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CAR Insurance

Hundreds of thousands of cars are stolen every year. Here's what to expect if yours is one of them.

Stolen car image

Your car is no longer where you left it. It’s just… gone. Which means that a million questions probably went through your mind all at once. Questions, like: “Does car insurance cover theft?” “How likely is it that I’ll get my stolen vehicle back in one piece?” “What happens when your car is stolen and recovered?” “What does insurance cover if your car is stolen?” “Is the thief going to think less of me because there’s so much clutter in the back seat? I really need to throw out those fast food wrappers once in awhile…”

Unfortunately, you don't have to live in one of the top cities for car-theft or own one of the most-stolen vehicle models to have your car snatched. Anybody with wheels is at risk.

More than 770,000 drivers have their cars stolen each year, according to the National Highway Traffic Safety Administration (NHTSA), costing Americans $6 billion a year and resulting in a stolen vehicle every 40.9 seconds.

So what to do if your car is stolen? Or if you think it has been?

Here’s our eight-point plan to enact when your car isn't where you expect it to be.

Ensure your vehicle is really stolen

You are stunned, of course. You are muttering and pacing, “My car was stolen. Someone stole my car. What the heck?”

You’re typing into your phone’s smart engine, “Does insurance cover stolen car?

Searching for lost car

You are also calling the police. Very fast.

But not so fast. Wait a second.

Before you panic too much, call 911 or study up on how to create a terrible hex for a car thief, you might want to save a little embarrassment and confirm your vehicle has actually been stolen.

Granted, time is of the essence, and so if you’re sure, whip out your phone (hopefully you didn’t leave it in the car) and call the police. But if there’s any doubt in your mind, rack your brain first and make sure you're standing exactly where you parked your vehicle. Are you on the right level of the parking garage, or possibly in the east parking lot while your car is in the west?

After all, you are not the first person to misplace a car.

If you're sure you're in the right spot, check for "no parking" signs or any other reason your vehicle may have been towed. Finally, confirm you have not been visited by the repo man. This is absolutely a possibility if you're behind on your payments.

If you're sure the car is actually gone, call the police.

What happens when I report my car stolen?

Call 911

As you would expect, once you call the police, they’ll come to wherever you are, and you’ll file a report with them. Give them a detailed description of the vehicle as well as the VIN and license plate number. The police will take down all relevant details, and then the search is on.

The big question you'll then have is -- will I ever see my stolen vehicle again? And: will the police judge me for my back seat? Seriously, there are a lot of fast food wrappers back there, and a couple empty bags of chips when I went on that road trip…

We’ll see what the authorities say about your back seat, but the odds of you seeing your stolen vehicle again are… eh. Not terrible, but not good either.

Progressive Insurance analyzed its auto insurance claims several years ago and found that roughly 46% of stolen cars were recovered nationwide. Recovery rates varied widely by state. If you live in Washington, with a 71% recovery rate, your chances are good. Not so much in Michigan (19%). The NHTSA cites slightly higher recover rates based on more recent data. It says 59% of stolen vehicles are recovered.

The police will add your vehicle information to state and national databases that will make it harder for the thieves to sell your vehicle.

But what happens if you file a comprehensive claim for your stolen car, buy a new one and then your old vehicle is found? Your car insurance company will own the recovered auto. The insurer may let you buy it back if you want, or it may salvage the car.

Track your car with GPS tracking device


New cars are loaded with technology. Many of them can help the police locate your vehicle. General Motors’ OnStar system or Toyota's Safety Connect are examples. Hyundai's Blue Link can help police locate the car and even reduce the engine power to slow it down.

Many new cars have similar features; check with the police to see if your vehicle can help you find it.

Some pay-as-you-drive car insurance plans – the kind that measure your mileage and driving behavior – include GPS tracking as a way to deliver roadside assistance or summon an ambulance. They can also help track a stolen car.

Others, like Progressive’s Snapshot, don’t use GPS at all.

Last, if you’ve bought an aftermarket tracking device, such as LoJack, this is where it pays off. Not only do car insurers reserve their biggest anti-theft discounts for devices that actively locate a stolen car, some manufacturers will refund the price of the device or even pay you a settlement if the car isn’t recovered.

What to do when your car is stolen

Phone call

Contact your insurer.

This should be your very next move after the police. "Call right after making the police report," advises Penny Gusner, consumer analyst with Insurance.com. "If you wait, it may look suspicious."

If your car is financed, as noted, notify your lender as well. It’s just a good idea, though, um, yeah, you’ll still have to make your payments. Sorry to tell you that, but theft doesn't affect what your bank is owed. That’s why lenders require that you purchase comprehensive and collision coverage. Your obligation to the financial institution ends only when the loan is repaid, whether you have a car in the driveway or not.

