Losing and replacing your car keys isn’t the simple task it used to be. Where a spare key could once be cut quickly and for a small cost, most of today’s vehicles rely on smart keys and key fobs paired with complex security systems, making replacements more costly and inconvenient.
On top of this, add in the statistic that 1 in 4 cars are estimated to be stolen using keys,1 and it’s hardly surprising that car owners increasingly ask whether car insurance will cover the cost to replace their lost, stolen or damaged keys.
In this guide, we’ll explain how car key and key fob replacement is typically handled by insurers – including Youi – and how to make a claim. We’ve also included some practical tips to help reduce your risk of car key theft.
Are car keys covered under insurance?
As with most insurable property, cover for car keys varies between insurers and policies,2 and will depend on your individual circumstances.3
“However, generally speaking, while certain car insurance policies will cover you for stolen car keys, lost or damaged keys are typically not covered,” says Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.
“So that’s usually the biggest deciding factor in whether your missing car keys will be covered under insurance: have they been stolen or have you simply lost or misplaced them?”
Below we look at some common scenarios to help you determine if you’re covered for key loss, including when insurance may cover key replacement and how roadside assistance might be able to come to your aid.
Are stolen keys covered by insurance?
At Youi, our Comprehensive car insurance and Third Party Fire & Theft insurance policies will cover your car keys if they are stolen.4
“More specifically, we’ll cover the cost for a locksmith to replace or recode your car locks and keys, up to the value of $1,000 after excess,” says Jackson.
My car was stolen with the keys inside – am I covered?
If you have the misfortune of your car being stolen after you’d left your keys in the car, it’s unlikely you’ll be covered for the theft or attempted theft of your car.4
“If you leave your keys in the ignition, or anywhere else in the car, and your car is stolen, you may not be covered,” warns Jackson.
“So it’s important that drivers be vigilant with their keys.”
Do I need to report the theft of my car keys to the police?
If your car keys have been stolen, and you wish to make an insurance claim, you’ll need to report the theft to the police so they can issue you with an incident number. Your insurer will ask you for this when you make your claim.5
As best practice, Jackson recommends reporting the theft to police as soon as possible – and making a note of the incident or report number that police provide.
“Making a report to police is actually part of the responsibility of policy-holders, before they can make an insurance claim for theft,” adds Jackson. “And it might even help improve your chances of your stolen keys being recovered.”
Will I have to pay an excess if I claim for stolen keys?
As a general rule, most insurance policies have an excess that you must pay as a claimant, before a claim can be settled.3 If you’re making a claim for stolen car keys with Youi Comprehensive car insurance or Third Party Fire & Theft insurance, the excess agreed to in your policy schedule will apply.4
“It’s always a good idea to carefully check the Product Disclosure Statement as well as your policy schedule – which notes the agreed excess and all conditions of your policy – before you make a claim,” says Jackson.
Are lost car keys covered by insurance?
While stolen keys are generally covered by various car insurance policies, different rules apply for keys that have been lost or misplaced. In most cases, they will not be covered.4
Does Roadside Assist cover lost or locked-in keys?
One of the many benefits of Youi Roadside Assist, which comes as standard with our Comprehensive car insurance and Comprehensive motorcycle insurance policies,4,6 include support if your car keys or bike keys are lost or locked inside your vehicle.7
“We know it’s stressful for drivers when they’ve lost their car keys or locked them inside their car,” says Jackson.
“Through Youi Roadside Assist, which is available 24/7, if your keys are lost – but not stolen – or locked inside your vehicle, we can arrange for your spare key to be delivered or help you gain access to your vehicle to get you on your way again sooner. The most we will pay for this service is $250.7
“Just be aware that if you’ve locked your keys in your car and insist on a ‘break in’ service to recover them, you’ll be responsible for any damage that might occur during the process – and that not all Roadside Assist providers will necessarily agree to offer that service.”
Are damaged key fobs covered by insurance?
“A key fob isn’t technically part of the car – instead, it’s considered to be part of the ‘ contents of the car’,” says Jackson.
“Standard car insurance policies typically don’t cover contents, such as key fobs, unless they’re damaged in the course of an insured event – such as a fire, flood or vehicle theft.
“For context, under Youi’s Comprehensive car insurance and Third Party Fire & Theft insurance policies, you’ll be covered for up to $150 for a single item that’s damaged during an insured event, up to a maximum of $750 per claim.”
What does car key replacement usually cover?
In the insurance world, if you have “key replacement” as a benefit listed in your policy, it essentially means that in the event of a successful claim for an insured event your insurer will pay to:
- Replace your keys
- Recode your keys and car locks
- Cover locksmith fees.
“Keep in mind, though, that an insurer may place a dollar limit on key replacement, which means the insurer will pay up to a set amount per claim. If replacement costs exceed that limit, the remaining expense is usually your responsibility,” explains Jackson.
“These limits can vary between insurers, and some policies may not include key replacement cover.”
What type of car insurance covers key replacement?
With Youi, the replacement and recoding of stolen car keys is covered under both our Comprehensive car insurance and Third Party Fire & Theft insurance policies, up to the value of $1,000 after excess.4
How can I claim key replacement on insurance?
Making a claim for key replacement with Youi is simple using our 5-step car insurance claims process.
Step 1: Lodge
Claims can be lodged over the phone or anytime online. You’ll need your policy number and police incident number handy, which police will have provided when you reported your keys stolen.
Step 2: Assess
We’ll evaluate your claim, outline what happens next, provide regular updates and let you know if your claim is accepted.
Step 3: Action
If your claim is approved, we’ll move forward with arranging a replacement key.
Step 4: Track
Keep tabs on your claim with our online tracker so you’re never left wondering what’s happening or what comes next.
Step 5: Resolve
Once your key has been replaced and coded and your claim is settled, we’ll close the file. If there’s anything you’re uncertain about, we encourage you to reach out to our claims crew who are more than happy to talk through any questions you may have.
How to help prevent car key theft
To help keep your car keys out of the wrong hands, here are some basic recommended steps you could take:
- Always take your car keys with you.1
- When at home, leave your car keys in a safe place.1
- Never leave spare keys in your car, even if hidden.1
- If you leave home without your car, don’t leave your keys in plain sight.1
- Never put your name or address on your car keys.8
New technologies, such as a Faraday box or bag which blocks transmission of radio signals from the key fob,9 might also help motorists reduce the risk of car key and vehicle theft.10
Now that you know more about how car keys may be covered under car insurance, it might be a good time to review your policy and ensure you’re appropriately covered. Looking to see whether one of Youi’s car insurance policies might be a good fit for you? Check out our range of policies or consider starting a quote online or by giving us a call on 13 9684.
1 Source: ACT Policing – Vehicle Security
2 Source: Moneysmart – Car insurance
3 Source: Moneysmart – Claiming on your car insurance
4 Exclusions, limits and additional fees may apply. For full details, see the Car Insurance PDS.
5 Source: Canstar – What to do if your car is stolen, April 2025
6 Exclusions, limits and additional fees may apply. For full details, see the Motorcycle insurance PDS.
7 Youi Roadside Assist available with Comprehensive policies only. Exclusions, limits and additional fees may apply. For full details, see the T&Cs.
8 Source: Victoria Police - Motor vehicle theft
9 Source: CarsGuide – A Faraday box for car keys –What is it? How does it work? How much does it cost and do you need one?, May 2025
10 Source: Drive – ‘The issue is significant’: Experts issue keyless car theft warning, March 2024
