What is the Real Cost of a Stolen Vehicle for the Victim?

Victims of Car Theft Suffer More than Just Car Loss

Having your car stolen can be a traumatic experience and can result in a very time-consuming and frustrating process. You need to inform your insurer and the police immediately after the theft occurs. Once you provide sufficient information to the police, you will be provided with a crime reference number that you can give to your insurer when submitting your claim. This will then start off the process.

One of the big costs of vehicle theft is the time that you have to put into pursuing your claim. This can be far more than anticipated but there are also financial costs that may be much more serious for you.

Financial Costs of Vehicle Theft

The biggest financial cost of vehicle theft will be if your insurer does not pay for the loss. This may be for several reasons:

• You only have third-party insurance, which is the cheapest type but does not cover the vehicle if it is lost or damaged for any reason. You can add fire and theft to the policy for an additional fee although comprehensive is the best (although the most expensive) type of policy because it provides cover for far more.
• The insurer may reject the claim because there is insufficient evidence to prove it was stolen, there are no signs of a break-in, or if you’ve lost your keys or you weren’t sufficiently careful.
• Any possessions in the car are not covered by the policy.

It’s important when taking out car insurance to read through the policy and ensure it covers you adequately against all eventualities. Even if your insurer accepts the claim, any payout on the policy will not occur immediately. This may be because:

• additional evidence is requested to support the claim
• the company may wait to see if the car is found.

The Financial Conduct Authority requires that insurers must make a reasonable offer of settlement within three months of the claim being submitted. However, if an insurer requests additional evidence, settlement of the claim may be delayed beyond this period although you can complain if you think the delay is unreasonable.

While you’re waiting for the claim to be settled, you will have no vehicle unless a loan car is provided under the terms of the policy. Even if it is, this may not be equivalent to the vehicle you’ve lost and may only be for a set period and so you’ll have the expense of a hire car or the cost and inconvenience of arranging alternative forms of transport. You may also have a loss of income if you have no means of getting around.

Market Value and Extra Costs

If you do finally get paid out, you may receive less than you’re hoping for. That’s because the insurance company will only pay the market value of the car at the time it was stolen. New cars lose a considerable amount in value as soon as they’re driven off the dealer’s forecourt so you may not receive enough to buy an equivalent car. You can, however, purchase GAP insurance to cover the shortfall.

Any claim you make will affect your No Claims Discount and so mean your premiums go up when you next renew. You can protect this discount by paying an additional premium on your policy, but this adds to the cost.

If your car is recovered before you’re paid out, its condition will be assessed, and it may be written off and you receive payment for the car. Alternatively, any required repairs will be paid for by the insurance company. When the recovery occurs after you’ve been paid out, however, the insurance company will generally keep the car and may sell it or have it scrapped, depending on its condition.

Should the police recover the car, they will put it into storage, and you will get it back provided you can prove it belongs to you. However, you will have to pay charges that include:

• storage costs of up to £20 a day
• removal charges of between £150 and £300 depending on whether the car is upright or not when found, on or off the road and the extent of any damage
• disposal costs of £75 if the vehicle isn’t claimed after fourteen days and it’s traced to you as the owner.

Depending on your policy, the insurance company may cover these fees or they may be your responsibility. Clearly, having your car stolen is not only a frustrating experience but can also be very costly, and in more ways than you think. We can help you avoid these costs by improving the security of your vehicle and ensuring it’s less likely to be stolen. So get in touch for greater peace of mind.