Does Car Insurance Cover Theft?

By the Mercury Team

According to the most recent data from the National Insurance Crime Bureau (NICB), over 1 million vehicles were reported stolen nationwide in 2023, with California accounting for the highest number of stolen vehicles (208,688). This eye-opening stat may raise a question to yourself: Does car insurance cover theft? 

In this blog, we’ll break down how car insurance handles theft, what you can expect from your policy, and what to do if your vehicle is stolen.

What Happens if My Car Is Stolen?

Realizing your car is missing can be a heart-stopping moment, but try not to panic. Here’s what to do if your car gets stolen:

Step 1. Make Sure It Was Actually Stolen

First, take a deep breath and double-check. Could it have been towed? Did a friend or family member borrow it? If you’re parked in a restricted area, call local towing services to see if your car was impounded before assuming the worst.

Step 2. Call the Police Right Away

If your car is definitely stolen, report it to the police immediately. A police report is essential for filing an insurance claim and increasing the likelihood of recovering your vehicle. Give them as much information as possible, including:

• Your car’s make, model, year, and color
• License plate number
• Vehicle Identification Number (VIN)
• Where it was last parked
• Any unique features (stickers, dents, custom rims, etc.)

Step 3. Contact Your Insurance Provider

After filing a police report, notify your insurance company as soon as possible. Be prepared to share the same details you provided to the police, along with your policy number. Your insurer will guide you through the claims process and let you know what coverage applies.

Step 4. Report the Theft to Your Car’s Finance or Leasing Company

If you’re still making payments on your vehicle, inform your lender or leasing company about the theft. They may have specific requirements for handling the situation, and they’ll likely coordinate with your insurance provider.

Step 5. Track Your Vehicle (If Possible)

If your car has a GPS tracking system, use it to check its location or share access with law enforcement. Some vehicles with built-in tracking, like OnStar or LoJack, can help authorities recover the stolen car more quickly.

Step 6. Monitor for Fraudulent Activity

Car thieves sometimes use stolen vehicles to commit crimes or attempt to sell them using forged documents. Keep an eye on any notifications from toll agencies, parking violations, or suspicious activity involving your vehicle.

Step 7. Stay in Touch with the Police and Your Insurance Company

Follow up regularly to check for updates. If your vehicle isn’t found within a certain timeframe, your car insurance provider will guide you through the claims process so you can get compensated or find a replacement.

How to Protect Your Car from Theft with Basic Precautions

Let’s look at some basic precautions you can take to help deter car thieves:

1. Never Leave Your Car Running Unattended

It may seem convenient to leave your car running while you dash into a store or warm it up on a cold morning. But killing the engine is one of the easiest ways to prevent car theft. Thieves often target unattended vehicles that are left running, especially in public places. Even if you think you’ll be gone for just a moment, that’s all it takes for someone to drive off with your car. Always turn off the engine, lock the doors, and take your keys with you.

2. Keep Keys Secure

Leaving your keys in the car or ignition, even in a “secure” spot like a locked garage, is a mistake that could cost you your vehicle. Thieves know to check common places like hide-a-key boxes, under floor mats, and in glove compartments. Even when parked at home, it’s important to always remove your keys and keep them in a secure spot inside. Don’t assume a locked garage or a hidden key will be enough to deter a determined thief. When it comes to stopping car theft, taking your keys with you is one of the easiest, most effective ways to do it.

Car Theft Prevention and Securing Your Vehicle

Everyday habits like locking your car, hiding valuables, and choosing smart parking spots can help reduce the risk of getting your vehicle stolen.

3. Always Close Windows and Lock the Car

It’s easy to think your car is safe when it’s parked in your driveway or garage, but leaving windows open or forgetting to lock your vehicle can make it an easy target for thieves. Even when parked at home, always close the windows and lock the doors. A locked car is far less likely to attract a thief, and taking a few extra seconds to secure it can prevent a lot of hassle down the road.

4. Hide Valuables

Leaving valuables in plain sight is like inviting thieves to take a closer look at your car. Items like bags, electronics, or even spare change can tempt someone to break in. To protect your belongings and your vehicle, keep any valuables out of sight — preferably in the trunk or glove compartment. Better yet, take them with you whenever possible.

5. Park Smart

Whenever possible, choose well-lit, high-traffic areas where potential thieves are less likely to take the risk. Parking near security cameras or in monitored lots adds an extra layer of protection. Avoid isolated spots, especially at night, as these areas make it easier for thieves to break in unnoticed.

