Does Car Insurance Cover Theft?

If you are a car owner, you must be aware of the constant tension someone might feel when they leave their car on a secluded road, or park in a place where there is no sign of proper parking or people. You will also be aware of how people get scared of their car getting stolen. What if I tell you that you can now live worry free regarding your car getting stolen? What if your car gets stolen and still you can be relaxed and have your peace of mind? This may sound like a dream, but is a reality. When you buy comprehensive or stand alone own damage car insurance, you can be rest assured that you don’t have to worry about your car being stolen.

Here’s why - A comprehensive or stand alone own damage car insurance covers your car for any theft, fire, burglary, damage or any financial issue incurring on your car due to an accident. This means that when you buy one of these insurance, your car will be covered for theft.

What Is The Coverage Under A Car Insurance?

Leading car insurance companies give two different types of insurance policies: package plans and liability-alone policies (third parties) (comprehensive). Up to a particular limit, third-party damages are covered by auto insurance carriers. Damages from personal accidents and automobile theft are also covered with complete coverage. Additionally, the plan provides no-claim bonus (NCB) protection, add-on depreciation coverage, etc.

If your car is stolen, some plans may provide you with a daily allowance, which means they will cover the cost of a rental car for the duration of the insurance. Within 24 hours after the theft of your automobile, your insurance contract can also include a courtesy or hire car option.

Additionally, keep in mind that in some plans, the no claim bonus covers partial theft of accessories. This implies that even if some automotive accessories are stolen (for a detailed list, please refer to the policy wordings), you may still make an insurance claim for such items without having it influence your no-claim bonus.

Steps for Filing a Claim If Your Car is Stolen

If your car is stolen, do not panic. Take a deep breath and follow the steps mentioned below:

Step 1: File an FIR

As soon as you are notified or realise that your car has been stolen, make sure to file an FIR (First Information Report) immediately. Make sure to give all information to the Police about the last location of your car, date it went missing, time since you could not locate the car, registered RTO, vehicle details (make, model, colour, variant, etc), whose name the vehicle is registered on, and eye witness details if any.

Step 2: Inform Your Insurer

Once you have filed the FIR, immediately inform your insurer about the same. Provide your insurer with the following information: policy number or policy document, copy of FIR, car’s details, last seen information about the car, eye witness details if any.

Step 3: Insurer Verification & Documentation

Your insurer will now proceed with an investigation which will also involve the Police. You will be interviewed along with the eye witnesses mentioned by you. You will then be asked to submit supporting documents similar to those mentioned in step 2.

Step 4: Loss Assessment & Claim Settlement

Your insurer will now assess the loss based on the current market value of your vehicle (value at the time of theft). The claim amount will be typically equivalent to your Insured Declared Value or IDV that is mentioned in your policy. Once your insurer completes their investigation and has verified all the documents, your claim will be processed. 

You will now receive your claims based on the terms and conditions mentioned in your policy after any specified deductibles (if any) is subtracted.

Additional Factors to Consider When Making a Claim For Theft of Your Car

Make sure you keep the following factors in mind while making your claim request:

1. You need to inform the RTO where your car is registered about the theft that took place
2. Procure No Trace Report - if your car is untraceable, make sure you take a no trace report from the Police to stay away from any other legal issues arising due to the misuse of your vehicle
3. Provide Authentic Information: Make sure that you provide authentic information to both the Police and your insurance company to have a smooth claim process.

What Is The Amount Of Compensation Provided By Your Insurance Provider In Case Of Theft?

If your stolen automobile is not recovered, the insurance provider will provide a payment equivalent to its current market value, or Insured Declared Value, or IDV. Only individuals with personal damage or comprehensive car insurance are eligible for coverage in this circumstance. If you don't have these protections, your insurance company won't cover anything if your car is stolen. You must make an insurance claim for auto theft if your vehicle has been taken. First, you would need to report the occurrence to the police and the insurance provider. A representative of the insurance will walk you through every step of the procedure.

What Are The Things That A Person Should Remember While Claiming For Theft?

Following are the things that a person should do while claiming theft -

1. You receive a no-trace report or untraced automobile report from the police declaring that it is impossible to find the insured vehicle. The release of this report can take a month. Since it is a crucial document, the likelihood that your claim request will be denied if this report is absent is considerable.
2. Additionally, you'd have to go straight to the road tax officer's office and get a duplicate RC book.
3. If you financed the acquisition of your automobile, the insurance provider will cover the payout to the lender, and you'll be responsible for the balance.

Endnotes

Although you probably wouldn't expect to have your automobile stolen, it's always a good idea to be ready for the situation knowing what to do. Make sure your auto insurance is current, and study the fine print to ensure you have the appropriate car insurance add-ons in order to be protected from any unforeseen circumstances.

FAQs

How much claim for car theft?

Ans. The claim amount is usually the amount mentioned as per your Insured Declared Value (IDV) mentioned in your policy document. It is calculated once the current market value of the car is also analysed (market value at the time of theft).

Is theft of a car covered by insurance?

Ans. Yes, theft of car is covered by your insurance if you have comprehensive or stand alone own damage insurance. It is however not covered if you only have third party car insurance.

How to protect a car from theft?

Ans. Make sure to:

Park in a well lit area from where you have complete visibility

Lock all doors and windows of your car properly

Do not leave your car keys behind

Do not leave any valuables in the car or in the car from where it is visible to the public

Install security or anti theft systems in your car 

What are the benefits of theft insurance?

Ans. When your car is insured for theft, you will be able to get back the money of the car based on your Insured Declared Value (IDV) mentioned in your policy document and as per current market value of the car. You will have complete peace of mind and will not have to undergo any stress related to financial losses or legal running around to do. 

Will my third party insurance cover car theft?

Ans. No, a third party insurance does not cover your car for theft as it only covers any legal or financial liability arising due to an accident with a third party person or damage to their property. You need to take a comprehensive or stand alone own damage to get benefits for your car and for getting safety for theft of your car.

Also Read: 

Compare & Buy the Best Car Insurance Policy

Can You Claim Car Insurance With A Temporary Registration Number?