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When you're liable for a stolen car


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Question: My 1996 Honda was stolen. I only had liability coverage on it. I was wondering, if someone got run over or a car got hit by my stolen car, could I be held liable?  Should I keep my policy for a while?

Answer: Typically, a car owner is not held responsible for what the driver of a stolen vehicle does.  This means if the thief hits and damages other cars or people or is chased by police and crashes, you normally wouldn’t have to pay for any of the mess.

Also, because you obviously didn’t give the thief permission to drive your vehicle, your car insurance company wouldn’t usually accept claims for those harmed by your stolen vehicle.

However, there are exceptions to this. 

When you can be held liable

If you somehow contributed to the car being stolen, then you and your insurance company may be asked to compensate those who were damaged by your stolen car.

New York, Tennessee and many other states have laws that say something to the effect that a driver is not permitted to let a vehicle stand unattended without first stopping the engine, locking the ignition and removing the key from the vehicle.  If you’re caught doing so, you can be cited and fined. (See “Let the car warm up? Bad idea.”)

This lack of judgment could have even harsher consequences.

If you left your unlocked, or worse running, with the keys in it unattended in a public area, then you could possibly be found negligent under state laws for conduct falling below the applicable standard of care. That’s legalese; in plain language it means you didn’t take basic care -- like locking up your car -- to prevent the theft of your car.

A judge or jury could determine that a foreseeable outcome to your actions was a person stealing your vehicle and causing damage to others.  This may allow you to be found at least partly to blame for ensuing damage done by the thief and held liable for a percentage of the damages. 

If you were found negligent in this manner, then your car insurance liability coverage could see claims placed against it. In cases that I’ve read, if the car owner is found negligent and partially at fault, the insurance company normally will pay out liability claims, up to the policy limits. 

Some car insurance policies may have an exclusion for coverage it you’ve left your keys in your car and the vehicle unattended.  However, this is normally an exclusion under comprehensive coverage so that a stolen car claim wouldn’t be paid out, not liability.

Unfortunately, with just liability coverage you’re unable to make a claim for your stolen vehicle.  If you had comprehensive coverage, you would have been able to make a claim for the theft and get paid out actual cash value for it.  Of course with the age of your vehicle, it may not have been worth the cost of the coverage to carry it.

Keep your policy in effect

I’d advise that you keep your liability policy intact for at least 30 days to see if your car is recovered. Also, most car insurance policies will extend liability coverages to cover your rental car if you’re using one until your car is found or you buy a replacement.

Even if you aren’t renting a car or going to buy a replacement any time soon, it’s wise to keep car insurance in place.  You can contact your insurance provider to see about transitioning your policy on the Honda to a non-owner policy until you get a new vehicle.

A non-owner policy is normally cheap and will help you keep continuous car insurance coverage in place.  This, in turn, will help you receive lower rates than if you had a gap in coverage when you get a replacement car and need an owner’s policy again.

When you do get a replacement vehicle, it’s a good time to compare costs for various vehicles and find the car insurance company offering the best rates.

More articles from Penny Gusner


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