Does car insurance cover theft?

If you have comprehensive coverage on your car insurance policy, it will cover theft.

Purchasing a car is one of our most crucial and thoughtful decisions. From choosing the right type, design, and model to selecting the color and accessories, car buyers take their own sweet time for research. Further, car buyers spend time assessing the type of car insurance the car requires.

Considering the number of insurance options available today, car buyers usually compare car insurance policies for the pricing, coverage, and benefits before making a decision. However, understanding the nuances of car insurance can be overwhelming, and the buyers might end up purchasing an incorrect insurance plan for their cars.

For example, a car owner might end up purchasing insurance that does not offer coverage against theft or natural calamities.

In this article, we will learn more about car insurance that covers theft.

What kind of insurance covers theft?

Comprehensive car insurance covers theft. This includes stolen cars, stolen parts, vehicle damage during thefts, and vandalism. Besides thefts, this type of car insurance protects vehicles against other risks, such as natural calamities, third-party liabilities, and man-made disasters.

In simple words, if you have comprehensive coverage on the auto insurance policy, it will provide the required car insurance coverage for the following situations.

1. If the car is stolen, it will aid you with a car replacement.

2. If certain parts of the car are stolen, you will receive replacements for those parts.

3. If the vehicle has been damaged from a break-in (for example, broken windows, damaged headlights, and more), you will receive compensation for the repairs.

However, comprehensive insurance does not offer any cover against theft of personal belongings that might have been stolen from the vehicle. This includes laptops, mobile phones, or any other valuables. In such cases, opt for additional electronic device insurance and home insurance to protect your personal belongings. Ensure that you read the terms and conditions thoroughly before making a purchase.

Remember, comprehensive coverage applies only to pre-installed car parts. If you have done some upgrades and modifications to your vehicle, they are not entitled to any comprehensive coverage.

Insure your vehicle with a comprehensive car insurance plan to protect it against theft.

What to do when your car is stolen?

Car theft can be a devasting experience. The moment you realize that your car is missing, it is ideal to think about the following situations and rule out the possibilities.

  • Did you park your vehicle in a no-parking zone? Was it towed away by the concerned authorities?
  • Did the car company take away your car on account of missing payments?

If your response to the above questions is a no, then it is likely that your car has been stolen.

Steps to Follow When Car is Stolen

Here is a short action plan you should follow.

  • File a police report immediately. The faster you file a police report, the quicker the police can start the search operations. There is a high possibility of finding the stolen car.
  • Give proper details about your vehicle, such as the license plate number, car’s vehicle identification number, car model, and make. If the car has any identification marks, such as dents or stickers, convey the same to the police.
  • Inform the police about the theft of personal property inside the car, if any.
  • Share the approximate details about the time and place of theft.
  • After filing the report, connect with the auto insurance company to start the claim process.
  • Submit all the required information about your car, the theft, and the police report. This will help the insurer to evaluate the claim and determine the payout.
  • Once the auto insurer verifies the documents and assesses the claim, it will be approved, and you will receive the stipulated insurance claim settlement amount.

How much will my stolen car payout be?

Every comprehensive car insurance has a coverage limit and a deductible. If your car is stolen, you will receive a maximum amount up to the actual cash value of the car on the said date, minus the deductible.

For example, let us consider your car has comprehensive coverage with a deductible of $1000, and the depreciated value of your car comes to $9000. In case of theft, the insurance company would provide you with a settlement of $8000. Thus, helping you replace the stolen vehicle.

If you are not satisfied with the insurance company’s settlement offer, you can contact the insurance adjuster and provide a counteroffer. Ensure you support this offer with relevant documents. This might help the insurance company reassess its valuation and settlement amount.

Does auto insurance cover stolen car parts?

Yes, comprehensive car insurance does cover stolen car parts. It reimburses the amount for the replacement of stolen car parts. Further, if the car parts suffer from any damages, then you will receive compensation for repairing those damages done to the car.

However, comprehensive coverage does not offer financial protection for custom parts or additional accessories installed in the car. Hence, you might have to purchase additional coverage for such parts.

It is always advisable to read the policy documents or talk to the insurance agent to understand the comprehensive coverage better.

What happens if my stolen car is recovered?

If your stolen vehicle has been recovered, inform the insurance company immediately. If there are any damages caused to the car, the insurance company would examine the car and assess the repair costs the settlement would cover.

However, if the car is recovered after the claim has been paid, the recovered car becomes the insurance company’s property. The insurance company might send their team to retrieve the car in such cases. If you are still interested in having the same car, you can speak to the insurance company and offer to buy it back.

Check with your insurance company about the procedure to buy back the car, as it may vary from one company to another.

Does car insurance cover the theft of personal items?

No, comprehensive car insurance does not cover the loss of personal property that was present inside the car at the time of theft.

If you want to cover the personal items, you might have to add personal possessions cover to your auto insurance.  This will ensure coverage for loss or damage of any personal property kept inside the car. You can also leverage renters insurance or homeowners insurance policies for coverage on stolen items if you have one.

For example, if your car got stolen and it had a laptop, this cover will compensate you for the loss of the laptop.

Are custom parts and equipment covered?

Just like personal property, a comprehensive car insurance policy does not offer cover for custom parts and equipment. You might have to opt for custom parts and equipment (CPE) coverage to your existing auto policy.

This add-on coverage will provide cover for the repair or replacement of additional devices or custom parts you have installed in the car. For example, if you have installed custom tires and your vehicle gets stolen, this add-on CPE insurance will reimburse you for the property damage.

Here is a short list of equipment and devices that are covered in the CPE insurance policy.

  • Car performance-related equipment
  • Anti-theft devices
  • Car tracking device
  • Customized paint
  • Custom tires and wheel covers
  • Various lighting fittings, such as fog lights, undercarriage lighting, tail lamps, and more
  • Devices like sound systems, television, and others

Gap coverage: For loan and lease payoffs

If your vehicle gets stolen while it is on loan or lease, the insurance company will reimburse you the car’s total value for settlement. However, it will not provide you with any compensation for the car loan or lease. In such cases, gap insurance can help.

Gap or guaranteed auto insurance protection offers car owners additional protection against losses that may arise when compensation does not cover the car’s financing or lease amount. In simple words, it covers the difference amount between the car’s value and your pending loan amount and helps pay the loan of your stolen vehicle faster.

Although having gap insurance is not mandatory, it is ideal to have one in the case if:

  • You have a car loan of five or more years
  • You have leased your car
  • Your car value depreciates faster than other vehicles. For instance, if you have an older car or a rental car.
  • You opted for heavy financing and paid a small amount for a car down payment.


Having comprehensive car insurance will provide you coverage in unfortunate events, such as auto theft, break-in, and vandalism. Choose the right auto insurance cover for your vehicle based on your requirements via proper research.

Our insurance experts at Insurance Geek can guide you in choosing the right insurance that offers the best coverage and protection for your car. We are ready to answer all your questions about comprehensive coverage, claim process, documentation, and other related information. Get in touch with us with your queries.