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Your Stolen Car and the Insurance Process

By Len Mosco – Licensed New Jersey insurance agent for over 30 years

Sometimes, even if you have done all you can to protect your car from being stolen or vandalized, it can still happen. What can you expect if this does occur? In my 30 years of experience in dealing with all sorts of auto insurance claims in New Jersey, I have come to recognize that there is usually no worse feeling than the feeling of walking up to where you parked your car only to find it missing. Your first thought is that it may have been towed for some reason. Depending on where you parked your car, this could be a possibility. Unfortunately, when cars are parked in shopping center parking lots or other large, open parking facilities, the missing car is usually the victim of a car thief.

Step 1: Call the Police to report the theft

Report a stolen car to the police and then contact your insurance company promptly.

If you feel your car has been stolen one of the first things you should do is to call the police as quickly as possible. Once they arrive, give as much detail as possible to the officer. Information like the approximate time you parked the car, how long you were away from the car and anything strange or different that you may have noticed on, near or around your car.

If there was anything that you left in the car such as a cell phone, electronic device, a purse or briefcase or any item at all, always tell the police officer so they can list this information on the police report. If your car was towed for some reason, usually the towing company will notify the local police to avoid the confusion of a stolen car.

Step 2: Contact your insurance company - provide all the details

Once the police have come out and the determination is that your car was stolen, you should immediately try to call your insurance carrier or agent. When you initially speak with them, be as precise as you can in explaining the details of how everything happened. You will eventually be speaking with an insurance claims adjuster regarding the theft of your car. It is not unusual for the insurance claims adjusted to take a recorded statement from you. This is the usual process of documenting your specific incident.

At times it may feel like you are being asked odd questions such as, "Did you leave your keys in the car?" or "Do you know of anyone who would have wanted to steal or vandalize your car?" Don't take offense to these types of questions. Unfortunately, there is a lot of insurance fraud that exists so the insurance carriers usually ask some "tough" questions mainly to identify any inconsistent responses. Once you have given your statement to the insurance adjuster over the phone, they will usually also send you a claims form to fill out. Again, be as precise as possible with your answers on the form.

Next Step .... You wait

OK, you have cooperated with the police and your insurance company by answering all of the questions and filling out the forms. Now what? Usually, you wait. Yes, the insurance carriers in most states usually wait until a specific time period has passed (usually 20 days or 30 days). The reason for this is that there are many times when a stolen car is actually recovered by the police. The insurance carriers will usually check with the local authorities every few days to see if your car has been recovered. There are times that a car can be recovered with little to no damage.

If a car is recovered with moderate or extensive damage, unless it is considered a total loss, your insurance company will usually pay for the repairs, minus your deductible. If your car is recovered and the damage is very extensive, your car may be deemed a total loss. A total loss usually means that the car is not safe to repair or that the damage amount would exceed a large percentage of the actual value of the car.

Working with the insurance company on the claim

If your car is recovered and is considered a total loss or if it is not recovered at all, your insurance carrier will usually offer a settlement to you that would be equal to the "book" value of your car at the time of the loss. Some factors that can affect the book value of a car are its age, its condition and mileage. If there is a loan on your car, the insurance carrier will usually pay off the loan company and if there is any additional money left beyond what the loan balance was, that money would be issued to you. At times, the balance of a car loan can exceed the book value thus the settlement from the insurance company may not be enough to completely pay off the car. This usually occurs when a small deposit was put down on the loan at it's inception and the depreciation of the car has caused its book value to be low. Unfortunately, you can be responsible for the difference of what the insurance carrier has paid you and the balance still owed to the loan company. This is similar to a home being worth less than is owed to the mortgage company due to home values being down. This is sometimes known as negative equity and this can happen with car loans also. If your insurance company settles with you and you do not have a loan on your car, the entire settlement, minus your deductible, will be paid to you.

Did you know that some insurance companies may completely replace your stolen or totaled car with a brand new one, even a newer model year, if you car has been stolen a very short time from when you have purchased it (for example 1-2 months). The insurance carrier feels that you have basically lost a brand new car so they will usually replace it with a brand new one.

Will a claim for a stolen car affect my car insurance premium?

A couple of interesting things to note. Firstly, having anti-theft devices on your car (e.g. a car alarm) will not mean you get more money back or get it more quickly in the event of a claim. Secondly, in most cases New Jersey auto insurance companies will not increase your premium due to a claim arising out of having your car stolen. However it is always best to confirm this with your own insurance agent or carrier.

In the unfortunate event your car is stolen, usually if you cooperate with your insurance carrier and be patient with the sometimes tedious claim process your insurance company will usually do all it can to move the settlement along smoothly and as quickly as possible.

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