How Long Does It Take for Insurance to Pay Out on a Stolen Vehicle?

February 20, 2024

With the number of stolen vehicles in the United States exceeding 1 million, it’s only natural that you will try to protect your car from theft at all costs, including buying insurance that can recover losses.

Speaking of stolen car insurance payouts, here are the most common questions:

  • What policy will cover theft?
  • How long does it take insurance to pay a claim?
  • What happens if a stolen car is found after insurance payout?

Read on to learn what you need to know about stolen car insurance payouts.

What Policy Covers a Stolen Car?

You need comprehensive insurance coverage to receive an insurance payout for a stolen car (around 79% of drivers have this policy).

Comprehensive insurance covers any damage unrelated to collisions: fire, natural disasters (tsunamis, hailstorms, hurricanes, etc.), and damage caused by falling trees or other objects.

How Is the Stolen Car Insurance Payout Calculated?

Depreciation of the carThe car’s depreciation is calculated from when the contract is concluded until its theft. The depreciation rate ranges from 12% to 20% per year, depending on the car’s age and insurance term.
Previous paymentsPrevious payments are taken into account if the insurance premium under the contract is aggregate (reduced by the amount of each payment).
DeductibleIf you have a policy with a deductible, the compensation is determined as the difference between the damage caused and the amount of the deductible specified in the contract

If you have any outstanding insurance premiums – the premiums you owe to the insurer but haven’t paid yet – they are also deducted from the car stolen insurance payout.

How Long Does It Take for Insurance to Pay a Claim?

The timelines for insurance to pay a claim related to theft are outlined in the contract and can vary depending on the following factors:

  • Investigation process: The insurance company conducts investigative measures to verify the theft and gather necessary information. The complexity of the investigation and the amount of supporting evidence can influence the duration of the payout process.
  • Insurance coverage: The terms and conditions of your policy determine the insurance payouts provided for stolen vehicles. Different policies may have varying waiting periods and requirements for filing a claim.
  • Documentation: Providing a complete set of documents (police report, vehicle registration documents, proof of ownership, etc.) is crucial for the smooth processing of claims.
  • Return of the vehicle: If the police find and return your stolen car before the claim is processed, it may affect the payout timeline. The insurer will need time to assess the vehicle’s condition and determine the extent of damage (if the car is damaged) before completing the claim review.

Each insurance company has its own internal policy and timelines for processing claims related to stolen vehicles. Therefore, contact your insurer to find out how long it takes for an insurance company to pay out a claim.

Take the initiative, provide all necessary documentation promptly, and maintain open communication with the insurance company to expedite the claim review process and quicken the payout.

What To Do If a Stolen Car Found After Insurance Payout

It’s not uncommon for the insurance company to pay the full compensation amount to the owner of the stolen vehicle, only for the police to subsequently find it.

In such a situation, the returned vehicle becomes the insurance company’s property, but all personal belongings and items found in the car will be returned to the owner. However, if you haven’t spent the money received from the insurance company to purchase a new car, you have the option to return the funds and retrieve your vehicle.

Cases When Stolen Car Insurance Won’t Pay Out

Car owners often assume that if their car is stolen, insurance will cover the damages. However, not all theft cases obligate the insurer to make a payout.

Here’s when you may not receive a stolen car insurance payout:

  • If the theft occurred due to the deactivation of the anti-theft alarm or the cancellation of the satellite security system subscription, provided that the presence of this equipment is stipulated in the insurance contract
  • If the theft was intentional to receive a stolen car insurance payout
  • If the owner failed to submit documents to the insurance company on time, changed the license plates on the vehicle without notifying the insurer, etc.

To avoid issues with your stolen car insurance payout, make sure to follow the terms of the contract and rules established by the insurer.

What To Do If Your Car Is Stolen

Step 1 – Call the Police

The first step is to report the car stolen to local law enforcement authorities, providing them with all necessary information: your car’s make, model, license plate numbers, VIN, distinguishing features like color, modifications, stickers, dents, etc.

Step 2 – Report the Stolen Car to the Insurance Company

Inform your insurance company within 48 hours of the theft. They will guide you through filing a claim and collecting the necessary documentation.

Step 3 – Prepare the Documentation Package

Gather all necessary documentation related to the stolen vehicle: registration documents, ownership documents, records of maintenance and repairs, etc. These documents will help you confirm your ownership rights and the car’s value.

Step 4 – Notify Your Lender

If you financed the stolen car and haven’t paid off the full amount, promptly inform your lending company about the theft. They may require specific documents and will advise you on further steps.

Step 5 – Inform the Department of Motor Vehicles (DMV)

Contact your local DMV to report the stolen car. They will make the necessary changes to the records and provide you with all required documents and forms.

Step 6 – Take Self-Search Measures

Informing relevant authorities doesn’t restrict you from conducting your own search:

  • Spread information about the theft on social media and other relevant platforms
  • Check if there are surveillance cameras at the theft location or on routes leading to it
  • Visit nearby car markets and garages
  • Monitor online advertisement boards and track online car markets

By taking these steps promptly, you’ll assist law enforcement in finding the stolen car, provide your insurance company with the necessary information for claim processing, and protect yourself from liability associated with the theft.

How To Prevent Car Theft

Last but not least, it’s always better to protect your car from theft than dealing with theft consequences.

Here’s what you can do to prevent car theft:

Frequently Asked Questions

How long does an insurance claim take to pay out?

The average deadline for a stolen car insurance payout is around 30 days. However, the timelines vary depending on the policy.

If my car is stolen, do I still have to make payments?

Car theft doesn’t release you from financial obligations on the loan or lease. If you stop making payments, it may cause problems with your credit history and legal consequences.

Will comprehensive insurance cover personal items left in the car’s cabin?

Comprehensive policies only cover damage to the car resulting from theft and other non-collision incidents. You need to purchase additional coverage to get compensation for personal items left in the stolen car.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to American REIA. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At American REIA, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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