Best Ways to Prevent Car Theft with Advanced Security Measures

Here are some security measures you can take to help prevent car theft:

6. Use Mechanical Locks

One of the simplest yet effective ways to boost your car’s security is by using mechanical locks like steering wheel or brake pedal locks. These visible deterrents make it clear that your vehicle won’t be an easy steal. Even if a thief manages to break into your car, these vehicle anti-theft devices make it much harder to drive off with it.

7. Consider a Security/Tracking System

Installing a security or tracking system like LoJack, Teletrac, or OnStar adds another layer of protection. These systems make it harder for thieves to steal your vehicle and can help law enforcement track and recover it quickly if it’s ever taken. Many of these systems come with features like remote monitoring, GPS tracking, and alerts that help keep your car secure wherever you park.

8. Etch the VIN (Vehicle Identification Number) on Windows

Etching your vehicle’s VIN on the windows is a smart, inexpensive deterrent. Thieves are less likely to target a car with a VIN etched on it, as it makes the vehicle harder to resell or strip for parts.

How to Protect Your Car from Theft by Safeguarding Personal Information

When it comes to protecting personal information, consider some of these car theft prevention tips:

Don’t Leave Personal Documents in the Car

Leaving personal identification documents in your car — e.g., registration, auto insurance card, or any other sensitive paperwork — can pose a serious risk. Thieves can use these documents to impersonate you or even attempt to sell your car. Always take your important papers with you or store them securely to protect your identity and prevent further complications if your car is stolen.

Be Cautious with Valet Services

When handing your car over to a valet, attendant, or mechanic, it’s best to leave only the ignition key. Keeping other keys, like house or office keys, with you reduces the risk of theft. Additionally, don’t leave anything personal or valuable in your vehicle, and always double-check that your car’s security features are activated before parting with it.

Does Comprehensive Coverage Cover Theft?

Having your car stolen can feel like a nightmare, but the right insurance coverage can help soften the blow. Unfortunately, it won’t cover theft if you only have a liability-only policy. However, if you have comprehensive coverage, you’re in luck. This optional add-on is designed to protect against theft, vandalism, and other non-collision-related incidents.

Your initial thought may be to ask, “how do I know if I have comprehensive coverage?” You’ll first want to look at your policy documents to review the coverage types you’ve purchased. If you have comprehensive coverage, the details will be listed there. And, if you have any further questions, a quick call or email to your insurance provider should clear up any confusion.

If your car is stolen and not recovered, comprehensive insurance will reimburse you for the actual cash value (ACV) of the vehicle at the time of the theft, minus your deductible. The ACV is based on factors like the car’s make, model, age, mileage, and overall condition.

If your stolen car is recovered but damaged, comprehensive coverage can also help pay for necessary repairs. However, if the vehicle is deemed a total loss, the insurer will typically issue a payout based on the ACV rather than covering repairs.

One important thing to note is that auto insurance doesn’t cover personal belongings left inside your car. So, if you had a laptop, phone, or any valuables in there, they won’t be included in your claim. However, a homeowners or renters insurance policy may provide coverage for your items.

Also, if you have an active loan or lease, your lender may require both comprehensive and gap insurance to cover any remaining balance in case of a total loss. Gap insurance helps cover the difference between your car’s ACV and what you still owe on your loan or lease, preventing you from being stuck making payments on a car you no longer have.

Ask the Expert

Q: Will my insurance go up after a theft claim?

A: “Filing a theft claim under your comprehensive coverage can bump up your premiums, but not as much as, say, a major accident you caused. If you’re in an area with high car theft rates or if you’ve filed multiple claims in the past, you may see a bigger jump. But if this is your first claim and your record is otherwise clean, the increase might be minimal. Ultimately, it really comes down to your insurer, your past claims history, and where you live.”

-Kevin Quinn, VP, Claims, Auto

Conclusion

Keeping your car safe from theft starts with smart habits and preventive measures—locking your doors, parking in well-lit areas, and using anti-theft devices can go a long way in deterring thieves. But even with the best precautions, car theft can still happen. That’s why having the right insurance coverage is so important.

If your car is stolen and you have Mercury Insurance, here’s what to do to get your claim started quickly:

• Contact Mercury immediately to report your loss. Call Mercury’s Claims Hotline at 1-800-503-3724.
• Prepare to file your claim by having your policy number in hand.
• Remember to provide claims adjusters with alternate (mobile) contact phone numbers.
• Offer photos of your car to your claims adjuster if these are available.
• Contact the police. They’lll advise if they need to respond.

If you’re looking for an insurance company that offers reliable coverage, consider Mercury. We provide cheap car insurance, excellent customer service, and auto insurance discounts to help you save even more. 

Contact us today for a fast, free quote!