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CAR Insurance
CAR INSURANCE INSIGHTS

A vehicle is stolen every 43.8 seconds in America. Here’s what to do if yours is one of them.”

Your car is no longer where you left it. It’s just… gone.

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 a while…”

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 700,000 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 43.8 seconds.

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

Here’s our 10-point plan to enact when your car isn't where you expect it to be.

KEY TAKEAWAYS
  • More than 700,000 vehicles are reported stolen in the U.S. each year.
  • Report your stolen car to the police immediately and then notify your insurer, lender and DMV.
  • You are still responsible for making car payments on the stolen car.
  • Continue to pay for insurance coverage until the car is either recovered or considered a total loss by the insurer.
  • Take proper precautions to avoid making your car an easy target for theft.

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 search engine, “Does insurance cover stolen car?

Ensure your vehicle is really stolen

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.

Insurance.com managing editor, Ashlee Tilford learned that embarrassing lesson when on her first day of college she finished the day only to find her car had vanished.

"I couldn't believe my eyes. My car was just gone. A hundred things ran through my mind. Did I lock it? Did I leave a window cracked? How did someone steal it? I ended up at the campus police department to report my stolen car, only to discover my car had been towed due to illegal parking. Whoops."

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.

What to do if your car is stolen

What to do if your car is stolen

Report the stolen car to the police

Once you have confirmed that your car has been stolen, call the police immediately to report the theft. Not only will you need the police report later, but it will give law enforcement officers an opportunity to keep an eye out for the stolen vehicle. You will need to be prepared to provide them detailed information on the vehicle and the location it was last seen.

Contact your auto insurance company and lender

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 the 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

Inform the Department of Motor Vehicles (DMV)

The next important step is to notify the Department of Motor Vehicles. The DMV keeps a database of stolen vehicles. This database helps to ensure you don't have future ownership or title issues with the vehicle and is especially useful if someone tries to register the stolen vehicle.

Check for possible CCTV recordings

In this age of rapidly expanding technology, it is common for businesses of all kinds to have security cameras installed outside of their business. Let's put it this way, in most cities, someone somewhere is watching. This could be a parking lot or garage, street parking, or even parking near an ATM that has a camera. It is worth checking with any businesses near where you were parked to see if they might have captured the car thief on camera.

Track your car with a GPS tracking device

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 measures 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, but some manufacturers will also refund the price of the device or even pay you a settlement if the car isn’t recovered.

What happens when I report my car stolen?

Call 911

What happens next depends on whether your vehicle is recovered or not.

What happens if your car is stolen and never found?

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 of 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 recovery 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?

What happens when your car is stolen and then found?

What happens when your car is stolen and then found

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 insurance 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, like a cell phone or laptop, usually aren't covered. But your homeowner's insurance or renters insurance might kick in.

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

Does car insurance cover theft?

Relieved

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

Comprehensive 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, we have bad news: Recovery of the car is your only hope. There is no stolen car insurance payout.

Additionally, don’t expect a rental to be covered unless you’ve bought rental reimbursement coverage or your policy happens to include it. 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.

Keep up the insurance and loan payments for the stolen car

Check writing

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

You will also need to continue making payments to your lender for the car if you have a car loan.

Prepare for the third degree

Interrogation

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 stolen car 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.

How to reduce the chances of your car being stolen

Here are a few ways to discourage thieves from stealing your car:

  • Keep your car locked at all times.
  • Never leave your keys in the vehicle.
  • Make sure valuables are not visible in the car.
  • Do not leave the title in the vehicle.
  • Park in well-lit and well-known areas.
  • Install an anti-theft system in the vehicle.
  • Have the VIN etched in the vehicle's glass.
  • Track your car with a GPS tracking device.

Frequently asked questions

What should you do if you see a car that you suspect was stolen?

If you see a vehicle that you have reason to believe was stolen, report it to the local police.

What happens if your car is stolen and you still owe money?

Unfortunately, when your car is stolen you are still obligated to make payments on it. If your insurance claim payout is approved, you can use the claims check to pay against any amount owed. If the payout amount is less than the amount financed, it will be your responsibility to pay the difference. If you have gap insurance, check with your insurance agent to see if it will cover the difference.

How often are stolen cars found?

Statista reports that in 2019, 56.1% of stolen vehicles were recovered. However, that does not mean the recovered vehicles were not damaged.