It’s a comforting thought to have “full coverage” insurance for your car. Unfortunately, the term doesn't have any real meaning to insurers. Drivers often use the term as a synonym for a combination of policies that provide a wide range of protection. However, even if you have several types of policies, theft of items inside the car is seldom covered.
When a driver refers to full coverage insurance, he’s likely speaking about a combination of liability, collision and comprehensive policies. Liability insurance covers the costs of damage you cause to others and to property as a result of a car accident. Collision insurance will help pay for damage your car sustains in an accident. Comprehensive coverage protects your car from a variety of threats, including storms, natural disasters, falling objects, theft -- of the car, not its contents -- hitting an animal and broken glass. You can buy additional riders to cover other costs, such as personal injury protection and rental reimbursement.
Theft of Contents
A comprehensive policy normally covers the theft of items attached to your car. For example, you’d be covered if thieves swooped in and stripped your car of its parts. Expensive cars are tempting targets for parts thieves, because the items stolen often fetch a high price in the black market. Your stereo is only covered if it’s the type that is permanently installed, not the type that can be detached. Some insurers provide optional coverage of stereo components for cars that have expensive systems installed. Auto insurance doesn't cover Items taken from your car, such as your computer or camera. Fortunately, homeowners or renters insurance covers the theft of valuable items left in your car.
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The standard homeowners policy has a section called “Coverage C” for personal property. This covers your personal property from damage and theft no matter where it occurs, including in your car. Theft of your car itself is not covered by this insurance. Coverage details vary by policy, but normally the amount protected under Coverage C is about 10 percent of the value of your home’s coverage. You need to check the fine print to see the exceptions and limits your policy sets. Pay particular attention to limits on items you use for your business. Renters insurance offers the same type of coverage for stolen items.
Filing a Claim
Unless the item stolen was of considerable value, you might not want to bother filing a claim. Most homeowners policies carry a deductible that helps to keep premiums down. This means that you must pay the first $500 or $1,000 out of your own pocket for replacement of stolen items. Another factor is that some insurers will raise your rates if you file a claim. If you do file, you’ll need to provide documentation that you actually owned the stolen item. Without a receipt or credit card statement, your insurer is unlikely to approve your claim. Also, check your policy to see if it pays out based on actual value or replacement value. You might be able to purchase a replacement value rider at an additional cost.
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