How Much Does Theft Insurance Cover?

Comprehensive Coverage

• Comprehensive coverage is not mandatory; it is an optional coverage that protects you in the event of theft, fire, vandalism and other non-accident-related incidents. If you financed your vehicle through a lender, it may require that you obtain this coverage, but it is not required by law. Comprehensive insurance covers damage or loss to your vehicle or parts of your vehicle, such as your airbag, according to the Insurance Information Institute (III).
  
  

Coverage Amount

• The maximum payout for comprehensive coverage is "the actual cash value of your car at the time of damage," according to Allstate. Actual cash value (ACV) accounts for depreciation. This means, the insurance company deducts for mileage, wear and tear and your vehicle's age, so you will not receive the replacement cost for your vehicle.
  
  

Deductible and Premium

• According to Allstate, your deductible for comprehensive coverage is anywhere between $0 and $1,000, but the lower your deductible, the higher your premium. When determining premium, the insurance company also takes into account the likelihood your car will be stolen, according to the III. The insurance company may consider your geographic location and the year, make and model of your car. The III gathered studies from the National Insurance Crime Bureau and found that in 2009, Laredo, Texas; Modesto, California, and Bakersfield, California, were the top three metropolitan areas with the highest vehicle theft rates. Also, the 1994 Honda Accord, the 1995 Honda Civic and the 1991 Toyota Camry were the three most frequently stolen passenger vehicles. Using studies such as these in combination with your driving record, your credit and your deductible, insurance companies determine a premium.
  
  

Considerations

• If your car is worth close to the amount of your deductible, comprehensive coverage may not be a good idea, according to Allstate. Because you have to pay your deductible out-of-pocket, you should only obtain comprehensive coverage if it can potentially benefit your situation. For example, assume you have a car that is worth $2,000, and you determine that a deductible on a comprehensive policy is $1,000 if you pay a premium of $200. In this case, comprehensive coverage may not be worth the cost. On the other hand, if your car is worth $10,000 or even $5,000, the comprehensive policy with the same deductible and premium may be worthwhile.