What Is Auto Theft Insurance, And How Much Does It Cost?

If your car is stolen or totaled, auto theft insurance can help you replace it. Auto theft insurance is part of comprehensive coverage, which protects you from damage to your car that’s not caused by a collision. It helps pay for replacing or repairing the vehicle in case of theft or damage. 

How much does auto theft insurance cost?

On average, comprehensive insurance costs $860 per year. However, deductibles for comprehensive insurance vary depending on the underwriter, with industry leaders https://www.directasia.com/car-insurance having more affordable rates. If you need a lower deductible for your comprehensive coverage, you should discuss your options with your insurer.

As with any other car insurance, you could get discounts on your auto theft coverage if:

  • You are part of a certain automobile association
  • You have multiple policies with the same insurer (called a multi-policy discount)
  • Your vehicle has anti-theft devices such as an alarm system or GPS tracking device installed

How much auto theft insurance coverage do I need?

Being able to replace your car is crucial if your vehicle is stolen, but you also don’t want to overspend. Since the average car cost is $106,000 and most people have vehicles older than seven years old, it’s safe to say that most people need around $5,500 in coverage. However, if you have a car loan or lease and owe more than this on your vehicle, you’ll want to make sure your auto theft insurance coverage meets these amounts. If you own your vehicle outright with no loan or lease obligation, then the coverage you choose can be based on what would reasonably be needed for replacement.

Auto theft insurance vs. comprehensive coverage

Auto theft insurance is a type of coverage that may come standard with your car insurance policy. And you can always add it as an option to your existing auto policy or get a separate auto theft insurance policy. Comprehensive coverage will cover you for more than just auto theft. For example, you might have comprehensive coverage if your car was damaged by fire, flood, storm, or even a falling tree. It can also cover other losses like vandalism, animal damage, and windshield repairs. Comprehensive insurance typically has a deductible to keep your overall costs low. Still, it does not pay out on partial losses, so if your vehicle is recovered after being stolen, but there’s been some damage done, you won’t be covered for the repairs.

Filing an auto theft insurance claim

Being a victim of auto theft is no fun, especially when dealing with the insurance company on a technical level and fighting to get your money. Unfortunately, the odds are stacked against you because auto theft insurance companies have been known to delay compensations for months or even years.

You need to file a claim for the insurance company to pay for damages, lost equity, and loan repayments. It’s important to report it immediately to the police and contact your insurance agent right away. If this information hasn’t reached them yet, they may decide not to cover any expenses related to your car and/or credit card debt incurred due to this accident. Ensure you have all receipts for qualifying for reimbursement.

Use comprehensive insurance to cover the costs of your Stolen vehicle

Your comprehensive coverage will help cover the cost of a stolen vehicle, although it won’t cover the cash value of your car. Instead, your auto insurance company will give you the actual cash value (ACV) of your vehicle at the time of loss. If you’re financing your car or have an auto loan balance higher than the ACV, you can also use gap insurance to provide extra protection and help make up for that price difference.

If your insured vehicle is stolen, file a police report as soon as possible. Once you’ve done that, call your insurer to set up a claim and begin replacing or repairing your damaged or stolen property.

Fortunately, filing claims related to theft generally doesn’t affect your insurance rates since they are not considered at-fault incidents.