Car theft is on the rise across the country. According to the National Insurance Crime Bureau, over 1 million vehicles were stolen in 2022, representing a 7% increase from 2021. If your car is stolen or vandalized, will your car insurance cover replacement or repair costs? Whether or not your car insurance covers theft will depend on the type of coverage you carry.
Although required in nearly every state, liability insurance does not cover car theft. In these situations, you’ll need comprehensive coverage, which is typically optional when buying a policy. Let’s explore these coverages and how insurers handle theft so that you’re prepared for the unexpected.
Does My Car Insurance Cover Theft and Vandalism?
If your car is stolen or vandalized, you’ll need a type of coverage called “comprehensive” to cover repair or replacement costs. With comprehensive coverage, you’ll receive a payout equal to your vehicle’s actual cash value (ACV) at the time of theft if your car is stolen and not recovered. If your car is recovered but with some damage, your insurer will pay up to your vehicle’s ACV for repairs.
Comprehensive coverage will also cover stolen or vandalized car parts installed on your vehicle from the manufacturer, such as catalytic converters and key ignitions. However, it won’t cover custom or aftermarket parts you install yourself, such as a high-tech sound system or custom rims. To cover custom parts or equipment, most insurers offer a separate type of coverage exclusively for custom add-ons.
When you file a comprehensive coverage claim for a stolen or vandalized vehicle, you’ll have to pay a deductible. A car insurance deductible is an out-of-pocket amount you must pay towards an insurance claim before an insurer covers the rest (up to your policy’s limits).
Does Car Insurance Cover Stolen Personal Belongings from My Car?
Unfortunately, a comprehensive claim will not cover any personal belongings inside a stolen vehicle, such as a laptop, purse, or cell phone. However, you can file a claim for personal property stolen from your car through your homeowners or renters insurance policy.
Personal property coverage through residential insurance can apply in a wide range of scenarios, both in and outside of your residence. Still, coverage limits and deductibles may apply, so always double-check with your policy or agent.
Insurance Coverages and Auto Theft
Here’s a summary of insurance coverages and how they apply if your car is stolen or vandalized:
Insurance type
What it covers
Comprehensive insurance
– Damage to your car not caused by an accident. – Stolen car and vandalism. – Stolen stock car parts, such as catalytic converters. – Damage to your vehicle due to theft.
Homeowners or renters insurance
– Can cover personal property that was inside a stolen car.
Gap insurance
– Will cover the difference between what your car is worth and how much you have remaining on your car loan.
Rental car reimbursement coverage
– Will cover rental car costs while you wait for your vehicle to be recovered or repaired, up to your policy’s limits.
What to Do When Your Car is Stolen
Walking out to an empty space where you expected your car to be is scary. However, before contacting the police, you’ll need to confirm it was stolen and not towed or repossessed. If you’re on top of your payments, you can rule out repossession, but were you parked illegally? Most parking lots and private locations have signs that list a phone number you can call to find out if your car was towed.
Once you rule out all other possibilities, contact the police to file a police report immediately. The sooner you provide the police with your vehicle’s information, the better your chance of it being recovered. After filing a police report, contact your insurance provider to begin the claim process. If possible, obtain a copy of the police report for your insurer.
Speak to A Car Insurance Specialist
With so many coverage types available, car insurance can sometimes seem a bit confusing. Thankfully, AIS insurance specialists are here to help. Whether you’re purchasing a new car or want to review your current coverage, our team can answer any insurance questions you may have, including whether you are eligible for an anti-theft device discount on your rates. With over 55 years of experience, we’ll work with you to build a policy that meets your budget and needs. Call us today at (888) 772-4247 to learn more.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
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Businesses of all sizes will continue to face challenges arising from the persistent cycle of economic uncertainties that include inflation, geopolitical headwinds, environmental disasters and capital constraints.
These trends in combination with changes to assessing potential risks, are forcing commercial insurers to address four critical challenges — which affect coverages and rates for businesses.
The insurance market is currently in flux. Rate softening, rate stabilization and rate hardening are all happening simultaneously in different lines and sublines of coverage. Insurers are readjusting on the fly to competitive pressures as they look to maintain and grow market share without losing profitability. Inflationary costs from losses already suffered and uncertainty in forecasting for future claims severity and frequency are adding complexity to underwriting risks.
Risks are undergoing rapid evolution, particularly in the areas of natural catastrophes, net-zero emissions transitions, supply chain, emerging risks, disruption of traditional industries and cyber risks.
The increasing and unstable rates observed during January 2023 renewals have added to the uncertainty surrounding tightening capacity in both traditional and alternative (re)insurance markets.
In order to navigate the evolving landscape of risks, commercial insurers must recognize the significance of talent acquisition. They need to proactively enhance their capabilities and attract skilled individuals in a labour market that is becoming increasingly competitive. This is particularly crucial as underwriting and claims processes transition from being based on intuition and experience.
Trends Impacting the Marketplace Throughout 2023
Inflation and volatility is impacting property values and leaving many businesses underinsured.
Environmental disasters are happening more frequently and, as a result, (re)insuring properties in impacted areas has become challenging.
