Saturday, September 26, 2020

What happens if your car is found stolen after insurance has paid for it?

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When a car is stolen, the ideal is to first report it to the police and then report it to your auto insurance company by filing a claim.

All things being equal, if you are not dealing with a corrupt insurance company, you will receive a new car from your insurer to replace the one that was stolen from you.

But what if after a few weeks or months your car insurance company replaced your car with a new one and you or the police find it, what happens?

I saw this question of what happens if your stolen car was found after the insurance company paid for it and decided to discuss it on our blog today.

This really depends on the insurance company and often how long it has been since the vehicle was stolen and to some extent the value of the vehicle. Each has different policies on how they will handle a case.

Why do you need to report to the police when your car is stolen?

Basically there are 3 key reasons why you should report the car theft case to the police, no matter how cheap you think the car is or how much money you have in your bank account to replace it.

  1. It may be one of the necessary requirements of your insurer when filing a claim
  2. Reporting a car theft case to the police helps them do justice, prosecute criminals, and disinfect society. It can even help other car owners stay safe from theft attack.
  3. You may be successful in getting your car back.

When a car is stolen, the thief often does not bother to change the title for fear of being caught, so they continue to drive it that way until the day they are caught and the police confiscate the car.

In Australia or the United States, for example, when the police recover a stolen car, it is returned to the owner, except that the insurance company had already informed the police about the theft of the car or when you try to cheat them by buying an insurance policy car stop again

What do insurance companies in the United States or Australia do when they recover a stolen car they paid for?

In my experience, if the vehicle is recovered within a year, the insurance company will most likely want it delivered or returned (cost can be discounted if damaged). More than a year will often depend on the value of the car. Something that is still (in the recovered condition) very valuable, they will take the same approach as it will recover money for the insurance company.

The complexity is because the car has likely been removed from its books and the insurance company has more paperwork and implications (read simply more costs). So if there isn’t enough value in the vehicle for them to get it back, they just don’t want to deal with it.

Once it’s been discarded, it’s considered “scrapped” on your books … if that ends up in a junkyard or in your hands isn’t really relevant at the time, it only matters if getting the car back can get enough money back for the insurance company to make the extra effort worthwhile.

Deliver the recovered car to the insurer

Depending on the state you are in, the value of the car, and how long it has been before it is recovered, your car insurance company may want you to buy the car again or lose it entirely to the insurer.

In Australia, for example, you can have your insurance claim paid in full if your car is stolen without necessarily obtaining a police receipt. However, once the car is recovered, you are not allowed to touch it because it is now owned by the insurance company.

 

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