No auto insurance? Here’s what happens if your car is stolen

Car theft rates continue to rise nationwide, with over a million vehicles stolen in 2023 alone, according to the most recent data available from the National Insurance Crime Bureau (NICB). Experts predict these numbers will increase in the coming years. 

If you don’t have insurance and your car is stolen, you will be solely responsible for the full vehicle replacement cost. If you want to ensure you’re financially protected against car theft, you’ll need to add comprehensive coverage to your car insurance policy. Comprehensive is the only type of coverage that pays out for car theft. 

What to do if your car is stolen and you don’t have auto insurance

You’ll need to take certain steps if your car is stolen. 

Contact law enforcement 

“You should always file a police report after your vehicle is stolen, regardless of insurance coverage. However, you will not have any auto insurance coverage for the loss without comprehensive coverage on your policy,” says Mark Friedlander, spokesperson for the Insurance Information Institute (Triple-I). 

Even if you don’t have insurance, the police may be able to help recover your car. However, even if you recover the vehicle, you will have no insurance coverage for any damage caused by the perpetrators, according to Friedlander. 

What you’ll need:

• Detailed account of what happened 
• GPS information (if your vehicle has one)
• License plate number
• Make and model
• Vehicle registration number (VIN)

The police will log your VIN, make and model, and license plate number into a database that tracks stolen vehicles. If your car has a GPS, it can be tracked. Make sure you let the police know and provide any needed GPS account information. 

Notify the DMV or similar agency

Reporting your stolen car to the police may suffice, but it depends on your state’s requirements. You should consider contacting the DMV to let them know your car was stolen and notify them if it is recovered. This ensures the state knows you do not have the vehicle and prevents liability for any potential fraud or criminal activity. Depending on your state, you may be required to fill out certain paperwork to report the theft. 

What if you have a car loan?

Carrying full coverage auto insurance is required by your car loan agreement. If you drop coverage, you’re breaking your contract with the lender or financer. This could be grounds for a lawsuit if you don’t have the funds to pay off the rest of the loan. If this is your situation, you should seek legal counsel. 

How auto insurance covers car theft

You’ll need comprehensive coverage to file a claim for car theft. If you have a car loan or lease and owe more than insurance will pay, gap insurance may also help. 

Here’s how it works:

• Comprehensive coverage: You cannot file a car theft claim without comprehensive coverage. This coverage is part of a full coverage auto insurance policy. “According to the Triple-I, approximately 75% of U.S. drivers carry comprehensive, which covers theft, vandalism, engine fires, severe weather hazards, falling objects, and striking an animal. Comprehensive is typically required by your lender when you have an auto loan or lease,” says Friedlander. 
• Gap insurance: “Gap insurance is typically required when you lease a vehicle and can also be purchased when you have an auto loan. It provides some coverage if your stolen vehicle is declared a total loss by your insurer. Specifically, gap coverage will pay the difference between what you owe on your car and its depreciated value. However, gap coverage is not a replacement for comprehensive coverage and will not provide you with the current market value of the stolen vehicle,” says Friedlander. 

It’s important to keep in mind that comprehensive coverage requires a deductible. For example, if your deductible is $1,000, then $1,000 will be subtracted from your overall claim payout. It will only pay out for your car’s actual cash value based on its condition before the loss.

What insurance covers stolen personal belongings?

While comprehensive insurance can help replace your stolen car, it will not pay for any stolen personal belongings inside the vehicle. If your laptop was in your backseat and the thieves took it, for instance, you couldn’t file a car insurance claim for laptop reimbursement. 

Home and renters insurance personal property coverage extends to off-premises items. Contact your home or renters insurance company if your personal property was stolen out of your car. 

How to prevent car theft and reduce insurance costs

You can do several things to prevent the likelihood of car theft, and some may even result in car insurance discounts. 

Auto insurance options to protect against theft

• Anti-theft devices. Installing anti-theft devices, like alarm systems, steering wheel locks, and smart keys, can make it harder for thieves to steal your car. Insurance companies may give you a discount if your car has these built in or if you install them.
• GPS trackers. GPS trackers can provide real-time data to law enforcement to help track your vehicle. An insurance company may also offer discounts for GPS and other tracking systems.

Car insurance discounts

Several other ways to lower insurance costs exist, including bundling auto and other policies, like home, under one insurance company. 

You may also qualify for car insurance discounts, like:

• Accident-free
• Claims-free for a certain number of years
• Driver’s education course
• Good driving
• Good student
• New car
• Paperless billing
• Paying-in-full
• Student-away

Is comprehensive coverage worth it for theft protection?

It can be hard to estimate how much comprehensive insurance costs versus the financial impact of your car getting stolen. That said, a full coverage auto insurance policy costs around $158 a month, or $1,896 annually. 

Car insurance costs vary by the type and age of the vehicle, discounts you qualify for, the ZIP code you live in, your driving history and more. How much a vehicle theft loss will cost you depends on your car’s current market value. However, the overall financial impact will vary from person to person. 

Consequences of car theft without auto insurance

The consequences of car theft when you have no auto insurance — or specifically comprehensive coverage — can be severe. 

• Repair costs. If your car is recovered, but you have no auto insurance, you won’t be able to file a claim for damage to your vehicle, like if smashed windows or a stolen your car radio. You’ll have to pay for all the repairs to your recovered car. 
• Replacement costs. If your car is never recovered and you have no comprehensive coverage, you’ll have to buy a new vehicle. 
• Loan balance. Most lessors require a full coverage auto insurance policy if you lease or have a loan on your car. If you do not have comprehensive coverage, you’ll still be stuck paying for the remainder of the loan. 
• Legal situations. If you cannot afford to pay your loan or broke your contract by not having a full coverage policy, your lender may take legal action to recoup their losses. If this is your situation, it may be best to contact a lawyer. Delinquent payments can also affect your credit report.  

Importance of auto insurance for theft protection

We recommend purchasing a full coverage auto insurance policy to ensure you’re financially protected from most risks. Comprehensive is especially important as it is the only type of car insurance coverage that includes claim reimbursement for car theft. 

Going without comprehensive coverage, or auto insurance in general, is not a great idea. Nearly every state requires you to have liability car insurance to drive on the road legally. If your vehicle is stolen and you don’t have comprehensive coverage, it can lead to severe financial hardship, as you’ll be responsible for all associated costs.