How to Handle Stolen Vehicles and Insurance

August 12, 2023 · 4 minute read · Personal Lines

Blog How to Handle Stolen Vehicles and Insurance

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The number of daily auto thefts often increases from June through August. In 2022, over one million vehicles were stolen in the U.S.  This is the highest number of vehicle thefts since 2008. This statistic creates an average of about two vehicles being stolen every minute.

What happens to all those stolen cars? Are they recovered? When should you put in a claim? Is buying a salvaged, previously stolen car worth it?

Do stolen cars lose value?

Unfortunately, if your car is stolen and recovered, it may lose value. Note the use of “may.” Your vehicle may retain its original value, but certain conditions need to be met.

  1. Your car is recovered within the time limit specified by your insurance policy.
  2. The vehicle is in the same condition it was before its theft.

When your car is recovered within your policy’s time limit and is in the same condition as before it was stolen, it keeps a clean title. Your time limit will vary depending upon your policy and insurer but often ranges from 21 to 30 days.

A clean title is what guarantees the same resale value as before the car was stolen.

However, if your car doesn’t meet these conditions, it will depreciate, and it may even become a salvage vehicle.

For a car to become a salvage vehicle, either the cost of repairs for the car must exceed the car’s actual value, or the car is returned after the insurance payout has been made. Your insurer will write the car off as a total loss and take it into their possession. The car’s next title will be referred to as a salvage title, even if the car is in perfect condition.

Previously stolen cars with a salvage title can lose anywhere from 20% to 40% of their original value.

How do I prevent my vehicle from being stolen?

There are many easy steps you can take to minimize the likelihood of your car being stolen. A lot of crime is opportunistic – if the opportunity were not there, then the crime probably wouldn’t occur.

Some things that are free and easy to do include:

  • Lock your vehicle’s doors.
  • Remove the keys from your vehicle.
  • Don’t leave any spare keys near the vehicle.
  • Close all your windows (even if it is hot).
  • Park in well-lit areas where a car thief would be visible.
  • Avoid leaving valuables such as laptops, phones, and wallets in your car.
  • Stay aware of your surroundings.

Some other helpful anti-theft ideas for your vehicle are:

Install an audible alarm system if your car doesn’t already have one.

There’s a good chance your car already has an alarm system. You’ve probably accidentally hit the button for it before on your car clicker. The alarm begins to blare, and you panic as all the systems start to wail. You then fumble with your keys as embarrassment floods your system because you have convinced yourself everyone is staring at you.

Yeah – that alarm system. If you don’t have one, it is a strongly recommended anti-theft tactic.

Install a vehicle immobilizer system.

You’ve seen the movies where the intrepid heroes have to make a quick getaway, so they hotwire a car. It’s great because they get away! Then you remember someone owns the poor car after you watch it get totaled in an explosion.

Fortunately, most cars manufactured after the mid-‘90s can’t be hotwired. However, if your car dates back further, you can purchase vehicle immobilizer systems that will make your car lock up or seize if someone tries to hotwire it.

With a vehicle immobilizer system, no car thief or action hero will be able to make a quick getaway in your car.

Install a tracking system.

No, a vehicle tracking system isn’t genuinely anti-theft, but it can help you find your stolen car a lot faster. The devices you can buy are often GPS and cell tower-based, and you can usually access the information on your smartphone.

They’re also great for when you forget where you park after grocery shopping!

How does insurance apply if your vehicle is stolen?

If you have a comprehensive car insurance policy, then you are covered if your vehicle is stolen subject to the comprehensive deductible. However, it’s essential to keep in mind that the amount your insurance company will pay out will be no more than the amount listed in your policy. This limit generally equals your car’s actual market value.

When you make a claim for a stolen car, there is usually a waiting period of around three to four weeks to see if the vehicle is recovered. If your vehicle isn’t recovered during this time period, you will receive a payout up to your policy’s limit.

Comprehensive coverage is important, but if you owe more for your car than the car is worth, it would be a good plan for you to consider a gap insurance policy. If your car is stolen and not recovered, gap insurance can cover at least a percentage of the rest of your vehicle loan.

What do I do if my car is stolen?

The two most important things you need to do if your car is stolen are to file a police report and an insurance claim. Remember, before filing an insurance claim for a stolen vehicle, you must file a police report.

A police report will often need information such as:

  • VIN and license plate number
  • Year, make, and model of your car
  • The place and estimated time of the theft
  • Did you have any personal property in the car when it was stolen?
  • What are identifying features of your car? (Bumper stickers, scratches, dents, etc.)
  • Do you have a vehicle location device?

When filing an insurance claim, you will probably be asked for information like:

  • Copy of the car’s title
  • Location of all vehicle keys before and after the theft
  • Names and contact information for all people with access to the vehicle
  • A description of the vehicle (mileage, service records, etc.)
  • Your auto lender’s contact information
  • Your policy account number

Can I buy a previously stolen car with a salvage title?

You can buy a car with a salvage title. It may even be an opportunity for you to buy a nicer vehicle at a discounted price. However, it would be best to do a couple of things before purchasing a car with a salvage title.

  • Do a vehicle history check. Salvage title requirements vary from state to state, and cars qualifying as salvageable in one state may not be considered salvageable in your state.
  • Have the car inspected by a reputable repair shop. There may be damage that’s difficult to see right away. Before you buy a salvaged car, make sure it is in a condition you are willing to pay for.
  • Check with your insurance company. Not all insurance companies insure vehicles with salvage titles. Make sure yours does before making any final purchases.

It is a common misconception that you can’t finance or insure a salvaged vehicle. You can find options for both!