Imagine this: you wake up in the morning after an overall stressful day—you are going through your daily routine: shower, get the kids ready for school, get dressed, breakfast, grab your car keys and as you are walking out to your parking spot, you get this feeling. Something is not right. As you get closer to where your car should be, you discover it is not where you parked it the night before —your heart starts to beat fast. It is nowhere to be seen; all that is left is space. You asked yourself, what will I do? Is my car a high-risk theft car? Does insurance cover stolen cars? Do I know how the theft auto insurance process works? Through the confusion and rush of adrenaline, you need to stay calm and think clearly.
Do High-Risk Car Theft Increase Insurance Rates?
Auto insurance companies base all their insurance rate calculations on risk. Thus, a car declared to have a higher risk of theft implies a higher insurance rate on such vehicles. So, if by choice or chance, you live in an area where car theft is high, then that can shoot up your insurance rate, even if your street or house is secured and pretty safe! This high insurance rate resulted from Bank Negara Malaysia’s decision in 2017 to liberalize motor insurance tariffs. This decision legally permits insurance companies to increase insurance premiums for vehicles often targeted by car theft syndicates, considered high-risk theft vehicles.
Does Insurance Cover Car Theft?
That depends on the policy you’re currently carrying. Typically, you must hold a third-party fire and theft or comprehensive coverage on your auto insurance policy to cover your stolen car. If you only have a third-party auto insurance policy to save money, then you are out of luck if a vehicle is stolen. If you have the required policy (i.e., third-party fire and theft or comprehensive approach) for your stolen car and you file a claim, your insurance company will cover the car’s actual cash value and not the total replacement value. If the car is recovered and you realise it’s been damaged, or some parts have been stolen, your insurance company will pay to replace any stolen parts, such as the airbag or catalytic converter, and cover the repair cost.
However, you should note that your insurance policy won’t cover personal items stolen from your car or the cost of cleaning the car (let’s say the robbers have been sleeping in it) after recovering. More so, if personal items like a laptop, phone, money, etc., get stolen, your insurance policy won’t pay to replace them. However, you can file a claim with your renters or homeowner’s insurance for stolen personal items. Your insurance will also not cover the cost of renting a car during the process of getting your claim resolved.
If you are not sure of your insurance coverage covers, learn about auto insurance by speaking with your agent or reading about it online. Having a clear understanding of how your insurance policy works before a claim situation arises will save you from stress and time. Also, ensure to go over your auto insurance coverage altogether at every renewal to make sure you have the best policy suited for your needs.