Holiday Heist: Does Car Insurance Cover Theft of Personal Items?

Holiday Heist: Does Car Insurance Cover Theft of Personal Items?

With trees lit and wreaths hung, everybody now knows that the holidays are here—including thieves. These so called grinches target shopping mall parking lots, and even your own driveway, searching for expensive gifts to lay under their own Christmas trees.
A shopper puts gifts in her car

Each year, more than $1 billion in personal items are stolen from car break-ins, in nearly 2 million thefts. A significant portion of those thefts occur between Thanksgiving and Christmas, as busy holiday shoppers rush to finish their holiday shopping. Take, for example, Marci Moriarty who had her car broken into while it was parked in her quiet cul-de-sac. In her car, Marci had more than $1,500 worth of toys, coats, and gift cards she had bought to provide a special Christmas morning to ten cancer patients who had been admitted to a local children's hospital. Unfortunately, a thief spotted the items through the car window and made off with the gifts.

Typically, thieves favor discreet areas with plenty of potential targets, such as parking garages. There, dozens of car break-ins can occur in a matter of minutes, and unless cameras or witnesses can identify the thief, you stand little chance of having any stolen items recovered.

Will car insurance cover stolen items from my car?

People often assume their auto insurance will reimburse them for the cost of items stolen from their cars. Unfortunately, that’s a misconception. Even if you you have comprehensive car insurance, your policy will cover only the theft of items that were a permanent fixture of the vehicle—such as its steering wheel or seats. It may also reimburse you for damage done directly to your car during the gift grab, such as a smashed window—if you've satisfied your policy's deductible. But any outside items stored inside the car, such as gifts or a laptop, will not be covered.

However, most homeowners or renters insurance policies do cover the theft of personal items, even if those items weren't physically in your home when they were stolen."Off-premises theft is included with your renters [or homeowners] policy—contents will be covered worldwide [for] 16 perils (fire, theft, explosion, etc.)," said an All State agent.

But unfortunately, the deductible you'll need to meet before your insurance provider steps in to offer any reimbursement will likely put a crimp into your plans. With those deductibles typically ranging between $500 and $1,000, the value of the stolen gifts would need to be high indeed before filing a claim would make much financial sense.

For example, let's say you have a $500 deductible on your renters insurance policy and somebody steals items from your car; you'd need to have had at least $501 stolen from your car in order to receive a single dollar in reimbursement. This wouldn't be worthwhile, since you'd risk increasing your policy's premium after the claim. But if you lost a laptop or other high-value electronics, filing a claim may make sense.

Don't let thieves ruin Christmas

Since your insurance policy usually won't be much help, it's a good idea to be cautious around the holidays. If at all possible, avoid leaving high-value items in your car. If you must, try storing them in the trunk or out of view of any passersby, so they won't be tempted by the packages.

You should also be conscientious about where you park. The shopping mall parking garage may protect your vehicle from the snow, but it also provides cover for thieves. Instead, do your best to park in an open, well lit area near the shopping mall's doors. The more foot traffic you'll have around your vehicle, the less likely a thief is to break into your car. Finally, if theft is a problem in your area, consider installing a dashcam capable of capturing video evidence of thieves attempting a car break-in.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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