Having your car stolen is one of the most frustrating, and potentially complicated, situations in which you'll need to deal with your insurance company. Not every auto insurance policy covers theft and those that do will wait for you to file a police report and see if your car can be recovered before consenting to pay you anything.
Auto insurance policies include theft in their comprehensive coverage. This is the same type of coverage that covers your car for vandalism, fire and weather damage. Comprehensive coverage is not a legal requirement, which means you must choose whether to purchase it. On an older car it might not be worth the cost, while a newer car with a higher value makes comprehensive insurance a financial necessity. The cost of comprehensive coverage depends in part on how likely your car is to be stolen, which factors in its make and model, the area where you live and whether you park indoors, on the street or in a secured lot.
If your car is stolen and not recovered, and you have comprehensive coverage, your insurance company will pay you based on the vehicle's depreciated value. This means that you'll get enough to buy a similar used vehicle. Insurance companies use used-car sales records, depreciation calculators and other sources of data to determine the vehicle's value. The value will also depend on the mileage, condition and optional features your car had when it was stolen. Your insurance will require you to pay your comprehensive deductible, which reduces the amount you'll receive by the deductible amount, usually between $500 and $1,000.
Paying for Damage
If your car is recovered, your comprehensive insurance will pay for any repairs it requires as a result of damage from the theft. Car thieves may remove parts for resale, damage the interior and electrical system to start the car without a key or crash the car before ultimately abandoning it. This damage can add up to a significant repair cost, and may render your vehicle unsafe to drive. As with an unrecovered vehicle, your comprehensive coverage will still require you to pay your deductible. If the cost of repair exceeds the value of the vehicle, your insurance may declare your car a total loss and pay you the same depreciated value as if it was never recovered, less the salvage value if you choose to keep the car to sell to a salvage dealer or repair on your own.
The decision of whether to buy comprehensive insurance coverage depends on how much your insurance company charges, what deductible you can afford and how much your vehicle is worth. If your car is an older model and you park indoors in a safe neighborhood, comprehensive coverage is unlikely to come in handy. The car that most needs comprehensive coverage is a newer model that you park outdoors in a neighborhood with a relatively high crime rate. In each case, the deductible you choose will affect not only how much you receive if your car is stolen but also the monthly or annual premium you pay for insurance.