A theft claim can give big headache. Car stereo claims are very difficult to dispute. Most insurance companies require you to file a police report, and guess what? Most police departments will not come to the scene to write a report unless there is reasonable suspicion of who stole your stereo.
To make matters worse, most auto insurance polices will exclude and theft claim for personal property. You would have to make a claim against your home owners or renters insurance to get coverage for your personal property. So anything in your vehicle that was stolen, not attached to the car, will be excluded unless you have one of those polices.
Even if you make a claim against your renters or homeowners, you will be subject to a deductible on those policies. Usually those policies have high deductibles and the insurance company will not pay for any of your personal items. Make sure your homeowners or renter’s policy has low deductible amounts before filing a claim.
But how can you document a stereo theft claim and get compensated for your claim? First, you need to file a “walk in” police report. This can be complicated since the police will not come out.
Once you have a police report documenting your stereo theft claim, then you need to file a claim with your insurance company. Your stereo claim will not be covered unless you have comprehensive coverage for a theft claim. Also your stereo must be worth more than your deductible. For example, if your stereo is worth $1,000 and your deductible is $250, then you will get paid $750 ($1,000 – $250). However, if your stereo
system is worth $200 and your deductible remains $250, then no payment will be
made to you.
The real issue will be that the insurance company will only owe you the actual cash value of the stereo system. But what is actual cash value? It is the value of your stereo minus its depreciation. You will soon learn that insurance companies depreciate electronics and systems like this one very heavily. They sometimes will take up to 40% of is value per year (not a set rule and it varies in every state and every insurance company).
This means that your theft claim could be worth $0 if your stereo is three years old. There has been a lot of dispute and litigation over this subject. Insureds argument is that their stereo cannot be worth $0 or close to it because it still provided an important use to them (there is inherent value). However, most stereo theft claims are smaller amounts for attorneys to litigate and try to change the insurance approach.
You can protect your interest by documenting what kind of equipment you had. Receipts of purchase would be great evidence. If you do not have the receipt, then provide photographs, the owner’s manual, the name and number of the person that installed the stereo, the box, or anything else that
could validate your ownership over the your equipment.
One thing you should never do. I mean this. Do not try to inflate your claim. This is considered fraud. If you get caught with an intentional misrepresentation as of to the value of the stereo, you will lose all your rights under the policy. The insurance company can turn you into the police and will put you in the “black book”. You will have a very hard time finding any kind of insurance. Do not risk it.
So the best way to handle your car stereo theft claim is to:
1. Get a police report, even if it is a walk in report,
2. File a claim if you carry comprehensive coverage.
3 collect as much information about your
4. Make sure the insurance company will not take excessive amounts of depreciation, and
5. Do not inflate the claim.