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What Happens If Your Stolen Car Is Found After Insurance Has Paid For It?

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

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

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

I saw this question of what happens if your stolen car was found after the insurance company had paid for it and decided to discuss it in 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 degree the value of the vehicle. Each has different policies on how they will handle a case.

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Why You Need to Report to the Police When Your Car is Stolen

Basically, there are 3 key reasons why you need to report the case of car theft 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 might be one of the needed requirements from your insurer when filing a claim
  2. Reporting a case of car theft to the police helps them serve justice, prosecute offenders and sanitize the society. It can even help other car owners stay safe from robbery attack.
  3. You might succeed at recovering your car.

When a car is stolen, the thief often do not bother changing the title for fear of being caught so they keep driving it that way until the day they are caught and the car impounded by the police.

In Australia or the United States for instance, when police recover a stolen car, they return it back to the owner except the insurance company had already informed the police about the car theft or when you try to trick them by purchasing a car insurance policy for it again.

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What Insurance Companies in the United States or Australia Do When a Stolen Car They Paid for is Recovered

From my experience if the vehicle is recovered within a year the insurance company will most likely want it signed over to them or have you purchase it back from them (cost perhaps discounted if it was damaged). Over a year it will often depend on the value of the car. Something that still (in the condition recovered) has lot of value they will take the same approach, as it will recover money for the insurance company.

The complexity comes in that they likely have written the car off their books and there are more paperwork and implications (read simply more cost) to the insurance company. Thus if there is not sufficient value in the vehicle for them to recover it they may simply not want to deal with it.

Once they have written it off it is considered “disposed of” on their books… if that ends up in a junkyard or in your hands is really not relevant at that point, it only matters if getting the car back can recover enough money for the insurance company to make the added effort worthwhile.

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Give Up the Recovered Car to the Insurer

Depending on the state you are, the worth of the car and how long it has been before it was recovered, your car insurance company might want you to buy back the car or you completely forfeit it to the insurer.

In Australia for instance, you can get your insurance claim paid in full if your car is stolen without necessarily getting proof from the police. However, once the car is recovered, you are not permitted to touch it because it now the property of the insurance company.

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