Does car insurance cover theft?

Comprehensive coverage helps cover theft or damage to your car not caused by a collision. Commonly covered perils include vandalism, falling objects (such as hail or a tree branch) or water damage. Comprehensive insurance usually helps cover theft of the car itself, stolen car parts or damage caused by a break-in (such as broken windows or damaged door locks).

Comprehensive coverage is typically required by your lender if you're leasing or financing your vehicle. Otherwise, if you own your car outright, comprehensive coverage is optional.

Comprehensive coverage has a deductible and a coverage limit. A deductible is the amount you pay out of pocket toward a covered claim. You select your deductible — for example, $500 — when you purchase comprehensive coverage. A coverage limit is the maximum amount your policy will pay toward a covered claim. The limit for comprehensive coverage is typically your vehicle's depreciated value (also called actual cash value).

So, let's say you have comprehensive coverage with a $500 deductible on your car. Your car is several model years old, and its depreciated value is $8,000. If your car is stolen, you would file a police report, then file a car insurance claim. For a covered claim, your insurer would cut you a check for $7,500 (the actual cash value minus your deductible), to help you replace your stolen vehicle.

Keep in mind that comprehensive coverage does not pay for a rental vehicle as part of your stolen car claim. For that, you'd need rental reimbursement coverage on your car insurance policy. This optional coverage helps pay for transportation expenses, such as a rental car or public transit fare, during a covered insurance claim.

Comprehensive coverage helps pay to replace stolen car parts and helps pay to repair damage done to your car by thieves, up to your coverage limit and minus your deductible. Comprehensive coverage typically does not apply to custom parts or equipment you've installed on your vehicle, such as a high-tech sound system. You may be able to purchase additional coverage for custom parts.

Additionally, your coverage may specify how it will replace — whether it's with original equipment manufacturer (OEM) parts or aftermarket parts. Also, keep in mind that your coverage may factor deprecation into the cost of replacing stolen parts on your car. Read your policy and talk with your insurance provider so you understand how your coverage works.

If your car has been stolen and you have comprehensive coverage, you should promptly file a claim with your auto insurer. Your insurer will likely investigate the theft. Once the investigation of a covered claim is complete, your insurer will reimburse you for your stolen car, up to your comprehensive coverage limit.

Car insurance may help cover catalytic converter theft if you have comprehensive coverage on your policy. Comprehensive coverage may help pay to replace your catalytic converter and repair damage done by a thief, up to the coverage limits stated in your policy, and minus your deductible. According to a report from the National Insurance Crime Bureau (NICB), converters contain metals like platinum and palladium that can be sold to recyclers for a profit. The NICB notes that thieves often do a fair amount of damage to other parts of the vehicle in the process of removing the catalytic converter. Comprehensive coverage may also help repair that damage.

Read more: Catalytic Converter Theft: Help Protect Your Vehicle

Comprehensive coverage does not cover theft of your personal items from your vehicle. Depending on your insurer, there may be an optional coverage available within your auto policy for personal property. But, the personal property coverage in a homeowners, renters or condo insurance policy helps cover your belongings, even when they're away from your place. Personal property coverage has a deductible and a coverage limit. In fact, your policy may even state that coverage limits for your personal property are lower when they're away from your place. This is sometimes referred to as "off-premises coverage." Read your policy or ask your insurance provider so you know how much coverage you have for your stuff while it's in your car.

You may be able to keep your car safer and help prevent auto theft by installing anti-theft devices or tracking devices. For example, you may want to consider installing a steering wheel lock or gearshift column lock. Both types of devices make it difficult for a thief to steal your car.

Tracking devices, sometimes called vehicle recovery systems, can be helpful in locating a stolen car. Most new vehicles come with this type of system, but you also may be able to purchase and install one on an older car.

Finally, you can take simple precautions to help avoid auto theft. Start by locking your car doors regularly and parking in well-lit areas.

When your car is stolen or damaged after a break-in, comprehensive coverage can help. In addition to taking precautions to help protect your vehicle, having this coverage on your car insurance policy may help give you peace of mind.