What does insurance cover if your car is stolen?

Australia is considered the lucky country, but unfortunately it has one of the highest rates of vehicle thefts in the world. It’s important to know where you stand with your insurer if your car or its belongings are stolen.

Data from insurance provider Budget Direct shows that every 11 minutes a passenger or light commercial vehicle is stolen in Australia. In 2021 alone, 38,187 of these vehicles were stolen. 

Shockingly, 40% of surveyed Australians did not make a claim after their vehicle was stolen, or they made a claim that was not approved by their insurer. This means the average victim of car theft is left $5,000 out of pocket in the event the worst does occur. 

Let’s explore what your insurance may cover if your car is stolen, and you might increase your chances of having your insurance claim approved. 

What does insurance cover if your car is stolen?

Having car insurance is an advantage in the instance that your car is stolen, but only if you have third-party fire and theft cover or a comprehensive policy. Keep in mind, a basic third party car insurance (CTP) does not cover theft.

While both policies cover theft, there are a few small differences. Both insurance policies may typically cover the following as standard: 

• Getting you a temporary replacement car until your car is found
• Towing charges may be taken care of if your car is found damaged
• Paying for any repairs if your car is damaged but not destroyed
• Paying for a totalled or unrecovered car, depending on the mutually agreed value at the time of buying the policy
• Your policy may take care of emergency accommodation and transport if you are left stranded

However, a comprehensive policy may go the extra mile to:

• Pay for the contents in your car (up to a fixed amount)
• Provide you with a brand new car of the same make and model. This is within a stipulated period and only if your vehicle was brand new when you bought it.
• Pay for replacement keys

This assumes that your insurance claim is approved. Keep in mind that different insurance policies may have differing levels of coverage. It’s crucial that you read the Product Disclosure Statement (PDS) for your car insurance policy to know exactly what you are and are not covered for. 

What to consider if your car is stolen

Having your car stolen can be scary, but fortunately there are steps you can take if the worst does happen.

1. Contact the police

An important first step is to contact the police and give them all the information about the incident, including details about your vehicle – the make, colour and registration number. You will need to file a police report to make a claim with your insurer.

The police should provide you with an incident report number, which the insurance provider will require when you do make your claim.

2. Contact your insurance provider

If your vehicle has theft insurance, call your insurance company and inform them about the theft as soon as possible to start the stolen car insurance claim process. 

If your policy has a temporary replacement clause, the insurance provider may provide you with a replacement vehicle so you're not left without transport. Your insurance provider will require a copy of the police report, so share it with them as soon as you get it.

Informing your insurance provider of theft immediately may also protect you against the cost of potential damages to the vehicle caused by accidents that the thief may get into.

3. Inform your car loan lender

If you were still repaying a car loan for the vehicle, it is worthwhile informing the lender that theft has occurred.

If your insurance claim is approved, your insurance provider may contact the lender directly and pay the claim to them, rather than to you directly. It is generally easier if the communication is between these two parties rather than through you, so provide your lender with information about your insurance policy as required. 

4. Ask for a replacement

If your car isn’t found, or it’s badly damaged upon recovery, you will likely need a replacement vehicle as soon as possible. Depending on the terms of your policy, your insurance policy may be able to help you with a replacement.

5. Inform your bank if necessary

Did you have any valuables in your car? If you’ve lost important personal items, such as your wallet, don’t forget to immediately contact your bank to cancel any credit or debit cards. 

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