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
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
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
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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