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. If you have stolen car insurance, It’s important to know what your policy may cover if you’re the victim of car theft, and how you might increase your chances of having your insurance claim approved. 

Data from the Australian Bureau of Statistics (ABS) shows that 60,417 Australians were victims of motor vehicle theft in 2023. This is 10% higher (5432 victims) from the previous year, and the highest number of victims in the time series since 2008 (68,262 victims).

According to the ABS, over half (54% or 32,369 victims) of stolen motor vehicles were taken from an outbuilding/residential land, and nearly a quarter (24%) were taken from a street/footpath.

Additionally, data from insurance provider Budget Direct found that 45% of surveyed Australians did not make a claim after their car was stolen, or they made a claim that was not approved by their insurer. This means nearly half of car theft victims could be left out of pocket. 

What does insurance cover if your car is stolen?

While third-party fire and theft cover or a comprehensive policy will cover you if your car is stolen, a basic third party car insurance (CTP) does not cover car theft.

Both third party fire and theft car insurance policies and comprehensive car insurance policies cover theft, but there are a few small differences. Both policy types typically cover the following as standard, assuming your insurance claim is approved:

• Getting you a temporary replacement car until your car is found
• Towing charges 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
• Emergency accommodation and transport if you are left stranded

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

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

Keep in mind that different insurance policies may have differing levels of coverage, and exclusions may apply in some cases, such as if you left your keys in the car. 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 do 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, like 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 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 help protect you against the cost of potential damages to the stolen car caused by accidents that the thief may get into.

3. Inform your car loan provider

If you were still repaying a car loan for the vehicle, it is worth informing the lender about the car theft.

If your insurance claim is approved, your insurance provider may contact the lender directly and pay the claim to them, rather than to you. 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.