Does Car Insurance Cover Theft?

Discovering a thief has broken into your car or stolen your belongings can be a frightening experience. Once the shock wears off, you might think about filing a claim with your car insurance company. Car insurance does cover theft at times, but it depends on your policy.

Collision coverage or a basic liability-only policy doesn’t cover theft. But a comprehensive or full-coverage policy can cover your vehicle after a break-in. If you aren’t sure what to do, here are some steps to take after a car theft.

Which type of car insurance covers theft?

If a thief takes your vehicle, you need to know if your insurance policy covers the theft of your car.

“With full or comprehensive coverage, theft is a common coverage,” says Zach Lazzari, a licensed insurance agent in Montana and the owner of Cross Border Coverage, a provider for U.S. and Canadian drivers entering Mexico. He warns, “Liability-only policies do not offer theft coverage.”

Comprehensive coverage protects your vehicle against damage from non-collision events, like theft, glass and windshield damage, animal accidents, and weather-related events. If a burglar breaks into your car, the coverage can pay to repair broken door locks, smashed windows, and a damaged ignition system.

The cost of adding comprehensive insurance to your auto policy varies by provider. Insurify data scientists found Mile Auto to be the cheapest comprehensive insurance provider, at $107 per month on average.

Does auto insurance cover theft of personal items from your car?

Auto insurance does not cover the theft of personal items left in your car. But your homeowners insurance or renters insurance policy might. You’d file two separate claims if your vehicle is stolen: one with your auto insurance for your vehicle and one through your homeowners insurance for the stolen personal property within your vehicle.

Custom parts and equipment coverage

Adding custom parts and equipment coverage (CPE) to your policy can cover items the original car manufacturer didn’t install. For example, suppose a thief steals your spinners — spinning rims — or vandalizes a custom paint job on the side of your car while breaking in. Your CPE policy can pay to replace your custom wheels and fix your paint job. The cost to add CPE to your insurance policy is typically very minimal.

“Each carrier is a little different, but some include up to $1,000 of coverage for customized equipment,” says Dominic Frey, a licensed insurance agent in Ohio with Hitchings Insurance Agency. “To add additional coverage is around $10 to $15 a year per $1,000 of coverage.”

Gap insurance

Gap insurance covers the difference between the current market value of the vehicle and what you owe. It can be crucial coverage if you finance a car, as most cars lose 20% of their value within a year, according to the Insurance Information Institute.^[1]

For example, if a thief steals your car, your policy can cover the total loss up to the car’s current market value. But if it depreciates faster than you can pay down your loan, you could be left owing a significant balance to your auto lender.

“Gap coverage pays the lease or loan value remaining on a total loss,” Lazzari says. It’s relatively inexpensive coverage, costing about $20 per year on top of your annual insurance premium.

New car replacement coverage

Rather than giving you the depreciated value of your stolen car, a policy with new car replacement coverage reimburses you for a brand-new vehicle, not including your deductible. It usually limits coverage to the first year of ownership or 15,000 miles.

Adding new car replacement coverage to your policy typically costs around 5% of your total annual premium. However, it can be hard to find — a number of the nation’s largest auto insurers don’t offer it, including GEICO, Progressive, State Farm, and USAA.

Does rental car insurance cover theft?

Rental car insurance can cover theft, but only if your policy includes a rental coverage endorsement. 

“There are often daily limits for the amount of rental car coverage,” says Frey, “and the standard is to provide a rental car for 30 days.” Vehicle repairs or a new car purchase should be possible in that time frame.

What to do when your car is stolen

If you suspect a thief stole your car, your first step is to make sure it’s really missing. Police may have impounded or towed your vehicle if it was blocking traffic, a friend or family member may have moved the car without your knowledge, or perhaps you simply forgot where you parked.

Follow these steps if your car was stolen:

1. File a police report within 24 hours of the incident. The sooner you file, the faster the police can recover your vehicle.

2. File a claim with your auto insurance company. When you file a claim, you jump-start the process of receiving a payout to cover the cost of your missing car.

3. Post on social media. Share the news that your car was stolen, along with pictures of your vehicle, to get the word out. It could help recover your car faster.

4. Contact your homeowners or renters insurance provider. Car insurance doesn’t cover personal property taken from a vehicle. You’ll need to file a claim with your homeowners or renters insurance for missing items.

5. Notify your bank. Ask your bank to freeze your accounts to protect you from fraudulent charges if you had debit or credit cards in your vehicle when it was stolen.

How much is the payout amount for a stolen car?

“The payout depends on the policy and deductible,” Lazzari says. “First, the actual cash value (ACV) is determined.” A vehicle’s ACV is its replacement cost minus depreciation, which takes into account things like age and wear. “Then, the deductible is subtracted to determine the payout,” says Lazzari.

For example, if you own a Honda Accord worth $36,000 and your policy has a $1,000 deductible, your payout would be $35,000.

What happens if your stolen car is recovered?

In the U.S., the recovery rate for stolen vehicles is about 59%, according to the National Insurance Crime Bureau (NICB).^[2] If you find your car, don’t attempt recovery on your own. Instead, notify the police. If the police locate it, they’ll reach out to you or your insurance company to determine the next steps.

What happens from there depends on where you are in the claims process. If your claim is pending, your insurance company may choose to fix any damage. But the vehicle becomes the insurance company’s property if they’ve already paid your claim.

How to minimize the risk of car theft

Minimizing the risk of vehicle theft is your best defense against the cost and stress of having your car stolen. Here’s how:

1. Invest in anti-theft devices. These devices can stop thieves from getting past a car’s ignition system and activate a vehicle recovery system to help locate the vehicle.

2. Never leave your keys in your vehicle. Even if you’re leaving your car for only a few minutes, take your keys. Thieves can find them even if you “hide” them in your glove compartment.

3. Remove valuables from your vehicle. If you must take a high-dollar item with you, hide it in the trunk, under a seat, or out of sight of others.

4. Be mindful of where you park. Park in well-lit, highly visible places whenever possible. Avoiding unmonitored parking garages can also help reduce your risk of being a victim of theft.

5. Etch your VIN onto your windows. Having your VIN etched onto your windows makes resale difficult for thieves. Dealerships typically offer this service for a fee, but you can do it with the correct tools as well.

Car theft statistics 2021

A vehicle is stolen once every 42 seconds in the U.S., according to the NICB, and the recovery rate is about 59%.^[2] The Honda Civic, Honda Accord, and Ford and Chevrolet full-size pickups are among the most stolen vehicles in America. Some states and cities have higher theft rates than others. 

Find the top 10 states and cities with the most car theft in 2021 in the charts below.

10 states with the most car theft

10 cities with the most car theft

Car insurance theft coverage FAQs

Here are answers to some commonly asked questions about car insurance theft coverage.