In case your car is stolen, your first concern may be how you are going to get it back. You might also be concerned about the condition it will be in or what might happen if the car is never found or is totaled. Thieves might take the airbags or catalytic converter and sell them for scrap. Cars may also have their wheels or rims removed. It is essential to understand how auto theft and your car insurance are related.
How Car Insurance Covers Auto Theft
Your auto insurance policy has two sections. One is for liability coverage, which protects you if you cause an accident that results in property or bodily damage (not your own). The second part consists of optional coverage like comprehensive coverage, which includes several types of damage or loss to your vehicles, such as the theft of auto parts or the entire car.
If your car is stolen, and you have comprehensive coverage, you must file a claim on your auto insurance policy. After you apply to the theft of your vehicle, there will be a waiting period while the police and insurance company investigate the situation. If your car isn’t recovered, your coverage kicks in.
How Car Theft Affects Insurance Prices
Unfortunately, auto theft has an immediate impact on car insurance rates. That is because car insurance companies will factor in the likelihood your car might get stolen into your car insurance rates. If you buy a car that is highly targeted by car thieves OR you keep your vehicle in an area that has a high rate of stolen vehicles, you can expect to pay more for auto insurance.
Steps to be taken
Try to choose a car that is not on the top 10 list of stolen vehicles. If you live in a high-theft area, consider installing a passive or active anti-theft device on your car. Auto insurers in several states are required to discount their base rates if customers install passive anti-theft devices and activate them when they are not in their vehicles.
Discounts average 15 to 20 percent from your typical car auto insurance rate. You could also install an active anti-theft device, such as an auto recovery GPS unit. Both types of these anti-theft devices could enable you to enjoy a reduction of up to 25 percent off the base rate of your auto insurance premium.