Even if you only carry liability, you should still call your insurance company, Gusner says, to protect yourself if the thief causes damages to other people or property with your vehicle. Typically, if you weren’t negligent, you’re not responsible for damage caused by the thief.

When you contact your insurer, have the following information handy:

  • Date and time of theft
  • Location of the vehicle
  • Location of all keys to the car
  • Title to the car
  • Names and contact information for anyone who had access to the vehicle
  • Detailed description of the car and its condition when it was stolen
  • Contact information for your financing company if the car is financed
  • Police report number

Does car insurance cover theft ?

What is a stolen car insurance payout? It depends. It could be a lot, or nothing at all.

Relieved manComprehensive coverage will pay to replace your vehicle. You will have to pay the deductible amount you chose, and then your insurance company will pay you the actual cash value of your car.

"Comprehensive is much, much cheaper to buy than liability or collision,” says Michelle Megna, editorial director at Insurance.com. "And it’s pretty much a catch-all for everything that happens to a car that’s not a collision: theft, vandalism, fire, even hitting a deer.”

Insurance.com's rate data show that the average driver’s yearly expenditure on comprehensive coverage is $192, though that amount varies by state and the value and theft record of the car insured.

Most insurance companies will sell you comprehensive coverage even if you don’t buy collision. “If I drove a theft-prone car like an older Honda, I’d call it money well-spent,” Megna says.

If you carry only liability, bad news: Recovery of the car is your only hope. There is no stolen car insurance payout.

Additionally, don’t expect a rental unless you’ve bought rental reimbursement coverage. Even then, you’re typically limited to no more than 30 days with daily limits of $25 to $30. So you’ll probably be replacing your stolen vehicle before too long, unless you want to drive around a rental indefinitely.

What happens when your car is stolen and recovered


If your stolen vehicle is found, immediately notify your insurer. Comprehensive will pay to repair your vehicle if the thieves managed to put in a few fresh dents. You would owe the deductible amount.

Most insurance companies have a waiting period of 30 days before declaring the car gone for good. After that point, your insurer will pay out the "fair market value" of your car – the price an identical car would bring on the open market. It’s somewhat negotiable if you can find comparable values.

Your deductible will come out of the settlement check, and so will anything owed to lienholders.

Most comprehensive claims won’t drive up your rates, Megna says. Unfortunately, any valuables left in your vehicle usually aren't covered. But your homeowners insurance might kick in.

Your car may be found after you settle the claim. If so, the car belongs to the insurance company.

And what happens if your car is stolen and never found? Well, pretty much nothing. You get paid by your insurer if you’re covered for a stolen vehicle. If you aren’t covered, your game plan will be to learn a lot of new curse words and work on developing that terrible hex.

Keep up the payments for stolen car insurance payout

Writing a check

You should keep making both your insurance and car payments until the case is resolved.

You’ll want to keep up your insurance payments for a couple of reasons.

First, if you intend to replace your car, a gap in coverage greater than 30 days will sharply increase the amount you can expect to pay for insurance. Some carriers won’t touch a driver not currently insured, Megna says.

Second, your personal insurance coverage typically covers you in a rented car as well. Otherwise, you might need to buy liability and collision coverage through the rental agency.

Last, until you suspend on the registration on the car, you are obligated in virtually every state to keep at least liability coverage on it.

Prepare for the third degree


Expect some tough questions if your claim appears even slightly suspicious. Don't take it personally.

Roughly $80 billion in fraudulent insurance claims (not just car insurance) are made every year, according to the Coalition Against Insurance Fraud. A fair number of car theft claims are what the industry calls “owner give-ups” – thefts made with the cooperation of the insured owner.

Investigators may look into your financial history, such as late payments, or your phone records and posts you may have made on social media. Adjusters will often record conversations, and at times it may feel like an interrogation.

Among the potential red flags for investigators:

  • The vehicle was recently put up for sale.
  • The vehicle is over mileage on a lease.
  • The driver’s license was recently suspended.
  • Recent increases in coverage.
  • Delinquent payments.
  • Police were not notified, or not notified immediately.

But here’s another red flag – not answering investigators’ questions.

So answer them as well as you can, and with any luck, they’ll find the miscreant who stole your car. And then you can stop asking questions like, “Does car insurance cover theft?” and “What happens when your car is stolen and recovered?” And instead, you can start asking questions like, “Thanks to my stolen car insurance payout, I wonder what color I want my next car to be?” Or: “Is there anything I can do to make sure I never have this happen again?”

And, of course, the answer is – make sure you have car theft insurance.

Having your vehicle stolen is a lousy thing to have to deal with, but if you have the right car insurance policy, it can be less lousy.