Picture this: You’re heading to the gym, ready to get a great sweat on. You park your car, grab your gym bag, and lock the doors.
But wait—you forgot your water bottle! You dash back, only to find your car window smashed and your laptop bag is gone. Your heart sinks. What now? Will your car insurance cover the stolen items?
In most cases, personal items stolen from your vehicle are not covered by your car insurance policy.
Surprising, isn’t it? Most people assume items that are stolen from inside their car will be covered by their car insurance policy.
Let’s take a closer look at the actual language used in a standard car insurance policy and see exactly why personal items are not usually covered when stolen.
Understanding Your Auto Insurance Policy
To grasp why personal items aren’t typically covered, we need to examine the standard auto insurance policy. Now we don’t know who you’re insurance company is (policy language can vary by company), so we will use the language from a standard ISO auto policy form.
The Insurance Services Office (ISO) creates these forms, which many insurance companies use as a basis for their policies. Your policy may be slightly different than this example, but the language will be very similar.
In the ISO Personal Auto Policy form, under Part D – Coverage for Damage to Your Auto, we find this snippet:
“We will pay for direct and accidental loss to ‘your covered auto’ or any ‘non-owned auto’, including their equipment, minus any applicable deductible shown in the Declarations.”
Notice how it specifically mentions the auto and its equipment? Your backpack, laptop, or other personal belongings don’t fall under this definition.
If we think about the purpose of car insurance, which is to cover financial losses resulting from damage to your vehicle, damage to someone else’s vehicle, or injuries to you, your passengers, or other parties, covering personal items inside the vehicle really does not fit the intent.
Personal items are not part of the vehicle and are not considered equipment, so they fall outside the scope of what car insurance is intended to cover.
So, What Does Car Insurance Cover?
Your auto insurance typically covers:
- Damage to your vehicle from accidents, theft, or vandalism
- Liability for injuries or property damage you cause to others
- Medical payments for injuries to you or your passengers
- Factory-installed equipment and some after-market additions
But your cherished possessions left inside? They’re usually out in the cold, car insurance-wise.
There may still be hope, however, depending on other insurance you may have.
Renters or Homeowners Insurance to the Rescue. Maybe.
While your car insurance might not cover your personal belongings, there’s another potential savior: your homeowners or renters insurance.
These policies often include personal property coverage that extends beyond the walls of your home. So, that stolen backpack? It might be covered after all—just not by your car insurance.
Your Deductible Could Spoil the Party
One thing to keep in mind is a pesky thing called a deductible. This is the amount of money you agreed to pay if you have a claim before your insurance company pays the rest.
Your car insurance may have a deductible of $250 or $500, or maybe even as much as $1,000 or more. A renters or homeowners policy has a separate deductible, and in the case of a homeowners policy, the deductible my actually be multiple thousands of dollars.
Insurance companies have been making a switch from a fixed dollar amount deductible (like $1,000 or $1,500) to a deductible that is a percentage of the coverage provided on your home.
For example, you may have a 2% deductible on your homeowners policy. This means that if your home is insured for $500,000, your deductible would be $10,000!
For the theft of your possessions from your car to be covered under your homeowners insurance, it would have to be a very significant loss due to the deductible.
Renters policies usually have a lower deductible than a homeowners policy since there is no coverage for the structure itself. They normally provide liability protection in case you damage another renters property, along with coverage for your personal property.
Endorsements for Personal Property Coverage
Some insurance companies offer endorsements or riders that can be added to your auto insurance policy to provide limited coverage for personal items stolen from your vehicle.
These endorsements are sometimes called “Personal Effects Coverage” or “Personal Property Coverage.”
How These Endorsements Work
These endorsements typically offer a specific limit of coverage for personal items stolen from your car.
For example, an endorsement might provide $500 or $1,000 of coverage for personal property. This coverage is usually subject to a deductible, which could be the same as your comprehensive coverage deductible or a separate amount.
It’s important to note that these endorsements are not standardized across the industry. The availability, terms, and limits can vary significantly between insurance companies.
Limitations and Considerations
While these endorsements can provide some protection, they often have limitations:
- Coverage limits: The amount of coverage is usually relatively low compared to the potential value of items you might carry in your car.
- Specific items: Some endorsements may exclude certain high-value items like jewelry or electronics.
- Proof of loss: You’ll likely need to provide evidence of the stolen items, such as receipts or photographs.
- Cost vs. benefit: You’ll need to weigh the additional premium cost against the potential benefit and your personal risk factors.
While endorsements for personal property coverage in auto insurance do exist, they’re not always the most comprehensive or cost-effective solution. It’s crucial to understand your existing coverage under other policies and assess your specific needs.
As always in insurance matters, the best approach is to discuss your concerns with your insurance agent or broker. They can provide personalized advice based on your unique situation and the specific options available from your insurance company.
Remember, insurance is all about managing risk. By understanding your options and making informed decisions, you can ensure you have the right coverage in place to protect your belongings, whether they’re in your home or on the road.
Prevention is Key
Now to point out the obvious: The best insurance is prevention.
Since car insurance fall short when protecting your personal belongings and coverage is expected to come from other policies, there are some proactive things you can do to help mitigate this lack of coverage:
- Never leave valuables in plain sight in your car.
- Use the trunk or a covered cargo area to store items.
- Take important items with you, even if you’re only stepping away briefly.
- Park in well-lit, busy areas when possible.
These are pretty common sense items, but we don’t always think about them until after it’s too late. Theft prevention is the best way to not have to find out that your car insurance coverage does not cover theft of personal items.
During his career as an independent insurance agent, Ryan Grabenstein was appointed with Progressive, Allstate, Nationwide, Travelers, and many smaller regional and mutual companies. He has a Bachelor's degree in Finance from the University of Nebraska at Lincoln and Certified Insurance Counselor (CIC) personal and commercial lines training.