Does Renters Insurance Cover Car Theft?

Are you covered when your car is stolen?

A man wonders how to replace his stolen vehicle
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When a thief steals a car—which happened more than 873,000 times in 2020—it can do more than just ruin your day. If you don’t have proper insurance, it can also wreck your finances.

Car insurance can help replace your automobile, while certain policies can pay to replace stuff like a cell phone, laptop, or designer clothes in your gym bag. It may sound tricky, but it’s easy to understand once you know which types of coverage you need. And you might be surprised to know your renters insurance policy could help recover some of your auto-theft losses.

Key Takeaways

  • Renters insurance often covers personal items stolen from a vehicle during an auto theft.
  • Comprehensive insurance covers stolen cars but not the belongings inside the car.
  • Most theft claims offer actual cash value for stolen items, which is often less than what it would cost to replace the item with the newest version.
  • Your policy may limit payout amounts for high-value items such as jewelry.

Does Renters Insurance Cover Theft?

Renters insurance won’t pay to replace your stolen vehicle, but it may cover stolen personal items, even when they’re outside your home.

For instance, if someone breaks into your car and steals your cell phone, your renters insurance coverage will likely help pay to replace it. Your policy may also cover clothing stolen from your automobile or even a bike that was stored in or on the car.

Some insurers require policyholders to purchase a bicycle endorsement to their renters policy, which may increase your premium.

There are a few things to keep in mind. First, renters insurance only pays for personal property, and that’s only up to your coverage limit, subject to a deductible. For example, your policy may have a $25,000 personal property limit and a $500 deductible. In that case, you have enough coverage to replace a $300 stolen cell phone, but you couldn’t file a claim because it’s valued at less than your policy’s deductible.

Your renters insurance policy may also limit the amount it will pay for certain types of personal property. For expensive items such as jewels, musical instruments, and sports equipment, consider purchasing scheduled property coverage for maximum protection.

How To File a Claim

If a thief makes off with your car and you’ve already filed a police report, you’ll need to file a claim with your renters insurance company for stolen personal property. First, make a list of all stolen items. If you prepared a home inventory when buying renters insurance, review it to see if it includes the stolen items. A comprehensive inventory should include details such as serial numbers, purchase prices, receipts, and photos of each item. When filing a claim, some providers may ask for an inventory as “proof of loss” to prove you owned the property.

Check your renters insurance policy to see if the cost of the stolen items is higher than your deductible. If it is, you can file a claim.

Most standard renters insurance policies pay actual cash value for damaged or stolen personal property, which means the insurance company will only pay the depreciated value of your belongings. For example, if your three-year-old cell phone cost $1,000 when you bought it, you’ll likely receive a much lower claim amount that probably won’t be enough to cover the cost of the latest version of the phone.

The claims filing process varies by insurers. With some providers, you’ll need to call the company or an agent, but others enable you to file a claim through a webpage or using a mobile app.

What Insurance Covers Car Theft?

Comprehensive auto coverage is typically the policy that covers stolen vehicles. However, comprehensive coverage does not cover stolen personal property. That’s why you must rely on a condo, home, or renters insurance policy to replace your personal items.

Comprehensive auto insurance isn’t required by law, but if you finance or lease a vehicle, your leasing company or lender will require you to carry it. In most cases, comprehensive coverage won’t pay enough for you to buy a shiny new automobile. Here’s why:

A Deductible Applies

Comprehensive car insurance has a deductible. So if your policy has a $500 comprehensive deductible, you’ll have to pay that amount out of pocket to replace your stolen wheels. Typically, collision and comprehensive coverage have separate deductibles. Common comprehensive deductibles range from $100 to $500.

Actual Cash Value

The comprehensive coverage of most standard car insurance policies pays actual cash value to replace a stolen vehicle. That means the insurance company will calculate depreciation and issue a settlement centered on the current market value of your vehicle, based on factors such as its age, mileage, and wear and tear.

Gap insurance may help pay the difference between the insurer’s settlement and the amount you still owe on your stolen vehicle.

What To Do if Your Car Is Stolen

When a car thief strikes, take immediate action. Contact the police to report the theft. They’ll need to know your automobile’s license plate number, its Vehicle Identification Number (VIN), and its color, make, and model. Within 24 hours of the theft, contact your insurance company. Remember, you’ll need to file a comprehensive car insurance claim to replace your vehicle and a renters insurance claim for personal stuff that was in the car.

The best way to avoid filing an auto theft claim is to make life difficult for car thieves.

  • Do not leave the keys in the car
  • Always lock the vehicle
  • Roll up the windows
  • Don’t park in dark areas
  • Install anti-theft devices

Frequently Asked Questions (FAQs)

Does renters insurance cover theft?

Standard renters insurance policies provide coverage for personal property such as clothing, electronic equipment, and furniture.

Does renters insurance cover car theft?

Renters insurance won’t pay to replace a stolen vehicle. To protect your automobile against theft, you’ll need to buy comprehensive auto insurance.

Does renters insurance cover theft outside of the home?

Yes, renters insurance can cover personal items stolen from locations outside your home, such as from your car, a hotel, or your workplace.