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Does Liability Insurance Cover Theft?

Hand stealing laptop from back side of car which rear glass broken

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Having one’s car stolen can be a very traumatic event. Apart from having your privacy invaded, losing your vehicle directly impacts your ability to execute your daily responsibilities and activities. Finding out that your current insurance doesn’t cover theft is the last thing you need when you’re already stressed.

To prevent such a situation, it’s best to inform yourself regarding what your insurance covers before any unexpected events occur. Liability insurance, for instance, doesn’t cover the loss of your vehicle due to theft. To find out more about liability insurance, and also other types of vehicle insurance, read on.

What Is Liability Insurance?

Taking out a certain amount of auto liability insurance is compulsory in all states and is regarded as the minimum coverage needed by motorists. The amount of coverage required varies from state to state, though. Auto liability insurance basically protects the other party when you cause an accident.

Liability coverage consists of two types of insurance, which are the following:

  • Bodily injury: This liability insurance covers the medical expenses of the other party when you’re at fault. Depending on the coverage, the lost wages and legal fees of the other party may also be covered.
  • Property damage: This liability protection covers any damage to property that you may have caused during an accident. Apart from the other party’s vehicle, this insurance also covers things like fences, phone poles, or any structures that you may have crashed into during an accident.

Looking at a real-life example may be useful. Let’s say you’re tired and not concentrating properly when you arrive at a four-way stop. Because you’re not focusing, you enter the intersection when you’re not supposed to and collide with another car. Since the accident is your fault, your liability insurance will pay for the repairs of the other vehicle and also for any medical treatment the other party may need.

However, your insurance will only pay out up to your covered limit. In addition, liability insurance only covers accidental damages. If you lose your temper and smash the window of somebody else’s vehicle, liability insurance will not pay for the damages.

Does Liability Insurance Cover Car Theft?

You might be wondering if liability insurance covers car theft. Unfortunately, it does not. It also doesn’t provide cover for:

  • Any damages to your vehicle as a result of a break-in, such as broken windows or a damaged ignition system.
  • Any items that were stolen from inside your vehicle during a break-in.

If you’d like to insure your vehicle against car theft, you need to take out comprehensive coverage over and above your liability insurance. When your vehicle is stolen, your comprehensive insurance will pay out the actual cash value of your vehicle.

Apart from vehicle theft, comprehensive insurance provides protection against any damage your vehicle may incur due to a non-collision event. Such events may include vandalism, natural disasters, accidents in which animals are involved, or glass and windshield damage.

In general, the limit on comprehensive coverage is the actual cash value of your vehicle. The only amount you’ll need to pay when claiming from comprehensive insurance is the deductible.

Collision Insurance

While comprehensive insurance will pay for damages to your vehicle in the event that you hit a deer, it will not pay out if you swerve to miss the deer and hit another vehicle or a pole, for instance. As stated above, comprehensive insurance only provides cover for non-collision-related events, such as vehicle theft.

In the event that you collide with another vehicle or a pole, you’ll have to claim from your collision insurance, which is another optional coverage over and above your basic liability insurance. Collision insurance will pay out toward damages to your vehicle, whether the accident is your fault or not. In the event that you drive into a fence and it’s due to negligence on your part, your collision insurance will cover damages to your vehicle, while your liability insurance will pay for damages to the fence.

Here’s an example. You swerve to prevent hitting a deer and drive into a phone pole. The deer is alive and well but, unfortunately, your car is totaled. Also, the phone pole is damaged. Luckily, you have taken out collision insurance over and above your liability insurance. Your property damage insurance covers the damage to the phone pole and your collision insurance pays out the value of your vehicle. All you need to pay is the collision insurance deductible.

Other Types of Insurance

Although you may think that you’re covered against any unforeseen eventualities with liability, comprehensive, and collision insurance, this is unfortunately not always the case. For instance, in the event that somebody breaks into your car and steals personal items, comprehensive insurance will cover any vehicle damage. However, you will need to claim for the stolen items from your homeowner’s or renter’s insurance policy. Here is a short overview of other types of coverage you may want to consider:

  • Underinsured motorist insurance: When you’re insuring your vehicle, you need to consider the coverage that other drivers on the road may have. In the event that another driver causes an accident in which you are involved, underinsured motorist insurance will provide you with protection if their insurance is not enough.
  • Uninsured motorist insurance: Uninsured motorist insurance is similar to underinsured motorist insurance. This type of insurance will provide you with protection in hit-and-run scenarios and also when another driver has no insurance at all.
  • Medical payments coverage: In the event that you or any passengers inside your vehicle experience serious injuries after an accident, this insurance will help to cover medical costs, and also funeral expenses if somebody dies.

Although all the different types of vehicle insurance coverages that are available to you can become quite overwhelming, it’s important that you understand precisely what you’re covered for. In this way, you can prevent any unwelcome surprises when the unforeseen happens. If you don’t know where to start, it’s best to start from the bottom and work your way up, by first taking out liability insurance and then adding coverage to your policy, such as comprehensive insurance to cover theft, as you see fit.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.


About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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