Does Renters Insurance Cover Car Theft?
A renter's insurance policy in the United States does not cover car theft. This insurance is intended to cover personal items, such as bags, laptops, and other valuables, that are stolen from the rental car.
To get coverage for theft and vandalism, you will need to opt for a rental car insurance. Simply put, renter's insurance covers the belongings inside the stolen car, while insurance coverage for rental cars is needed for theft coverage.
Why Does Car Rental Insurance Not Cover Car Theft?
Every car rental company counts cars as high-value and mobile assets; specialized insurance is needed. Renter insurance, on the other hand, covers items stolen from the rental car. Look at the following to know why renters’ insurance does not cover car theft:
Specialized Coverage Needed: Rental vehicles require separate, specific insurance policies for comprehensive coverage against theft and vandalism.
Avoiding Overlap: To avoid overlapping coverage for the same accident/incident, insurance companies have intentionally separated the renter and auto insurance policies.
Asset’s Nature: Renter insurance is specifically designed for personal and stationary belongings, not for moving and high-value vehicles.
What is Covered by Car Rental Insurance?
Renter insurance definitely does not cover the movable vehicle, but it provides coverage for several aspects. These include the following:
Personal Belongings in the Parked Car: If anything is stolen from the rental car parked in a garage or any other place, the policy will cover the valuables.
Loss of Use: In case the rental car is damaged by a natural calamity and declared ‘loss of use’, the insurance policy will cover the applicable expenses.Understanding a collision damage waiver for car rentals can also help renters know what vehicle damage and loss-related costs may be covered
Liability Coverage: This insurance policy may cover the liability and related expenses. However, it is advised to speak to the insurer regarding the coverage.
What are ACV and RCV in Renters Insurance Claims?
Even though car theft is not covered under the renters' insurance, it provides coverage for the belongings that were inside the stolen car. While claiming for them, keep the following in mind:
This insurance option works based on Actual Cash Value (ACV) and Replacement Cost Value (RCV).
ACV is the amount that is given by the company for the depreciated value of the item.
This means the payout is given as per the wear and age of the item.
RCV, on the other hand, is the original cost of the item that is paid by the insurer as compensation.
Thus, the full amount will be reimbursed to replace the cost of the stolen item.
What to do if a Rental Car is Stolen?
When a rental car is stolen, feeling worried is common. However, this way you cannot help yourself. Since renters’ insurance does not cover car theft, you must do the following when such an unexpected event occurs:
Just calm down and make sure the car is not in an unauthorized place.
If it were in the non-parking area, just check with the local towing department.
When your car is not there, just call the local police and report the incident.
Call the rental agency and tell them about the issue.Reporting the incident immediately is important because failing to do so may create issues similar to situations involving what happens if you don't return a rental car on time
Get in touch with the rental car insurance cost and coverage company to understand the coverage and related aspects.
Collect the necessary documents and share them for further processing.
Stay in touch with the local police and even the rental company for updates.
Note: If you do not inform the rental agency about the car theft and skip the scheduled return time, it will report a rental car as stolen.
