Avoiding Auto Theft and Insurance Problems

What's worse than experiencing auto theft? Finding out your car insurance policy doesn't fully cover your loss or out-of-pocket expenses.

A vehicle theft occurs at least twice each minute in the United States, at an estimated cost of $6.4 billion last year. Fewer vehicles are stolen by that legendary joy-riding teen than by pros who drive your car onto a freighter heading overseas, or to a chop shop to cannibalize it for parts.

To help consumers avoid getting burned not just once, but twice, the Council of Better Business Bureaus and the Insurance Information Institute have teamed up with a program called Wiser Drivers Wise Up to address both vehicle theft prevention and what to do if your car is stolen or in an accident. Here are some of their tips:

Don't think manufacturer-installed vehicle theft protection is enough

It can be disabled by experienced and determined thieves, who also know how to unlock a Club and similar devices. Even Steve Cox, a BBB vice president, was the victim of car theft. In fact, he lost two vehicles in three years with these protections; his Pontiac Firebird was stolen in daylight, and his Nissan 300ZX at night. Aftermarket vehicle anti-theft systems are usually more sophisticated and are worth paying a professional to install.

Don't think your old clunker is safer than a shiny new model, or that a luxury sedan is more attractive to thieves than a less expensive model

Older vehicles are usually stolen for their parts, which are no longer being manufactured; newer cars are stolen for their popularity. In 2008, the top five model years stolen were 1995, 1991, 1989, 1997 and 1994, respectively, according to the National Insurance Crime Bureau (NICB). In recent years, cars that have been glamorized in pop culture, like the Cadillac Escalade , have put it on many "most stolen" lists.

Contact police immediately, preferably while still at the scene of the crime

Speed is essential to recovering stolen cars, since any delay means your car is more likely to be in a chop shop or driven out of town. Of course you know the make, color and model of your car, but you also should know the license plate number and vehicle identification number (VIN). Keep a copy of those identifying numbers and your insurance card in your wallet, and keep a photocopy of your registration and insurance card at home, so you can provide information quickly to both law enforcement and insurance claims agents.

Don't assume your insurance covers you

Take a close look at your policy to see if you are covered for a replacement rental car if your car is stolen, and if there's a waiting period before you're allowed to rent a car. Many people don't elect the rental car coverage, but it costs only a few dollars a month. A year's worth of replacement rental coverage usually costs less than renting a car for a day or two, so it's a good deal.

Make sure you have roadside assistance

Your insurance company will likely offer this for a few dollars per term, or you can go through an outside company such as AAA or even your automaker. Be sure to research the details of the coverage. For example, if your car is broken into and disabled, are you covered for a tow to any mechanic, or only a dealer's service shop? Are both towing and labor costs covered?

Despite the bells, whistles and computer chips of today's technological vehicle theft-prevention devices, the most important theft deterrents are simple ones

Park in well-lit areas. If you park in a lot, resist the temptation to park near the exit, because it makes your vehicle a more likely target for thieves. According to the FBI, more than one-third of all vehicle thefts occur at a home or residence. So always lock your car, even in your own driveway.

For more tips on how to avoid auto theft, see Top 10 Ways to Steal a Car (and how to defend aganst them).