Your car has been stolen, but insurance may not cover the theft

MONTGOMERY, Ala. (WSFA) – Your car has just been stolen, but you’ve got insurance so you’re covered, right? Maybe not. One Alabama attorney’s office is calling out the state’s department of insurance for an exclusion that could affect many drivers.

“You could be walking to your car after a [Montgomery] Biscuits game, someone could beat you over the head with a crowbar, take your keys and your car and there would be no coverage for you,” explained Aaron Luck, an attorney with McPhillips Shinbaum.

Luck recently penned a letter and an email to the Alabama Department of Insurance and Gov. Kay Ivey to explain his concerns.

Luck’s letter claims the department has forgotten that its responsibility is to protect Alabamians and says the department allows insurance companies to avoid covering vehicle thefts when there is no evidence of wiring or forced start tampering.

And Luck adds that the provisions are in most insurance plans with minimum policies.

“It’s the department of insurance’s job to look out for the people who are just trying to get by and just not have problems,” the attorney explained, “and what’s happening is they’re allowing these insurance companies to profit on the backs of people who are paying these policies month after month, and when they reasonably expect they’re going to be covered, and they’re assaulted and their keys are stolen, they’re not.”

Acting Alabama Insurance Department Commissioner Mark Fowler sees things differently, however, issuing a statement on the matter to WSFA 12 News.

“There is no law in Alabama requiring theft coverage in automobile insurance, nor is there a law prohibiting exclusions for such coverage,” Fowler explained. “Alabama law does, however, require liability insurance on all automobiles. Therefore, if an auto owner chooses to purchase liability-only coverage, which would not cover loss of the automobile by theft or otherwise, they are lawfully free to do so.”

There is another option that could provide the vehicle’s owner with some protection, however, according to Fowler.

“If their automobile is financed, typically the lender will require [compensation]nand collision coverage, which would be approved by the lender.”

Addressing Luck’s letter, which included some examples of claim denials, the commission noted that “[b]y all appearances, the automobile policy in question contains provisions that are more commonly found in non-standard auto policies than in policies sold in the preferred or standard markets.”

The commission said Alabama “is fortunate to enjoy a strong, vibrant, and very competitive automobile insurance marketplace which offer consumers a variety of options from which to choose,” but urges consumers to shop around and talk with insurance professionals before buying a policy.

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