Does Homeowner’s Insurance Cover Car Theft?

Every year, hundreds of thousands of cars are stolen in the United States. Many of these thefts occur on side streets in high-crime neighborhoods. However, over 100,000 cars are stolen from private residences on an annual basis. A disturbing proportion of these so-called "driveway thefts" occur when the vehicle's owner is at home.

If you're worried that your car will be stolen, you must obtain "comprehensive vehicle coverage" from your insurance provider. Unlike uninsured motorist insurance, comprehensive insurance is not mandatory. In fact, it's often quite pricey. If you live in an area with a high rate of vehicle theft, your vehicle's comprehensive coverage will be far more expensive than run-of-the-mill auto insurance.

However, it's important to remember that comprehensive coverage also covers damages or losses that stem from other kids of criminal activities. If you obtain comprehensive insurance, you won't have to worry about paying to repair or replace broken car windows, stolen audio equipment or missing aftermarket parts.

The cost of comprehensive insurance varies widely according to a few key factors. The most important of these is the physical location in which the car is garaged. Your insurance company will use your home ZIP code to determine the likelihood that your vehicle will be stolen or vandalized. In addition, comprehensive insurance tends to be more expensive on new or used vehicles that were purchased using a loan. In fact, many vehicle lenders require their customers to obtain comprehensive insurance.

If you own your vehicle outright and would prefer not to obtain comprehensive insurance, your vehicle may be covered under your homeowner's insurance policy. If you keep home furnishings or accessories in your car, your homeowner's insurance policy may permit you to treat your car as an "extension" of your home.

In certain key situations, your homeowner's insurance policy may provide better protection than your comprehensive policy. Most comprehensive policies explicitly exclude valuable items like jewelry and clothing accessories from coverage. This is why your car insurance policy contains a disclaimer that warns you to remove all valuables from your car when it's not in use.

By contrast, some homeowner's insurance policies cover the costs associated with replacing stolen valuables regardless of where the theft occurred. If your homeowner's policy doesn't contain such a provision, you may be able to obtain such coverage by taking out a "rider" on specific valuable items. For instance, many policyholders use riders to protect expensive engagement rings, handbags or wraps.

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