a simple insurance as mandated by the law in most locations. It covers you against financial loss in case you cause an accident. It covers damages and injuries to other individuals. Liability insurance does not cover your car.

What Theft-Related Losses Are Covered?

Here are six theft-related losses a comprehensive policy covers:
  1. Stolen Vehicle: Comprehensive coverage covers the total vehicle in case of theft and non-recovery. The insurance company provides the actual cash value of the car as of the time of the theft, less your deductible. Such a policy secures your financial investment.
  2. Stolen Parts: Comprehensive policy covers the theft of vehicle parts. These can be wheels, tires or even the catalytic converter. It covers the repair cost or replacing these stolen objects.
  3. Theft Damage: This insurance covers losses a thief inflicts when robbing your car. These can be an example of a broken door lock, a broken window, or a broken steering column. These repairs are covered under comprehensive coverage.
  4. Towing After Theft: When your car is stolen and recovered but not in a secure place, this policy takes care of towing. It covers towing of the car to a repair garage or to your house. This is the coverage that guarantees the safe delivery of your car.
  5. Vandalism with Theft: Comprehensive cover covers vandalism that occurs during a theft. This involves spray paint or mirrors that are broken. These damages are included in the policy for repairing them. It gets your car back to its original state before theft.
  6. Replacement Rental: This is an optional coverage to your comprehensive policy. It covers the rental car when your stolen vehicle is not recovered. The insurance firm covers the rental over a given duration or until your claim has been paid.

What to Do If Your Car Is Stolen?

Here are the four main steps to follow immediately after your car is stolen:
  1. File a Police Report: Report the theft to the police immediately. Give them information on your car, such as make, model, license plate no, and VIN. The police report is a document that is mandatory for your insurance claim.
  2. Notify Your Insurer: Immediately after making the police report, talk with your insurance company. Provide them with the number of the police report and the details of the theft. A rapid report accelerates the process of claims.
  3. Submit Required Documents: The insurance company needs certain documents to handle the claim. These are the police report, title to your vehicle, and ownership evidence. Give all required documentation on time to claim easily.
  4. Wait for Claim Review: The insurance company examines your claim and investigates your theft. The procedure requires a waiting time, since a car is usually retrieved. In case that the vehicle is not recovered, the insurer pays the actual cash value.

How to Prevent Car Theft and Lower Insurance Risk?

Here are three methods to protect your car and reduce theft-related insurance risk:
  1. Install Anti-Theft Devices: Anti-theft devices help to make your car unattractive to thieves. These can be car alarms, steering wheel locks or kill switches. Many insurance companies offer discounts on vehicles with such security features.
  2. Park in Safe Areas: Parking at a well-lit and safe spot reduces the possibilities of theft. A garage or a driveway is more secure than a street. Parked cars in dark or lonely areas are likely the target of thieves.
  3. Do Not Keep Valuables in View: Do not leave personal belongings such as phones, laptops or bags in your cars. These are the things that thieves are drawn to and thus it is better to leave them out of sight or carry them along.

When Should You Review Your Theft Coverage?

Here are three key moments to check and update your theft protection:
  1. Buying a New or Expensive Car: A new or luxury car has a high value and thus is a target of thieves. Check on your overall coverage to verify whether the policy covers the entire price of the car. This is to protect your major investment.
  2. Moving to a High-Theft Area: When you relocate to a place with a high crime rate, the risk of theft is high. Reconsider your coverage to make sure it is suitable in your new location. Depending on the new risk, the insurance premium can vary.
  3. Policy Renewal: Check your policy annually on renewal. Ensure that you have the right coverage limits and deductibles. Check for new discounts. Regular review keeps your policy updated.