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Does Renters Insurance Cover Auto Theft?

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If your vehicle is stolen, insurance companies have the responsibility to compensate you for the market value of your vehicle. If you have comprehensive insurance and renters insurance, you can reap the benefits of both coverages. Collision insurance will not protect you if your car is stolen because it only covers you for collision damages. Comprehensive insurance covers you for a replacement if your car is stolen. How does renters insurance come into play? This guide will focus on the connection between renters insurance and vehicle theft (including personal property).

Does renters insurance cover auto theft? No, renters insurance does not cover the theft of motor vehicles such as cars, motorcycles, RVs, boats, etc. Renters insurance only covers personal property inside the vehicle such as clothes and electronics. Renters insurance allocates higher coverage limits inside the unit you’re renting and lower limits off-premise. Personal property stolen inside the car is limited to 10% of your coverage at home. This coverage extends internationally, as long as the items were listed on your inventory list. 

Renters Insurance and Vehicle Theft

Renters insurance will not replace your car under any circumstances. Even though a car is technically personal property, a vehicle won’t fall under the protection parameters mentioned in an HO-4 plan. The same applies for homeowners insurance because personal property has coverage limits. Insurance companies also know there are separate types of automobile insurance that can provide protection against theft (i.e. comprehensive insurance).

The basics of renters insurance coverage are the following:

  • Personal property. Property inside the rented unit such as the clothes, furniture, electronics, food, instruments, and other items are insured up to a certain policy limit.
  • Liability insurance. This coverage is only used in the event a guest is injured inside your rental property and it was your negligence that led to the injury.
  • Living expenses. If the rental unit or house is damaged beyond repair and you have to move while it’s being repaired, the insurance company will pay your living expenses. This includes accommodation, food, and bills.

The only coverage in rental insurance that applies to car theft is personal property coverage. This cover should extend beyond the rental condo/house and cover your personal belongings outside the premises of the rental unit. Those personal items that were in the vehicle when it was stolen are insured.

Personal property outside the rental unit is subject to coverage limits, similar to property inside the home. Most rental insurance plans have a maximum claim limit of up to 10% of the total rental coverage. This means that if you’re insured for $100,000 you can claim up to $10,000 for personal property. Moreover, the insurance company will only pay a maximum of $1,000-1,500 per item.

Vehicle Items You Can File A Claim On (With Renters Insurance)

Certain items are eligible for personal property claims on renters insurance while other items are not. For instance, expensive items like jewelry and designer clothes are not covered. You can only file a claim for everyday items that are easily replicable unless you had special insurance for those high-value items. Comprehensive car insurance may also cover you for those personal items, so you won’t need to apply for renters insurance. The insurance company will ask for evidence the car was stolen and will request a copy of the police report. To make sure there are no misunderstandings in regards to coverage, the following personal items will be covered:

  • Your private property. This includes accessories such as your wireless charge or more expensive items such as a gaming laptop that cost $1,000. Any personal property found inside the car that does not qualify as a high-value item (over $1,000) will be covered. Renters insurance will pay out for personal items located in your stolen car as long as you’ve listed those items in your personal property list. Policy limits will apply here.
  • Your friend’s personal property. If your friend or spouse left their personal property inside the vehicle when it was stolen, you are likely eligible to get compensated for their property as well. The main distinction is that the insurance company makes you list every item in your possession when you’re starting out with renters insurance. Filing a claim for other people’s personal property is a gray area, but as long as you can prove it wasn’t your negligence that led to the theft you will likely get reimbursed for your friend’s property.
  • Your government documents. This includes all valuable documents we leave in the car such as a driver’s license, personal ID, credit card, passport, etc. Each one of these documents can cost hundreds of dollars to replace because you’ll have to file for a renewal, travel to take new pictures, get notarization, and more. The replacement costs for documents can add up and the insurance company will cover them under personal property. Some insurance companies also have special identity theft protection mechanisms.

Note: If it was your negligence that led to the theft (i.e. you left the windows open), renters insurance will NOT cover other people’s personal property. The only exception is if they themselves have personal property coverage on their renters/homeowners insurance that can cover them.

Coverage Limits On Stolen Property

The coverage limits on personal property are low. They are usually 10 times lower than the maximum coverage limit on your insurance plan. Example: If you have $200,000 worth of coverage, you’ll only be entitled to $20,000 in personal property coverage outside the home. We recommend creating a home inventory list to know exactly how much cover you need to get reimbursed for the full amount. The list can always be updated as keep adding new belongings to your home. If you have $15,000 in personal property at home, you’ll need at least $150,000 in rental insurance coverage.Keep in mind that a successful claim on personal property in a stolen car will only pay out the ACV (actual cash value) of the property. This means that each item will be judged by today’s market value and not the original value you paid for it. Example: If you had an iPhone that you purchased for $1,000 for and today it’s worth $600, the company will only pay $600 for the replacement. The same cash-value policy applies to all stolen property inside the car. The main alternative to this is RCV (replacement cost coverage) that covers you for the original value of the personal property. This is available as an optional upgrade at most insurance providers.

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