Does Liability Insurance Cover Theft?

Does Liability Insurance Cover Theft?           

If you live in an environment where car theft is rampant, you may want to know if your Liability Insurance Policy covers theft. Even with the advancement of technology in first-world countries like the United States, the issue of car theft is still on the rise. With nearly 1 million cars stolen in the US in 2021, it may just be the right time to know if your insurance company has a way of helping if this happens.


What Is Liability Insurance?

Liability insurance is regarded as a backup insurance policy that offers protection to insured persons when they get to cause accidents or damages to other people’s property. It is the type of insurance system that pays the bills of the third party who got involved in physical injury either through car accidents or having their property damaged. When such happens the insurance company of the accused person steps in to handle matters.

Types of Liability Insurance

The types of liability insurance characteristics the kind of offers and benefits attached which you are eligible to enjoy. The different features of liability insurance make it very suitable for almost all situations that need liability coverage. The types of liability insurance are:

1. Umbrella Insurance

Umbrella insurance is a sort of personal liability insurance that can be beneficial if you find yourself liable for a claim that exceeds the limits of your homeowner’s or auto insurance. If you own a boat, car, or motorcycle, umbrella insurance will always take over where your liability insurance ends.


2. Commercial Liability Insurance

This is a commercial general liability policy, commonly known as comprehensive general liability insurance. It extends its coverage to the extent of lawsuits arising from employee and public injury, property damage caused by an employee, and injuries caused by workers’ careless actions. The coverage may also cover intellectual property infringement, defamation, libel, contractual liability, tenant liability, and employment practices liability.

3. Director and Officer Liability Insurance

If a corporation is sued, director and officer liability insurance protects the company’s board of directors or officials from legal exposure. Even though most businesses provide some level of personal safety to their employees, some corporations go beyond to protect their management team.

4. Comprehensive General Liability

Comprehensive general liability plans can be tailored to any size or type of business, partnership or joint venture, corporation or association, organization, or recently acquired enterprise. Bodily injury, property damage, personal and advertising injury, medical costs, and premises and operations liability are all covered by insurance. Insurance companies pay compensatory and general damages in litigation but not criminal sanctions.

5. Product Liability Insurance

Product liability insurance is for companies who make things for broad sale. Product liability insurance protects companies against claims resulting from injuries or deaths caused by their products. In such a situation, products liability coverage can kick in to ease matters


Liability Insurance is essential to almost every driver on the public road and every property owner as well. Third-party damages are not always intentional, but little can be done to reverse such actions when they happen. In case you’re still wondering about the relevance of liability insurance, kindly check out the reason why it may be a life-saving option for your finances.

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Does Liability Insurance Cover Theft?

With all of the amazing benefits and coverages offered under liability insurance, does it cover car theft? Sadly, No. The policy of liability insurance does not protect you if someone hijacks your car. According to research, the purpose of liability insurance is to pay for accidental damages that you cause to other people or their property either with your car or in a workplace owned by you. Therefore it should not be confused with car theft in any way. Additionally, it doesn’t cover damages a thief may cause if it’s involved in an accident after being stolen. Therefore, if you’re lucky to recover your stolen vehicle and it’s in a bad shape, your liability insurance does not in any way provide financial coverage, your comprehensive insurance will take that up.

What Does Liability Insurance Really Cover?

  • Liability insurance may be the only hope you have in a situation whereby your personal vehicle causes damages to another motorist’s vehicle. You never can tell what will happen on a busy highway, so in such a situation whereby the unexpected occurs, your mind will be at rest if you’re covered by liability insurance.
  • Liability insurance coverage also extends to third-party damages such as injury. Let’s say you have a company where people work with diverse items that could cause physical harm, it is highly recommended that you’re covered with liability insurance. Any of your staff will be immediately covered and given medical attention in situations whereby they sustain injuries.
  • Customer protection is very important if you want your business to experience an unusual boost. Psychologically, your customers tend to have more confidence when in partnership with you for your safety concern while dealing with them. If any injury is sustained by any of your customers, you will be rest assured that they will receive instant medical care.
  • Do you know that liability insurance coverage is also relevant in situations whereby your business faces a lawsuit? Legal expenses can be paid by your insurance company in situations whereby you’re not financially capable to handle such payments.

Examples of Car Thefts and Preventive Measures

Car theft is not only limited to the illegal mobility of someone’s car. A few situations can also point to car theft which does not necessarily mean they are stolen. Note that the below examples are also not covered by liability insurance just as car theft is not covered.

1. Keyless Car Theft

Keyless entry vehicle theft or relay theft is becoming common in automobiles. However, if your car uses keyless technology, it’s worth investing in additional security systems to guard against this. A relay theft is committed by two people who target cars parked near the owner’s house. They employ two components: a relay transmitter and an amplifier. When these technologies work together, the car is tricked into thinking the key is closer than it is, allowing the car to be unlocked, started, and driven away.