Cyber incidents continue to be the number one risk facing businesses around the world.
Global supply chain disruptions continue to be an issue and are impacted by geopolitical risks, such as the war in Ukraine.
Environmental, social and governance policies and principles are having a more direct impact on assessing a company’s liability risk and potential exposures.
Managing Your Risks
As the market continues to recover from the impact of COVID-19, new economic uncertainties are arising that will have a direct impact on insurance rates. We have identified five trends that could impact your insurance throughout 2023.
Inflation & Economic Uncertainty
We’ve all felt the impact of inflation throughout the past year, whether at the grocery store, higher utilities or the rising costs of property (seen most acutely in the commercial property market).
The cost to rebuild and replace property or inventory following a loss is continuing to spiral. We are seeing rising prices and supply chain issues, as well as extended repair times due to a lack of labour availability. When you couple the rising cost of materials with labour market disruptions and supply shock, the costs of claims borne by insurers are substantial.
This means that when a catastrophe strikes, the price to rebuild and restore can skyrocket, leaving even conscientious individuals and organizations at risk of being underinsured.
What you can do:
Consider using a professional appraiser or engineer to determine your property value. Professional appraisals provide a higher degree of certainty in relation to existing building conditions and the cost to rebuild. Engineers can also help identify potential hazards, provide estimates around foreseeable loss costs and make risk control recommendations.
Accurately value your inventory to reflect the rising costs of goods.
Consider your business interruption exposure in the event of an incident. With supply chain shortages resulting in longer lead times, coupled with labour and material shortages, the time needed to rebuild following a loss will now take longer — meaning a company’s ability to earn revenue could be disrupted for a longer period.
Create backup plans for equipment and machinery failures as new parts may not be readily available.
Use inflationary cost trends for incremental increases to help determine the value of your assets.
Natural Disasters & Catastrophic Losses
The impacts of climate change continue to be felt globally as devastating “once-in-ten-year” weather events continue to increase in frequency and severity. To manage catastrophic claims, insurers are increasingly resorting to reinsurance, which is when they transfer a portion of their risks to other parties. They also continue to increase rates to compensate for these events in certain market segments, such as property.
Severe weather remains a serious concern within the commercial and personal insurance industry. Nationwide catastrophic weather last year — such as Hurricane Fiona and the Ontario-Quebec derecho — resulted in $3.1 billion in insured claims, making 2022 the third worst year for losses in Canadian history.
What you can do:
When looking at insurance for your commercial property, identify and understand what your potential climate risks are. Are you in an area that has a history of flooding, extreme storms or wildfires? Work with a broker to determine how these risks impact your rates.
Have an emergency plan in place to help ensure business continuity and reduce long-term costs.
Use construction materials that are built to withstand punishing weather patterns. Underwriters consider these materials when determining your rates.
Cyber Liability
Cyber incidents are currently ranked as the number one risk facing businesses globally, according to Allianz’s 2023 Risk Barometer. In 2022, the average cost from data breaches reached an all-time high of $4.35 million, and it is expected to surpass $5 million in Canada.
“It can be easy for companies who’ve never experienced a cyberattack to underestimate their level of preparedness… but the fact of the matter is that cyber risk isn’t going away, and companies are more dependent on technology than they’ve ever been in the past.”
– Patricia Kocsondy, Head of Cyber & Tech at Beazley
With the increasing adoption of remote work, digital transformation and the growing sophistication of cyberattacks, Canadian businesses need to be prepared for a cyberattack, now more than ever — including having adequate cyber insurance.
What you can do:
Invest in cyber security. This includes ensuring all software is up to date, setting up multi-factor authentication, instituting minimum password lengths and implementing cyber security training.
Back up all data on a regular basis to a second source, such as a hard drive or cloud storage, to ensure that it is protected in the event of a breach.
Create an incident response plan that is tailored specifically to your business based on threats that you and your employees are most likely to encounter.
Continuously train your employees on cyber security and how to spot a potential threat.
Global Supply Chain Disruptions
Between geopolitical issues, major weather events and the continued impacts of the COVID-19 pandemic, many businesses continue to feel the effect of supply chain disruptions.
The pandemic, supply chain issues, material shortages and a higher-than-targeted inflation rate are having a compounding affect on the Canadian economy.
Source: Liberty Mutual Insurance
The uncertainty has forced many businesses to take a long-term view of potential disruptions and to work with suppliers to develop alternatives to address these risks. This is key for working with insurers to help develop risk management plans.
What you can do:
Take financial precautions to ensure you and your suppliers have sufficient resources and coverage should a disruption occur.
Diversify your business’ supply chain and ensure that the cost of disruptions is factored into your business’ inventory planning.
Plan for different scenarios so that if something bad happens, you are ready to respond quickly and nimbly with minimal impact to your business operations.
Environment, Social and Governance Policies
Insurers are increasingly scrutinizing companies’ environmental, social and governance (ESG) policies and performance, often to improve the transparency of risks not captured by conventional financial metrics.
Issues such as pollution, diversity and inclusion, and corporate conduct continue to receive public attention, resulting in more litigation and insurers using ESG to assess a company’s liability risks and exposures. While the focus has largely been on environmental policies, insurers are increasingly concentrating on social and governance policies. This is becoming especially prominent when working with small and medium-sized businesses.
