That could be true. I don't know what the law is in Pakistan, but if here the insurance settles and gives the owner the money, I think the car belongs to them if found- beneficial interest for the insurance company in a way because they can be re-sold in auctions.
But when stolen cars are recovered, they have usually been gutted and chopped for parts. Usually these stolen cars are sold at auction and sold for a huge huge discount to new owners after being reconditioned, but getting them re-insured is sometimes a bigger hassle depending on who you insure it with, and it might be more expensive at times because it's a greater liability for the insurance company.
