I watched a video of a street takeover where police boxed in 15 cars. All were towed. One owner, a 22-year-old with a financed Charger, called me asking if his “Full Coverage” would pay the $500 tow fee and the $2,500 “30-Day Impound Hold” fee. The answer is a hard no. In fact, calling his insurance might have just alerted them to cancel his policy.
Key Takeaways
- Seizure Exclusion: Insurance covers accidental loss. It explicitly excludes loss resulting from “Seizure by Government Authority.”
- Crime Exclusion: Damage or costs incurred while committing a felony or fleeing police are excluded. Street racing is often a felony in 2026 statutes.
- The “30-Day Hold” is Punitive: The storage fees are fines disguised as fees. Insurance does not pay fines.
- Towing Coverage: Roadside assistance covers “Mechanical Breakdown,” not “Arrest.”
The “Why” (The Trap): The Government Action Clause
The policy states: “We will not pay for loss or damage caused by the confiscation, seizure, or destruction of the covered auto by government or civil authorities.”
If the police take your car because you were doing donuts, that is not a theft. It is a seizure.
Furthermore, the “Illegal Acts” exclusion prevents you from profiting (getting bills paid) from your own crime.
[IMAGE: Photo of an impound lot receipt showing “Storage Fee: $85/day” and “Admin Fee: $250”]
The Investigation: I Called Them
I asked adjusters: “My car was impounded by police. Will you pay to get it out?”
1. Geico
- Answer: “No. Impound fees related to legal violations are the driver’s responsibility.”
- Risk: The agent flagged the file. If the police report mentions “Street Racing,” the policy is flagged for non-renewal.
2. State Farm
- Answer: “We pay for towing if it was an accident scene. We do not pay for police impounds due to arrest.”
3. Traffic Attorney Perspective
- Advice: “Do not involve your insurance. Pay the cash. If the insurance finds out about a street racing impound, you will be dropped and blacklisted (High Risk SR-22).”
Comparison Table
| Scenario | Towing Cost | Storage Fees | Insurance Result |
| Crash (Accident) | Covered | Covered (Reasonable days) | Standard Claim |
| Stolen & Recovered to Impound | Covered | Covered | Standard Claim |
| Arrest / Street Racing | Denied | Denied | Policy Cancellation Risk |
Step-by-Step Action Plan
- Pay Cash Immediately: Every day the car sits, the fee grows. Borrow money if you have to. Get it out.
- Do Not Call Claims: Do not open a claim for this. It is below your deductible usually, and it exposes your driving behavior.
- Check for Damage: Tow drivers are brutal with impounded cars. If the bumper is ripped off during the tow, you might have a claim against the tow company (not your insurer), but good luck proving it.
- Lawyer Up: The impound is the least of your worries. The “Street Racing” charge will make you uninsurable for 3-5 years.
FAQ Section
What if I was just watching and got boxed in?
If you were cited for “Spectating” or “Aiding and Abetting,” the seizure exclusion still applies.
Does gap insurance pay if the police crush the car?
No. Gap insurance follows the primary insurance. If the primary denies coverage (due to seizure/crime), Gap denies too.
What if the car is financed?
The bank will eventually pay to get it out to protect their asset, then they will repo the car and sue you for the full loan balance plus the fees.