Does Car Theft Impact Insurance Premiums?

Hassanbro560
September 28, 2024
Insurance & Compensation Strategies, Recovery & Support After an Accident

It is not easy for anyone to deal with a car theft situation. According to new research, more than 70% of drivers are worried about the increasing vehicle crime rate in the UK. This is not only because of the car’s value but also because of an increase in insurance premiums after a car theft.

According to a rough estimate, having a car stolen can add up to £630 to your insurance premium. However, the premium amount for this insurance varies based on different insurers’ terms and conditions.

Vehicle theft can have an emotional and financial impact. In short, it is the worst thing one could experience. Let’s explore the effect of car theft on insurance premiums in detail;

What are the Impacts of Car Theft on the Insurance Premiums?

In the case of car theft, the insurance company assesses the situation, gathers the information, pays the car’s owner accordingly, and adjusts the insurance premiums accordingly.

On average, a car theft might increase insurance premiums by £630 per year. However, several factors can affect the amount or increment in insurance premiums. The most common factors that might affect the insurance premiums amount are the following;

Insurance policy
Car make & model
Insurance provider
Location
Car’s level of security

Does Car Insurance Cover the Theft?

Yes, an insurance policy covers car theft. However, the level and extent of the coverage ultimately depend on your insurer and the type of insurance coverage you have. In the case of car theft, an insurer provides the amount according to your vehicle’s value under your insurance policy.

However, the coverage for car theft might not be included if you have only liability insurance.

How Does a Car Theft Impact the Insurance Premiums?

A car theft might affect your insurance premiums in several ways. Here are a few of them;

Car Type & Model

Your stolen car's type, model, and make will directly impact the insurance premiums. For instance, luxury cars are more attractive to thieves. So, the insurance premiums will be based on the ratio and rate of car theft according to its type, make, and model.

Location

Location also matters when it comes to insurance premiums. If you live in an area with a higher vehicle crime rate than usual, the insurer will charge you more for the insurance.

Insurance Claim History

Your car insurance claim history also significantly impacts the insurance premiums. However, insurance providers don’t see comprehensive compensation as a negative point as non-fault accidents and multiple claims. However, numerous theft claims can also affect your insurance premiums.

Insurance Company

As discussed earlier, insurance policies and coverage vary based on different insurance providers' terms and conditions. An insurer also directly impacts insurance premiums. So, choose an insurer wisely after considering all circumstances. Negotiating or communicating with your insurer earlier would save you from consequences later.

Does a Car Theft Affect No Claims Discounts?

Car theft can affect no-claims discounts (NCD). However, the impact level might vary based on factors and insurer terms. NCDs are undoubtedly the best way to reduce car insurance costs annually.

The insurance premium will be lowered accordingly each year you go without filing a claim. In the case of car theft, you’ll lose your no-claims discounts as it might be considered a claim by your insurer.

So, the cost of your insurance policy will increase if you take out the insurance again after a car theft.

How Much Will I Receive for Claim After Car Theft?

After claiming, the amount you will get depends on the insurance policy and company terms and conditions. If the car has recovered with minimal damage, the insurer will pay for the repairs only.

If the car is unrecoverable or unrepairable, the insurance company will pay you according to the value of your vehicle. The best thing is that you can also challenge your insurer if you are unsatisfied with the proposed amount due to filing the claim.

Do I Need to Pay Insurance Excess?

Yes, you’ll need to pay excess on your insurance policy. Whether your car is stolen or damaged in an accident, you must pay for an excess amount. If you don’t know about your insurance excess terms and conditions, you can check it out on your insurance policy’s documents.

You can save enough money on your insurance premiums if you have paid excess.

Will I Get a Courtesy Car After My Car Has Been Stolen?

If you think your insurance company will offer you a courtesy car after theft like after an accident, you might be wrong! Still, the chances of getting a courtesy car after theft vary based on the insurance policy’s terms and conditions.

Hiring a car through your insurer might cost you extra after the theft. Car hire after theft comes with many conditions and limitations. However, it will give you peace of mind and a vehicle to drive until your car is recovered.

How Can I Avoid Car Theft?

Now, in modern, especially luxury cars, manufacturers install advanced security features to save your vehicles from getting stolen. To avoid theft, numerous anti-theft devices have been installed in contemporary and new vehicles, such as alarms and car tracking systems.

As a car owner, you are also responsible for taking precautions to prevent theft. Ensure all doors are correctly locked when leaving your car in the parking lot, roadsides, or other areas.

Remember never to leave valuable items in the car. If you have a garage or a safe space to park your car, avoid parking it in public parking areas or on the roadsides, especially at night.

How Can Insurance Companies Help to Reduce Car Theft?

Insurance companies can also help their policyholders to minimise car theft ratios. Here are a few approaches an insurer can consider to assist their clients in the case of car theft;

Encourage your policyholders to install advanced security systems in their cars.
Insurers can also collaborate with law enforcement to enhance the chances of vehicle recovery after a vehicle is stolen.
Promote the awareness campaign about car theft to guide their policyholders.
Large insurance companies can invest in modern and advanced technologies to reduce the car theft rates in the UK.