Risk Update - Cover for multiple vehicle key loss

Today’s vehicle keys are rather different to what they were in the years between cars first having keys in the 1950s and the 1990’s when remote locking keys first appeared on the scene. The latest car keys have developed significantly since then. Today, whilst security concerns abound, keyless-entry cars are available that can be locked, unlocked, and started without inserting a key or straight from your phone.

Most cars manufactured today have a transponder key, many also with a traditional key for added security, some more advanced than others, to lock, unlock and start a vehicle. The cost of replacing a transponder key typically varies between £300 and £1,000. - Seven steps to get a car key replacement | AutoTrader

What’s the risk

The worry for a fleet operator is what would happen if your key safe or similar was somehow accessed and all your keys were taken at once. If keys are stolen, then having a spare set of keys is of little benefit if whoever stole the keys is likely to be able to identify the vehicle to which they belong. Assuming that is the case, then the key and the lock mechanism for all vehicles affected may need replacing.

If fire breaks out at the premises where you keep your vehicle keys when not in use, and all your keys are destroyed at once, then the problem may be less acute, albeit still costly, if it is only the keys that need to be replaced rather than the vehicle lock mechanisms as well.

Insurance issues

The cost of replacing vehicle locks and keys following loss, or theft by violent and forcible means, may be covered under a commercial motor, motor fleet, or motor trade road risks policy. If you have a motor trade policy, you may also have cover under the material damage section of your policy for vehicle keys lost or stolen at the premises.

But there are issues. A limit any one vehicle and / or any one event and / or any one period of insurance may apply, which, if several keys are stolen at the same time, may mean you do not have enough cover.

From a motor insurance cover perspective, it is important to make sure you have sufficient cover for lost or stolen keys. Make sure cover includes the cost of:

• Replacing the locks to the door and / or boot
• Replacing the ignition / steering lock
• Replacing the lock transmitter and central locking interface
• Recoding and / or replacing any vehicle-related alarm system if that’s necessary

And check what the limits are under your motor policy for loss or theft of motor vehicle keys:

• Motor fleet policies may have a cover limit per vehicle for lost or stolen keys
• Specialist self-drive motor fleet and motor trade road risks policies may provide cover for loss of keys up to between £10,000 and £50,000 any one event, or they may have a limit per vehicle
• If a substantial number of keys are stolen, all at the same time, the standard policy limit may be insufficient

It is also essential to understand what precautions you may be required to take under the terms and conditions of the keys cover under your motor insurance policy. Requirements may for example include:

• During business hours, keep keys to unattended motor vehicles in a securely locked place, out of sight of the public
• Outside business hours, remove keys to unattended motor vehicles from the premises or keep them in a locked safe or purpose-built keys cabinet approved by the insurer within an alarmed part of a building at the premises and remove the keys to the key cabinet from the premises
• Take keys to the premises off site when leaving them unattended
• When an employee leaves the business, take action to prevent theft, including the removal of any access keys held by the employee, changing alarm or security codes that the employee may know and switching off access to computer systems

Prevention is better than cure

From a key theft perspective, prevention is better than cure. Taking all reasonable steps to prevent the theft of keys, and making sure you comply with all policy terms and conditions relating to whatever keys cover you have, is essential. Measures to consider, if not already taken, include:

• Installing an insurer-approved key safe in a physically secure and alarmed part of your premises.
• When premises are unattended, removing vehicle keys from the premises.
• When removing keys from the premises, consider sharing them between key individuals.
• Installing an insurer-approved key safe in the homes of those taking vehicle keys away from the premises.
• Using secure key safes in peoples’ homes not just for vehicle keys, but also for premises keys and key safe keys.

Particularly important when taking risk management measures is to make sure the business practices you adopt and the measures you take are agreed with your insurer.

If you have any questions about keys cover under your insurance policy(s), speak to your usual Towergate Insurance contact.


Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.