Stolen car insurance claims

Does car insurance cover theft?

It depends on the level of cover you have.

Both fully comprehensive and third party, fire and theft (TPFT) motor insurance policies will cover your car if it’s stolen.

But third party only (TPO) cover won’t. It only insures against any damage or injury you cause to other people, their cars and property when you’re driving.

If your car’s stolen, it may take up to 30 days for your insurer to pay out on a claim. That’s because they’ll usually wait to see if the car is recovered by the police. The insurer will also do its own investigation to check for a fraudulent claim.

If your car does turn up and has minimal damage, then your insurer can settle a claim quickly by paying for repairs.

But if it isn’t found within 30 days - or if it’s found with serious damage that’s beyond repair or that cannot be safely repaired - it’ll usually be written off. Your insurer should then pay you the car’s current market value.

Will my car insurance go up if my car’s been stolen?

Unfortunately, making any claim can lead to an increase in your premium when your policy’s up for renewal. That’s because, broadly speaking, insurers regard people who’ve made claims in the past as more likely to make another claim in the future.

Do you have to pay an excess if your car is stolen?

When you take out car insurance, it comes with an excess which will be detailed in the terms and conditions. This is the amount of money you’ll need to pay towards a claim.

Many insurers waive the excess if your car was stolen from a private locked garage. But in other cases, you may have to pay it.

Usually, you’ll need to pay the excess immediately. Then your insurer will investigate your claim and progress from there.

Are my possessions inside my car included?

Many comprehensive policies allow you to claim compensation if you had personal belongings in the car when it was stolen and they haven’t been recovered.

Policies will have a limit on the total amount they’ll pay out for your personal possessions though - perhaps up to £250, or £500, depending on the cover you have.

Money, credit and debit cards, stamps, tickets and vouchers or stock for business purposes are usually excluded from cover.

TPFT policies usually won’t pay out for items you left in your car when it was stolen.

If you’ve got cover for ‘personal possessions away from home’ included in your home insurance policy, you may be able to claim on that instead.

How does an insurance company determine the value of a stolen car?

To settle a stolen car claim your provider will offer you what it estimates your car’s market value was immediately before the theft (the amount you could have sold it for at that time). This is sometimes termed its actual cash value (ACV) and will take into account your car’s age, mileage and condition, as well as its make and model.

You don’t have to accept the offer if you think it’s unfair and your car’s worth more. You may want to look up car price guides yourself or search the ads for cars similar to yours to negotiate a better deal with your insurer.

If you took out a loan for your car, the ACV paid by your insurance may not be enough to pay off any outstanding finance. That’s where guaranteed asset protection (GAP) insurance can step in. This cover tops up the amount your insurer offers if it isn’t enough, so you can pay off what you owe.

Do I lose my no-claims discount if my car is stolen?

If you make a claim for theft, your no-claims discount (NCD) will usually be reduced by two years. That’s unless you’ve paid an additional premium to protect it (NCD protection). In which case it will be unaffected.

When could my claim be denied?

Most insurers won’t cover a claim for a stolen car if you were careless and left the keys (or other devices like keyless entry cards) in or on the car, or if you left the car unattended with the engine running.

A claim could also be rejected if you didn’t lock your car or if you left any windows, or the roof, open. Insurers may even check CCTV to check if this was the case.

Claims may also be refused if any security device fitted to your car by the manufacturer wasn’t operational when you left your car unattended. And, if it was a condition of your policy that you have a security or tracking device fitted to your car, then your claim could be denied if they’re not in working order.

Sadly, too, your motor insurance won’t cover you if you’re the victim of ‘theft by deception’. This is car theft where a trickster purports to buy your car, but an online payment or transfer never reaches your account. Or where a ‘buyer’ simply drives off with your car during a ‘test drive’.

If your car insurance claim is rejected and you don’t agree with your provider’s decision, you can dispute it with them or take your complaint to the Financial Ombudsman Service. It’s important that you gather as much evidence as you can to prove your case.

Five tips to help you reduce the risk of car theft

Security consultant and reformed burglar, Michael Fraser, has shared his top tips to help protect you against car theft:

1. Use the tech in your favour: You can get a signal blocking pouch or bag. It’s thin metallic lining - the same fabric used by law enforcement - blocks wireless signals from keyless car cloning devices, as well as wi-fi and mobile phone signals. So, when you put your keys inside, criminals will find it trickier to clone your key fob.

2. Protect the wheel: A steering wheel lock is an immediate red flag for a potential car thief.

3. Got a garage? Then use it. Sounds simple right? Well it is. Put your car in a fortress.

4. A tidy car is a safe car: Don’t draw attention to your car and fill it with half the contents of your house. Taking your phone or sat-nav out is a wise move.

5. Check it’s locked: Don’t make a burglar's job an easy one. It’s now common for cars’ wing mirrors to be folded in when locked, so it’s easy for savvy thieves to spot an unlocked target