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Preventive Measures

  • Idle or sleep mode is now available on some keyless systems. If it fails, placing your keys in a metal container should stop the signal. You have a fair chance of preventing keyless car theft if you block the signal from the key.

2. Turbo Decoder Theft

This turbo decoder theft is another form of car theft which are used in advanced countries. Car hijackers that use turbo decoder theft only target vehicles that use manual keys. They use a device that forges the shape of a keyhole which takes the exact shape of the original key and uses it to their advantage. When inserted into the keyhole, such a vehicle starts immediately and is moved away.

Preventive Measures

  • This type of theft can be avoided with multi-layered security. Immobilisers and tracking systems can also be used to curb Turbo decoder theft. They are appropriate and should be of assistance.

3. Transponder Key Cloning

The victim’s keys are typically obtained through shady garages or car washes. The criminals then use a gadget to duplicate automobile keys. They replicate the stolen key’s unique code onto a blank key purchased online. The genuine key is then returned to the owner, and the car is usually stolen later with the help of the car key clone.

Preventive Measures

  • Before you hand over your car to a garage, valeting service, or car washing service, always check their qualifications. Most criminals who use vehicle key cloning commit their crimes a while later. As a result, additional security measures such as steering wheel locks and gearstick locks should keep your vehicle safe.

4. Onboard Diagnostics Compromise (OBD)

The onboard diagnostics system (OBD) stores data about the vehicle’s systems. This equipment is typically used by mechanics to assess the health of a vehicle. Unfortunately, criminals who have access to this type of equipment can obtain information about the vehicle.

After acquiring access using a turbo decoder or another technique, the gadget is inserted into the OBD port, which is often located beneath the dashboard. The crooks can obtain all of the car’s information from here, including the unique key code. In a manner similar to transponder key cloning, a duplicate key is manufactured to steal cars.

Preventive Measures

  • Again, multi-layered security should be relevant in this situation. Even if the crooks obtain access to the vehicle, the steering wheel and handbrake locks may be tough to disengage. Although installing a vehicle monitoring device will not prevent your automobile from being stolen, it will assist authorities in recovering it afterwards.

5. Electronic Control Unit Replacement (ECU)

The electronic control unit regulates the engine and other operations like that of a laptop or computer. Again, car thieves can use this technology, but it is a time-consuming technique of theft. As a result, robbers prefer to target commercial vans that are kept up in storage overnight. Offenders typically use a blank ECU obtained from a scrapyard. Thieves can replace the complete ECU by combining it with another method of entry, such as a turbo decoder.

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Preventive Measures

  • Physical security measures are advised here. Make sure the facility is secure if you’re leaving many automobiles overnight. You should also conduct regular CCTV checks.

What Insurance Policy Covers Car Theft?

Comprehensive insurance coverage is the best way to safeguard your car after it has been stolen. This sort of insurance covers the majority of the costs of repairing or replacing a stolen or damaged vehicle. Comprehensive insurance generally covers occurrences that regular liability or collision coverage does not. Because carriers created liability insurance to cover the expense of any harm you cause, it does not protect your vehicle against theft or other third-party damage. If you have comprehensive insurance, you are covered for car theft as well as any damage caused by a break-in.

What To Do Immediately Your Car Gets Stolen

1. File a Police Report

Make every effort to notify authorities within 24 hours of the theft. The sooner police begin searching for your missing vehicle, the more likely it will be found, and the sooner you may begin contacting your insurance provider.

2. File an Insurance Claim

After contacting the police, the next option is to contact your insurance company to file an insurance claim. Your insurance provider needs as much information as you can provide to consider your claim and determine the amount it will payout. Some insurance companies allow you to file a claim online or with a mobile app. Remember to have the following information included when submitting your claim:

  • The car’s name
  • Last location of all keys to the vehicle
  • Contact information of everyone with access to the car
  • A complete description, including mileage, service records, and upgrade
  • Contact information for your lender
  • Your car insurance policy number

3. Contact your Financial Institutions

Just in case you have an auto loan or lease, call your lender right away to report the theft. You’ll also need to determine whether you have personal information-containing paperwork in your automobile, such as your vehicle registration. If this is the case, you should consider placing a temporary fraud warning on your credit records by contacting one of the major credit bureaus such as Equifax, Experian, or TransUnion. Once you notify one of them, you don’t need to reach out to others.


Car theft is never-ending soon as car hijackers are becoming smarter by the day and very little can be done to prevent this. Safety precautions noted in this article can also be used in different car theft scenarios to curb the likelihood of having your car stolen. Lastly, liability car insurance only covers damages done on other property, and not if your car gets stolen. If you need car theft coverage, comprehensive insurance is the way to go.

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