Coming home to find that someone broke into your home and stole your belongings can be enough to make you sick to your stomach. While we hope this never happens to you, it’s important to be prepared if it ever does.
The last thing you want to deal with after experiencing an invasion of privacy is having to pay to replace everything the thief stole from you. That’s where homeowners insurance comes in.
In general, homeowners insurance covers theft, as well as vandalism and other damage a burglar may cause to your home or personal belongings. It also covers everyone listed on your policy and guests staying in your home, including your college kid who lives on campus.
Today, we’re going to do a deep dive into what your homeowners policy covers and what it may exclude. Knowing where and when you’re covered and what your coverage limits are will help you avoid extra surprises when dealing with an already jolting experience.
When does homeowners insurance cover theft?
Three types of coverage listed in your homeowners insurance policy will help cover theft and any damage the burglar leaves behind.
1. Personal Property Coverage
If someone steals some of your personal belongings, like furniture or electronics, personal property insurance can help replace them. It can also help repair items that are damaged.
Let’s say someone attempts to steal your flat-screen TV, but drops and breaks it in the process. Your insurance carrier may reimburse you for the cost of your TV so you can repair or replace it.
Actual Cash Value vs. Replacement Cost
Make sure you understand the difference between actual cash value (ACV) and replacement cost. It can make a big difference when it comes to replacing your lost items. If your policy covers the ACV of your property, your carrier will replace items according to their fair market value, which accounts for depreciation.
Replacement cost, on the other hand, doesn’t factor in depreciation. Instead, it will allow you to replace a lost item with a new version of the same thing. Learn more about this essential concept in our recent blog post: “ACV vs. Replacement Cost: What’s the Difference?”
2. Dwelling Coverage
If someone damages your home by breaking in, such as busting through a door or window, your dwelling coverage can help pay for repairs.
3. Other Structures Coverage
If you have detached structures on your property, like a shed or garage, other structures coverage offers some protection for them.
Let’s say someone breaks into your shed and steals all your sporting and lawn equipment. Other structures coverage should help pay to repair the damage to your shed. Your personal property coverage can reimburse you for the stolen equipment.
Does homeowners insurance cover theft outside the home?
Sometimes it does. If someone steals from you at a concert or while you’re traveling, your homeowners insurance policy could offer you limited coverage.
Carriers will often cover a portion of your loss if it happens outside of your home and property—usually around 10% of your personal property coverage limit. Ask your carrier how much coverage you would have in this situation.
Does homeowners insurance cover theft from a car?
Yes! If you leave personal belongings inside your vehicle and someone steals them, your homeowners insurance should cover your loss. If the item is part of your car (like the stereo), however, you’ll need auto insurance coverage.
Does it cover car theft in general?
That would be a negative. If someone steals your car, you’ll need to rely on your auto insurance to cover your loss. Look specifically at the comprehensive coverage portion of your policy for car theft.
What types of theft won’t a standard homeowners insurance policy cover?
Your homeowners insurance will cover most of your stolen belongings. But there are always some exceptions.
If you carry a large amount of cash around with you, understand that your insurance company may only reimburse you up to a certain amount if it’s stolen. If the amount is less than your deductible, your insurance won’t cover your loss at all.
Your carrier will likely reimburse you for items like cash and jewelry—up to a limit. The same concept applies to various high-value items, like electronics, silverware, firearms, furs, art, antiques, and rare collectibles.
More than likely, your insurer will offer to reimburse you up to a specific limit. Ask your carrier what limits they place on different items so you know ahead of time.
You may also want to consider adding an endorsement or a scheduled endorsement for more extensive coverage for these types of belongings. Ask your insurance provider about your options.
Your Home Is Vacant
If you leave your home vacant, your insurance company won’t cover your property unless you take out a separate policy for vacant-home or unoccupied-home insurance.
You Don’t Take Proper Safety Precautions
If you fail to lock your door when you go on vacation or leave for the day and someone breaks in, your insurance company may not cover your losses.
How to File a Homeowners Insurance Claim for Theft
- Call the police, and report the burglary.
- Ask for a police report to share with your insurance company.
- Call your insurance agent to file a claim and ask all your pressing questions.
- Fill out the claim forms.
- Carefully follow the steps your insurance company gives you, including photographing all damaged items and taking inventory of anything you lost.
- Make temporary repairs to make your home as safe and secure as possible until a professional can repair it.
Keep in mind that before your insurance provider reimburses you for your lost or stolen items or damaged property, you’ll have to meet your deductible. So make sure it’s an amount you can afford to pay before your insurance kicks in to cover the rest.
If you need help reviewing your current insurance policy or would like to shop for new insurance, contact Coverage Direct. We’d be happy to answer any of your questions and get you quotes from some great companies to compare.