Owning a car comes with the added responsibility of managing its performance and maintaining high security. In India, long-term car insurance for third-party liabilities is mandatory for all vehicles.

However, that alone is not sufficient to secure your car from unexpected situations like theft and vandalism. For this added financial and vehicle protection, you must explore car theft insurance coverage.

But does car insurance cover theft? The answer is yes. Let us discuss how it works, what it covers, and the various benefits of auto insurance theft coverage below.

What Does Car Theft Insurance Mean?

Car theft insurance is included in a comprehensive car insurance policy. With this coverage, you benefit from financial protection against the total loss of your car due to theft.

When you file a stolen car insurance claim, you either receive reimbursement for the lost car based on its value and policy terms or replacement assistance to buy a new one.

However, it is important to remember that the scope of coverage depends on specific policy inclusions, terms and conditions.

Moreover, this inclusion is only covered under a comprehensive or own-damage car insurance policy. Thus, you must assess your needs and understand the types of car insurance cover options to choose the right plan for your vehicle.

What is the Scope of Coverage under Car Theft Insurance?

The scope of coverage depends on the type of coverage you choose for your policy. Thus, the answer to the question, "Will car insurance cover theft?" depends on the type of car insurance policy you choose.

If you opt for third-party car insurance, the scope of theft coverage is not applicable. However, if you choose own-damage or comprehensive plans, you will get the necessary car insurance theft coverage in times of need.

The scope of coverage in these plans includes -

• Complete reimbursement based on your car’s Insured Declared Value
• Complete reimbursement based on your car’s market value (if you have the Return to Invoice add-on)
• Compensation for the stolen parts of the car in case of break-ins
• Cover expenses for damage repairs after your stolen car is recovered
• Cover expenses for repairs against damage incurred due to forceful entry attempts and theft

Benefits of Auto Insurance Theft Coverage

Financial Protection

Car theft insurance is a valuable investment for your car as it provides a financial safety net to protect your savings in case of an unfortunate event of theft or vandalism. With this financial assistance, you can recover from a significant financial loss of losing your car or repair expenses if the car is recovered with major damage.

Legal Support

Some insurance policies also offer legal assistance with car theft coverage. With this benefit, you can manage any additional legal expenses, such as attorney fees and disputes, that may arise during the resolution of your theft case.

Daily Lump Sum Allowance

Many policies also offer a daily lump sum allowance for your stolen or damaged car for a predetermined period to help you cover travel expenses or manage your daily commute without spending too much money on other transportation options. This provides you with ample financial coverage till your car gets repaired or you find a replacement.

Cover for Car Replacement

Based on your choice of policy and sum insured value, you might also get the benefit of a replacement car for a set period or due compensation to find a replacement vehicle in case of theft. This ensures you enjoy continuous mobility while your insurance claim settlement is completed.

Add-Ons for Increased Theft Coverage

You can customise your comprehensive and own damage car insurance plans with a range of add-ons. The list includes key replacement cover, Return to Invoice, total cover, loss of personal belongings and so on. This will help you claim all theft-related losses without any hassle.

Peace of Mind

A car insurance cover for theft protects you from unexpected circumstances resulting from car theft or vandalism. This ensures added peace of mind and confidence to drive around the country without the pressure of unforeseen situations that can lead to hefty financial burdens.

Step-by-Step Process for Car Theft Insurance Claim

Step 1 - Call the Nearest Police Station

The first thing you must do is go to the nearest police station to report the incident and file a First Information Report (FIR). This is one of the most crucial steps as you need to file a car theft insurance claim.

Step 2 - Contact the Regional Transport Office

In addition to the police station requirement for an FIR, you must also inform the nearest Regional Transport Office about the incident as soon as possible to collect the necessary vehicle documents to file a car theft insurance claim.

Step 3 - Notify Us

Inform us regarding the theft occurrence within 24 hours or earlier by calling our helpline number +91 22 4890-3009 (paid). It is crucial to update us as soon as possible so that we can get the necessary claim settlement in a timely manner.

Step 4 - File the Claim 

The next step is to file the claim with us by submitting the claim form along with the necessary supporting documents. You must ensure the correct submission of all the documents and accurate information on the claim form to avoid claim rejections or delays.

Step 5 - Claim Approval

Once your claim is registered and the necessary documents are submitted, we will evaluate the claim based on the information provided and make a decision based on your policy terms and inclusions.

Step 6 - Claim Settlement

The final step is claim settlement. If your claim is approved, we will reimburse you for the total loss of your vehicle, depending on the car IDV or market value, if you have the Return to Invoice add-on.

However, if your stolen vehicle is recovered with significant damage, you can take it to the nearest authorised garage for a cashless claim. We will settle your expenses directly with the garage once the repair work is completed.