What you can do:
Understand what ESG policies are and how they can impact your business. Some questions to ask yourself include: What is your company’s carbon footprint? Do you have a diverse company culture that provides equal pay and advancement opportunities? Are you transparent in your communication with shareholders?
Develop a clear roadmap for addressing risks and changes related to implementing ESG policies. Your organization needs to be aligned on these changes for them to be effective.
Work with your broker to discuss how you would like to address these risks to better develop ESG policies and practices.
Contact us to discuss ways your business can mitigate risk.
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As pet owners, you want what’s best for your furry companions. And because they’re a part of the family, it’s tempting to take them wherever we go—including when on the road. Although seeing a pup stick its face out the window is adorable, the truth is that if you see this, it likely means the dog isn’t properly secured in the vehicle. In a 2019 pet owner survey, researchers found that only 55% of respondents use restraints when driving with pets. Driving with your pet unrestrained or on your lap can quickly become dangerous for yourself, your pet, and other drivers on the road.
Is it Illegal to Drive with a Pet on Your Lap?
Driving with unrestrained pets is an easy way to get distracted while driving, which could lead to an accident. If your attention is on preventing your dog or cat from jumping around, you’ll have little time to react to upcoming road hazards. But is it illegal to drive with a pet on your lap?
Currently, the only states that explicitly prohibit driving with a pet on your lap are Hawaii and New Jersey. In Hawaii, driving with a pet on your lap will result in a $97 fine. In New Jersey, the fine can range between $250 to $1,000. Although only two states have laws regarding driving with a pet on your lap, plenty of others have legislation related to unrestrained pets in vehicles. Plus, just because it isn’t illegal doesn’t mean it’s safe to do.
Driving with Pets: State Laws to Know
California – California requires drivers to restrain their pets if transported on a pickup truck’s bed. However, no laws require pets to be secured inside the vehicle.
Connecticut – Although Connecticut doesn’t have explicit laws prohibiting driving with a pet on your lap, the state does have a strict distracted driving law applied to any non-driving activity while operating a vehicle. Connecticut also requires drivers to restrain pets in a crate when traveling in the back of a truck bed.
Hawaii – As mentioned, it is against the law to drive with a pet on your lap in Hawaii.
Maine – Maine drivers may risk fines driving with a pet on their lap due to the state’s distracted driver laws. Additionally, pets must be restrained or in a crate when traveling in the back of a pickup truck or convertible.
Massachusetts – Similar to California, Massachusetts drivers must restrain their pets if transported on the bed of a pickup truck. Due to the state’s distracted driver laws, you could face legal fines if it is determined that your pet interferes with your ability to drive safely.
New Hampshire – New Hampshire requires pets to be restrained in a crate when traveling in an open-air vehicle or truck bed. However, the state recently introduced a bill that may bar drivers from having a pet on their lap.
New Jersey – New Jersey law requires pets to be restrained whenever traveling in a vehicle.
Rhode Island – It is unlawful to transport an unrestrained pet in an open vehicle in Rhode Island. When inside the car, pets must be under the physical control of a passenger other than the driver or secured with a harness.
Vermont – Vermont law prohibits transporting a pet in a cruel or inhumane manner, which is open to interpretation.
Safety Tips to Follow When Driving with a Pet
Practicing safe driving habits should always be your top priority, but especially when driving with a pet. Although you understand the basic laws that apply to drivers on the road, your pet doesn’t.
To prevent any injuries to yourself or your pet, they should ride in the back seat of your vehicle while properly secured. In the event of an accident, keeping your pet in the back seat will prevent them from being injured by your car’s airbags. Just like with children, the airbag’s force can potentially cause severe injury or even death.
To secure dogs, a car harness that attaches to their regular vest or collar is ideal. When searching for a dog harness, choose one that allows your pet to comfortably rest in the back of your car. However, you don’t want one that is long enough for them to move side-to-side. Also, although your pup may enjoy sticking its head out the window, doing so is a safety hazard as the dog may fall out, hit an object, or distract other drivers on the road.
For cats, it may be easier to get them to stay still by utilizing a secured pet carrier. However, cat car seat harnesses are available if your cat doesn’t mind traveling outside a carrier. Just like dogs, cats should ride in the back seat of your car whenever possible. Although much smaller than some dog breeds, cats still face the same risks when unrestrained in a car.
Only consider pet harnesses that have passed crash tests to ensure they work as designed.
Keep Your Pet Protected with Personalized Pet Insurance
As a pet owner, you want what is best for their health. Unfortunately, unexpected vet visits can quickly become expensive—that’s where pet insurance can help. AIS partners with Embrace to offer pet owners personalized coverage options for their furry companions. With multiple plans to choose from that offer head-to-tail coverage options, Embrace can fit within any budget. Start your quote online today or by speaking with an insurance specialist at (888) 772-4247.
The information in this article is obtained from various sources and is offered for educational purposes. Furthermore, it should not replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. No warranty or appropriateness for a specific purpose is expressed or implied.
