How Car Theft Affects Your Auto Insurance Rates

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Written by Ray Prince Edited by Nick Versaw

Updated May 8th, 2023

One of the biggest threats to auto insurance companies is rising auto theft. According to the National Insurance Crime Bureau (NICB), more than 1 million vehicles were stolen in 2022, up from an estimated 937,976 thefts in 2021 and 888,011 in 2020. No wonder why so many people ask, “Does car insurance cover theft?”

This guide will help you answer all your questions about how auto insurance handles theft and ways to prevent your vehicle from being stolen. 

If you live in a high crime area or have recently been the victim of vehicle theft, now may be a good time to compare quotes for multiple top-rated auto insurance providers using Compare.com’s quick and easy rate comparison tool:

Do High Car Theft Rates Increase Insurance Rates?

Car insurers base all their calculations on risk — so a higher risk of theft equals higher car insurance rates. If you live in an area where car theft is common, that can bump up your insurance premium — even if your specific neighborhood is considered pretty safe.

You might guess that Detroit or Las Vegas are among the cities where your car is likeliest to get stolen. According to the Insurance Information Institute (III) (2021), the metropolitan areas with the highest theft rates are:

1. Bakersfield, CA
2. Denver-Aurora-Lakewood, CO
3. Pueblo, CO
4. Albuquerque, NM
5. Portland-Vancouver-Hillsboro, OR-WA

You might also pay higher insurance rates if your car is one of the most frequently stolen models. Thieves love older vehicles because they’re easy to break into. Usually, they’re not targeting luxury vehicles — they go for common sedans, trucks, and SUVs.

According to the III, the top five most-stolen vehicles are:

1. Chevrolet full-size pick-up    
2. Ford full-size pick-up
3. Honda Civic
4. Honda Accord
5. Toyota Camry

Driving an Accord in Albuquerque, you could pay more for car insurance than other drivers. It’s not fair, is it? But you can fight back — all you have to do is compare insurance quotes from different insurers. Comparison shopping makes it easy to find the best deal, so you don’t have to accept high rates.

Does Car Insurance Cover Theft?

That depends on the type of coverage you have on your auto policy. If you have comprehensive car insurance coverage, it will cover a stolen car. Comprehensive auto insurance pays for damage to your car caused by natural disasters, falling objects, theft, vandalism, and other non-collision-related events.

If your car is stolen and you have comprehensive coverage, filing a claim is pretty straightforward:

1. Report the theft to the police immediately and obtain a copy of the police report.
2. Contact your insurance company as soon as possible and provide them with your policy number, the date and time of the theft, and a copy of the police report.
3. Provide any additional documents your insurance company may ask for, such as your vehicle identification number/registration or any other supporting documentation to help your claim (e.g., photos and video).
4. Submit your claim to your insurance company and wait for their determination (verifying that the theft occurred and the extent of the damages).
5. If your claim is approved, you will receive compensation for the value of your car, in line with your coverage limits and deductible. Depending on your limits, you may see out-of-pocket costs.

If you dropped collision and comprehensive coverage and only have liability insurance, you will not be covered for theft.

Let’s say you do have comprehensive coverage for your stolen car. When you file a claim, don’t expect to receive a check big enough to upgrade your ride. Insurance typically covers your car’s actual cash value (ACV), not the total replacement value.

If your car is recovered and you discover it’s been damaged, insurance can cover that too. Comprehensive insurance covers any parts that have been stolen, such as the airbag or catalytic converter. It also covers broken parts due to the break-in, like shattered glass. 

What Auto Insurance Will Not Cover

There are a few things insurance probably won’t cover, such as the theft of expensive aftermarket car parts (e.g., steering wheel), stolen items (e.g., personal belongings like cell phones), vehicle depreciation, or the cost of cleaning a stolen car (if, for instance, thieves have been sleeping in it). 

To get a payout for the theft of personal items, you’ll have to file an insurance claim with your renters insurance policy or homeowners insurance.

If Your Car is Recovered After You Buy a New One

What happens if you’ve already bought a new car with the insurance money, and the police recover your old car? Here’s the bad news: You don’t get to keep your old car. It belongs to your insurer now. However, if you want it back, you can ask your car insurance company about buying the recovered vehicle from them. If it’s damaged to the point where its value is minimal, your insurer may just let you keep it.

How Does a Theft Claim Affect My Auto Insurance Policy Premium?

If you file a claim for theft or vandalism, your auto insurance premiums might go up. However, it’s not always a one-size-fits-all situation. It all depends on different factors like the incident’s severity, claims history, driving record, and insurance company’s policies.

If you file multiple claims in a short period, you might see the biggest increases in your car insurance premiums. Some insurance companies might even cancel your policy altogether.

To avoid surprises, it’s always a good idea to talk to your insurance company first and understand your coverage options before you file a claim. This way, you won’t be shocked by any rate increases if something happens down the road.

What’s the Best Car Theft Protection?

Back in the day, thieves would hotwire cars — a technique that involves connecting the wires in the steering column to connect the battery, the starter, and the ignition without needing a key. But hotwiring has become almost impossible in recent years because cars built since 2004 include more sophisticated theft deterrents.

As a result, car thieves have become more advanced. Hacking kits, relay devices, and key programming devices are easily purchased online, allowing thieves to mimic keyless entry signals or program a vehicle to accept a substitute key. So what can you do to defend yourself?

• Wrap your keys in foil when you’re not using them. This sounds like one of those hoaxes your aunt loves to share on Facebook, but it actually works. Stashing your key fob in foil (or in a special pouch, which is a little classier) prevents thieves from copying the access code it emits, thus keeping your car safe from theft.
• Don’t entice thieves with puffer cars. “Puffers” are cars left running in the driveway to warm up during winter. They’re easy for thieves to spot — they just look for clouds of exhaust — and even easier to grab. In many cities, leaving your car parked and idling is illegal.
• Keep your car super clean. A tidy, empty interior is an effective theft deterrent. Jackets and bags easily tempt thieves (there could be a wallet inside), and charging cords (is there a laptop under the seat?)
• Don’t leave your keys in the car! You probably think it’s OK to occasionally leave your keys in the car while you dash into the convenience store or donut shop. No one would dare steal it in broad daylight, right? Guess what: They dare. According to the National Insurance Crime Bureau, 11% of vehicle thefts occurred thanks to key fobs left inside a vehicle.
• Do not forget to install an anti-theft device in your car. This can be as simple as an old-school club or as high-tech as a remote disabling device. Car insurers often offer cheaper quotes if you have car theft protection devices, so don’t forget to include them when comparing quotes.

Don’t Let Auto Theft Make You Worry about Rates

Now that you know that comprehensive coverage includes protection against theft-related claims, now may be an excellent time to explore an affordable full-coverage car insurance policy that includes it.

Use Compare.com’s rate comparison tool to shop for affordable auto insurance quotes from top-rated providers like Nationwide, Progressive, and Liberty Mutual.

It is fast and easy to retrieve free quotes.

Ray Prince Insurance Writer

Ray Prince is an auto insurance writer for Compare.com based in Miami. He specializes in writing long-form content and product descriptions for the automotive and auto insurance industries. His work appears on sites such as Freeway Insurance, Auto Guide, Turn5, Mercedes Benz U.S.A., and Pelican Parts, with past and current roles as a digital operations manager at Pandora Media and iHeartMedia.