Does car insurance cover car theft?

Vehicle thefts are among some of the most underreported crimes in India, with over 100 vehicles stolen every day in some urban areas. In Delhi alone, over 40,000 cases of motor vehicle theft were reported in 2018. The situation isn’t that much better in rural areas and tier-II cities either. And unfortunately, in many cases, stolen cars are never recovered.

A situation like this can have a considerable impact on your finances if you do not have an insurance policy. However, it is crucial to understand that just any policy will not help here. A mandatory third party car insurance policy can shield car owners in critical circumstances such as a road accident that causes injury to other road users. But a comprehensive plan is what you need if your car is stolen and you have to file a claim for it.

What’s covered by a car insurance policy?

Leading insurance providers offer two types of insurance policies: liability only policy (third-party) and package policy (comprehensive). Car insurance companies cover third-party damages up to a certain amount. In case of a comprehensive policy, car theft and personal accident damages are also covered. The plan also offers add-on depreciation cover, no-claim bonus (NCB) protection, etc.

Some policies will give you a daily allowance if your car is stolen- which means that they will pay for the cost of a hired vehicle for a period as specified in the policy. Your policy could also provide for courtesy/hire car within 24 hours of the theft of your vehicle.

Also, remember that partial theft of accessories is covered under the no claim bonus in some policies. This means that even if some car accessories are stolen (you can refer to your policy wordings for the complete list), you can claim insurance for them without it affecting your no-claim bonus.

Filing a claim if your car is stolen

In the unfortunate event that your car gets stolen, having a package policy or car insurance can be of great help. You need to file a claim to get the maximum value of your car.

Here’s how you should proceed:

1. File an FIR

The moment you find out that your car has been stolen, you should inform the police immediately. Early lodging of an FIR will benefit you in two ways:

• it will help you get the claim accepted by the insurance firm, and
• your vehicle may also get recovered sooner.

2. Inform the insurance provider

Fill and sign the claim form provided by your insurance firm. You can attach the FIR as you submit the form. Step 1 and 2 should be performed simultaneously. An FIR is not mandatory at the time of informing the insurance company, but it will be required when you have to submit the car insurance claim form.

3. Notify the RTO

It is recommended that you inform the Regional Transport Office (RTO) about the theft of your car to safeguard yourself from any criminal activity conducted using your vehicle. This way, in case your car is involved in a mishap or used for illegal activity, you will be in the clear. You will be required to furnish the vehicle’s Registration Certificate (RC), a copy of the FIR, a copy of your driver’s licence, and the claim form.

4. Keep the following documents ready

• Copy of police FIR
• Copy of vehicle’s RC
• Filled and signed claim form
• Copy of driver’s licence
• Copy of policy documents
• Original keys of the car
• Signed RTO transfer papers (forms 28, 29, 30)
• If there is an ongoing car loan, NOC and form 35 from the financer

While your car getting stolen is the last thing you think may happen to you, it always helps to be prepared to face this problem and know what to do in case this happens. Ensure your auto insurance is updated, read the fine print to make sure you have the right car insurance add-ons so that you are covered in case of any eventualities.