What does full-coverage insurance cover if my car is stolen?

Answered by Home Insurance, Car Insurance Expert Jackie on February 25, 2021

If my car is stolen and I have full-coverage insurance, will I be reimbursed the original value of the car?

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Home Insurance, Car Insurance Expert

Great question! If your car is stolen, you will not be reimbursed the original value of the vehicle. Unfortunately, as soon as you drive a new car off the lot, it drastically depreciates in value. Some experts say that cars depreciate in value 20% to 30% just in the first year alone.

What your insurance company will do is reimburse you the actual cash value of the car, which factors in depreciation. For example, let’s say your new car is stolen exactly one year after you purchased it for $20,000. After taking off 20% for depreciation, the car is now worth $16,000. This is the actual cash value. And the odds are you will still have an outstanding balance due to the bank that financed your purchase. You may want to look into gap insurance to cover the difference between what you receive from your insurance company and what you still owe on the car.

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