Does homeowners insurance cover theft?
Yes, standard homeowners insurance provides coverage against loss due to theft. Most policies include coverage for the structure of a home, personal belongings, liability protection and additional living expenses.
Dwelling coverage pays for structural damage sustained during a break-in. Personal property coverage helps you replace stolen possessions and fix damaged items. To fully understand what your homeowners policy covers, you’ll have to read the fine print. Coverage may vary depending on the company that’s providing your insurance. To find out more we asked our Director of Underwriting, Mike Gulla to share his wisdom:
What’s covered following a theft
If your personal belongings — like your appliances, furniture, clothing or sports equipment — are stolen from your home, your homeowners insurance policy will cover part of your loss. In general, coverage for personal items that need to be repaired or replaced accounts for 50% to 70% of the amount of insurance you have on your home’s structure. Keep this in mind when you’re reviewing your policy and consider whether you’ll need additional coverage.
Creating a home inventory video is a good idea if you own a home. Following a break-in, having a detailed list of the items that were stolen or damaged (and visual proof that you owned them) will help you assess the total value of everything that was lost. And it will save you some time during the insurance claims process.
Items stored outside of your home are covered under most standard homeowners insurance policies. Some insurers limit coverage for belongings in external locations to 10% of the coverage designated for personal items. So if your possessions are stolen from a storage unit, car or hotel room, there’s a good chance that your insurance policy will cover a portion of the loss. Often, there’s also a provision for unauthorized use of credit cards. Inclusions, exclusions and limits all vary by policy and provider.
So what’s not covered by homeowners insurance following a theft? Most providers leave vehicle theft out of their homeowners policies. Your car insurance will cover that.
There’s a difference between insuring your home based on its replacement cost and its market value. As its name suggests, the former reflects the cost of repairing or rebuilding an entire home. Your home’s market value, on the other hand, reflects how much it would cost to purchase your house and the land it’s sitting on based on its age and condition. If you own a home, it’s a good idea to insure it for 100% of the property’s estimated replacement cost.
Personal property limits
Some homeowners have valuables that are worth a lot of money (think: jewelry, furs, fine art and collectibles). Your homeowners insurance policy likely limits coverage for these items. Some carriers cap coverage at a dollar amount between $1,000 and $2,500. In the event of a theft, you’d have to pay the remaining replacement cost out of pocket.
Some providers, like Hippo, have increased limits for items like computers and home office equipment. You should speak to your insurance agent to discuss your policy’s limits and whether you need supplemental coverage.
Supplemental contents insurance
If you have valuables that aren’t fully covered under your homeowners insurance policy, you may want to add a floater, rider or endorsement to provide additional protection.
How does supplemental contents insurance work? You’ll have valuable items on your policy scheduled so they’re fully protected if they’re stolen or they mysteriously disappear. Since the value of each item you wish to schedule will affect the cost of your insurance premium, you’ll need to have each valuable appraised. Then you’ll know the true market value of your most expensive items.
You may be able to schedule items based on their replacement cost or an agreed upon value. If your insurer gives you an option, you’ll have to decide whether paying extra money to have your valuables fully insured is worth it. Many homeowners would say it is, especially if you consider that this insurance covers not just loss due to theft but mysterious disappearances (in or out of the house).
Filing a theft claim
Theft can be devastating. Someone not only took things you own of monetary and sentimental value, but they also violated your private space. Following a break-in, it’s important to act quickly to minimize losses.CLICK TO TWEET
Theft can be devastating. Someone not only took things you own of monetary and sentimental value, but they also violated your private space. Following a break-in, it’s important to act quickly to minimize losses.
Once you’ve made sure that your family members are safe and secure, contact the police and file an insurance claim. Provide your insurer with a copy of your police report and detailed information about any damaged or stolen property. Without a police report, the claims process may be delayed. If your insurance company requests any additional information, respond in a timely manner.
Your provider may take a few weeks to update your claim status. If necessary, you can follow up. Keep copies of all correspondence for your own records. Ask for customer service representative names and note the date and time of all calls. If there are emergency repairs you need to make, be sure to keep up with your receipts. You’ll need them if you want your insurance provider to reimburse you.
Protecting your home from theft
According to the FBI’s crime report, there were nearly 7.5 million burglaries, robberies and larceny-thefts across the country in 2016. Among homeowners who dealt with theft between 2011 and 2015, the average amount paid per claim was $3,990.
To prevent someone from getting into your home and stealing your belongings, you’ll need to ensure that your home isn’t an easy target. Make sure your property is well-lit and difficult to break into. If it takes a thief more than four or five minutes to break into your home, he or she will likely move on.
To secure your home, start by purchasing basic items like padlocks, deadbolts and window grates. Invest in a burglar alarm and if possible, security cameras that you can place at key entry points. If robbers believe they’re being watched, they’re less likely to approach your home. When you’re on vacation, your home should look occupied. Ask friends and neighbors to keep their eyes peeled for suspicious activity.