Documents Required for Filing a Car Theft Insurance Claim

1. A duly filled and signed claim form.
2. Original car insurance policy document.
3. Previous vehicle insurance details.
4. Original vehicle registration book with a clear endorsement of theft from one of the RTOs.
5. First Information Report from the local police station.
6. Tax payment receipts of the car.
7. Additional vehicle documents - all sets of keys, warranty card, etc.

Factors Impacting Car Insurance Claim Settlements for Theft

• Vehicle’s Age - Your vehicle’s age has a direct impact on your claim settlements. The depreciation of the car parts in an older vehicle can result in a lower claim settlement than a new car’s claim.
• Policy Coverage - The policy-specific inclusions, exclusions and sum insured value also impact the claim settlement. For instance, if you opt for basic coverage, your claim settlement amount might be lower than when you combine more add-ons to the base policy for added coverage.
• Insured Declared Value - Your car’s insured declared value also affects the claim settlement amount. A higher IDV will result in a higher claim settlement and vice versa. However, remember that a higher IDV will result in a higher premium.
• Deductibles - Deductibles refer to the out-of-pocket expenses you will incur before your claim settlement amount kicks in. You can choose a lower deductible value to receive a higher claim settlement. However, this will also increase your car insurance policy premium.
• Timely Information—The time you take to inform the insurer also impacts the car insurance claim for theft. To reduce the risk of delayed claim settlements, it is necessary to notify the insurer in less than 24 hours after the event.
• Anti-Theft Devices - Your claim settlement can vary Depending on the type and number of anti-theft devices installed in your vehicle. If you have a higher number of anti-theft and security devices, your claim settlement amount may be higher and vice versa.

Reasons for Car Theft Insurance Claim Rejections

1. Incorrect Information - One of the most common reasons for claim rejections is providing incorrect information on your claim settlement form. It is crucial to maintain complete transparency and honesty when filling out the claim form to ensure applicable claim settlement in a timely manner.
2. Incomplete Documentation - Submitting incorrect or incomplete documents for a theft claim can increase your chances of rejection. Therefore, you must carefully collate all the necessary documents for the respective claim beforehand to reduce the risk of rejection.
3. Negligent Behaviour - Using the car for illegal activities, driving the car without a car insurance policy, RC or driving licence and carelessness with the vehicle at the time of theft can result in instant claim rejection.
4. Lapsed Policy - You must ensure your car insurance policy is valid at the time of theft and claim submission. A lapsed policy will result in a claim rejection, as you no longer have the necessary financial coverage.
5. Undeclared Vehicle Modifications - If you modify your car with various devices without informing the insurer, the chances of effective and timely claim settlement are reduced significantly. Therefore, you must keep the insurer informed about all modifications.
6. Fraudulent Claim - Filing an incorrect claim is a significant offence and will result in an instant claim rejection.

How to Reduce the Risk of Car Theft?

• Avoid leaving your valuables in the car when parking in isolated areas.
• Check your car locks before stepping out.
• Park in designated and secure parking spaces.
• Equip your car with a GPS tracker to reduce the risk of theft.
• Protect your car with a unique vehicle identification number to stop reselling your vehicle.
• Be watchful of your surroundings, especially if you are visiting or staying in a theft-prone area.
• To increase your vehicle's safety, you should use additional anti-theft devices such as an immobiliser, steering wheel lock, car door alarms, etc.

Conclusion

Car theft can cause a significant mental and financial burden. Thus, it is important to understand the role of car theft insurance in navigating such situations with a financial safety net.

Moreover, staying informed about the claim process and requirements, along with policy inclusions, can help you better plan your claim settlements in times of need. Focus on adopting safe driving and parking practices to reduce the risk of theft.

Reliance General Insurance offers a wide range of car insurance policies to cater to the specific needs of vehicle owners. Moreover, for maximum convenience, we offer ample customisation flexibility with various add-ons and online processes for policy purchases, renewals and claims.

Frequently Asked Questions (Word Count: 100-150)

Can I combine add-ons for theft with my third-party car insurance?

No, there is no provision for combining add-ons with third-party car insurance. This is because a third-party car insurance policy only protects you against expenses incurred due to third-party liabilities.

Is it necessary to submit my car registration certificate for a claim?

Yes, a vehicle registration certificate or RC book is a mandatory claim document for a claim request. Failure to submit the same will result in unnecessary claim delay until you submit it or instant claim rejection.

How long does a car insurance theft claim settlement take?

The duration of your car insurance theft settlement depends on multiple factors, such as the complexity of the claim request, submission of the necessary documents and additional document requirements.