Laura Berry is a former State Farm insurance producer and insurance expert.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Car insurance provides you with financial protection for covered claims, but it certainly does not cover it all. As a named perils policy, a personal auto insurance policy will only afford you with coverage for losses that are specifically listed in your policy booklet and only when you carry the appropriate coverage option. One of the state perils within the policy booklet is theft, and in some cases reported thefts are covered and in others they are not. It is up to you to do your homework and to understand what type of coverage you carry so that you know when your policy will and will not help you. Start comparing car insurance rates now by using our FREE tool above!

While the rate of vehicle theft is trending downwards with the creation of new smart security systems, it is still estimated that a car is stolen every 45 seconds in the nation. Whether or not you are likely to have your car stolen depends on several factors, including the model type and the area that you live in. These are all things to consider as you are building your insurance and deciding upon coverage options. If you are financing the vehicle or you could not pay to replace on your own if it were stolen, having theft insurance is wise. Read on and learn how to customize your policy to cover theft claims and what you should know if your car is ever stolen.

Do all auto insurance policies provide coverage for theft?

One of the biggest mistakes that you can make when you are building a policy or buying insurance is that it will automatically cover you if your car is stolen or damaged in an auto accident. All private passengers have a coverage option that will pay for theft claims, but not all policyholders elect to take this type of coverage.

If you are looking for coverage that protects stolen vehicles, you need a comprehensive insurance policy. Comprehensive coverage is often bundled with collision or other types of coverage, however, you can purchase a comprehensive policy that covers your vehicle if it’s broken or stolen.

Even though comprehensive coverage covers vehicle theft, it covers only the car itself, not the personal property left inside (such as your phone, laptop, or other valuables). Comprehensive insurance helps replace your car if it’s stolen, replace certain parts that are stolen, or repair damage to your car resulting from theft or break-in.

Comprehensive coverage is typically required by your lender if you’re leasing or financing your vehicle. Otherwise, it’s optional coverage. A comprehensive policy does not apply to custom parts or equipment you have installed in your car, therefore you’ll need to buy additional coverage for those parts.

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What are the legal insurance requirements?

In most states, drivers are only mandated by vehicle code to carry minimum liability limits to avoid criminal and financial penalties. Any other types of physical damage coverage that will pay for your car are not required and are considered optional. You may, however, be under contract to carry coverage for damage to the car when it is leased or financed.

If you fail to carry physical damage coverage and you are a borrower, the cost for forced-placed coverage will be added to the principal on the loan. Little might you know, this coverage will only protect the lender and not you as the registered owner. This is why it is critical to not only have insurance, but to have enough insurance to protect your own financial interests.

Should you buy coverage for theft claims?

Now that you understand the difference between the requirements by state and by lender, the next step is learning how to build a policy that will provide coverage for potential theft claims. It is important that you remember that you should consider buying theft protection even if you are not obligated to. Imagine having to pay to replace a vehicle that you own that was completely paid off and you can see why so many will select theft protection even if they do not have protection for collisions.

You have to consider the value of your vehicle and the cost of the optional protection before you can make a wise choice if you even have the option.

Most experts say that it is best to remove full coverage coverage for theft or collision if the car is not worth more than $1500 to $2000. While this is a recommendation, you may be able to carry theft coverage for a small monthly amount without even carrying coverage for accidents.

What are the ins and outs of theft protection?

If you have decided that you want peace of mind in knowing that you will have help if your car is stolen, you will need to add comprehensive coverage to your auto policy. Comprehensive coverage, which may be called comp or other-than-collision, is a form of physical damage coverage that will pay for a long list of different types of non-moving or non-fault damage claims. Some of the perils that are covered when you select this stand-alone physical damage coverage include:

  • Theft and damages sustained when vehicle is recovered
  • Vandalism
  • Windshield or auto glass breakage
  • Hail damage
  • Fire Damage
  • Falling objects
  • Civil riot
  • Explosion

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How much will comprehensive insurance pay?

Comprehensive coverage does not have a fixed dollar limit. Instead, the policy will pay up to the fair market value of the car at the time of the loss if a stolen car is not recovered. Any modifications or aftermarket additions that you have installed will be considered when valuing the car. You can negotiate with the insurer to come up with a fair value if you do not agree on the first settlement offer that is given.

What happens if the car is recovered?

If the car is recovered in a reasonable amount of time, the company will inspect it for damage. At that time, they will determine if the repairs needed to restore the vehicle to its pre-loss condition is higher than the car’s value. If this happens then the car will be a total loss and you will receive a check for it’s value to find a replacement. You can also elect to keep the car and have its salvage value subtracted from your claims payment.

Will you have to pay a portion of the loss?

The auto insurance deductible that you carry will deducted from your insurance claim. This is the portion that you are responsible for when you file a comprehensive claim for any of the perils above. You should be sure to choose a deductible that you can afford but that still is reasonably-priced as the lower the deductible the higher the premiums. Typically, low insurance deductibles for comprehensive cover are not as high as they would be for collision coverage.

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Can you have comprehensive without collision?

Comprehensive is known as a form of storage protection and is therefore available to policyholders who do not want collision. It is not possible to buy collision insurance without buying comprehensive.

Now that you understand how basic policies work and what must be added to provide theft protection, the next step is to price the cost of coverage. You can start by asking your current company for a quote and then price quotes elsewhere. If you use an online rate comparison tool, you can compare pricing and adjust auto insurance options with the click of a button so that you can find the best plan. Start comparing car insurance rates now by entering your zip code in our FREE tool below!