Homeowners insurance covers theft because theft falls under personal property protection. However, there are exceptions and limitations to every home insurance policy. If you become a victim of theft, you need to know what you’re covered for.
According to the FBI:
Typically, your average policy is about 50% to 70% of dwelling coverage. Other insurance companies allow you to choose from many coverage options, such as $100,000, $300,000 and $500,000. However, home insurance comes with limitations or sub-limits for specific items.
In this post, I will discuss:
Let’s get started with this post.
When Does Homeowners Insurance Cover Theft?
Homeowners insurance protects more than just your home and everything in it. When it comes to your personal belongings, you’re covered whether they’re stolen inside or outside your property. Whether they’re stolen from your bedroom or your hotel room, home insurance can replace your stolen items.
Here are a few other situations when your homeowners insurance policy comes in handy:
When Doesn’t Homeowners Insurance Cover Theft?
While your standard homeowners insurance policy usually covers theft, there are certain situations when your claim may be denied. Here are a few to consider:
How Much Personal Liability Coverage Do You Get?
Your standard home insurance policy usually covers 50% to 70% of your dwelling coverage. Some insurance companies offer you various amounts of coverage based on how much liability coverage you need (usually $100,000, $300,000, and $500,000, respectively).
Special Limits Of Liability For Valuables Stolen
Personal liability comes with limitations. You might have $500,000 worth of coverage, but it may not all be covered if a burglar stole $500,000 of your personal property. Let’s say you have $100,000 in personal property coverage, but the coverage for your jewelry has a limit of $1,500. If a burglar steals $2,500 worth of jewelry, you’re only covered for the first $1,500.
Here are some of the common most personal valuables and their liability limits you’ll see in many homeowners insurance policies:
Trailers and watercraft
10% of your coverage
Additional Theft Protection You Should Consider
Homeowners insurance policies are great, but they don’t always provide you with total protection. Here are a few ways you get additional coverage.
Scheduled Personal Property Coverage
You can purchase extra protection for your valuables. Once you reach your liability limits on those particular valuables, the additional coverage can kick in and reimburse you for the rest. If you’re someone with $2,500 worth of jewelry, make sure it’s all covered.
Identity Theft Coverage
Sometimes, a thief steals more than your property. If your identity is stolen, this endorsement reimburses you for any expenses you might incur while recovering your identity.
Raise Your Sub-limits
You may be able to increase the sub-limits on specific categories or items. Usually, this involves paying a higher premium, but it may be worth it if you have valuable collector’s items or jewelry. Talk to your insurance agent about your coverage options.
How To Make An Insurance Claim For Theft
To ensure your claim is accepted, you should do the following:
Contact The Authorities
If you experience a theft or break-in, contact your local police department ASAP. As I mentioned earlier, you need to claim a file with your insurance company within 60 days of the theft. Your insurance company usually requires a copy of the police report before processing your claim.
Take photos and videos of where your valuables were stolen and any damage caused to your property. You should also write a list of everything taken. If you have the receipts for them, that would also be a huge help.
For extra credit, take inventory of all your personal valuables and how much they’re worth. Doing so will show you how much coverage you should buy, and provide you with an itemized list of what you own and its worth.
Answer Any Questions Or Requests
Your insurance provider may send a claims adjuster to inspect your home, depending on the situation. Sometimes, they won’t investigate the claim at all. If they decide to investigate your claim, try to provide them with any additional information they need. This may include bank or credit card statements or other information pertaining to your stolen property.
Get Homeowners Insurance Discounts By Safeguarding Your Home
As I mentioned earlier, homes without a security system are 300% more likely to be robbed. Homeowners insurance companies frequently offer discounts for theft-proofing your home since it provides added protection. Some companies offer 2% to 15% off the cost of premiums, and then some even offer additional discounts the longer you go without filing a claim.
Here are a few ways to theft-proof your home:
While these items cost money to purchase and install, the discounts you get on premiums and the additional peace of mind are well worth it.
To recap, here’s what homeowners insurance typically does and does not cover:
Does Not Cover
Stolen personal property in your home
Theft committed by someone on your policy
Your guests' stolen personal property in your home
Theft unreported within 60 days
Personal belongings in your car
Theft that occurs during an extended vacancy
Damage caused by a break-in
Theft from a rented unit on your property
Your dependent’s dorm room personal property
Theft of campers, watercrafts, or trailers away from your property.
Homeowners insurance is incredibly useful when it comes to theft. However, it’s not always enough. Take inventory of your personal valuables to determine how much coverage you need and what types of special coverage you should purchase. Then, protect your home by taking additional measures to safeguard it from thieves, and enjoy the discount premiums and peace of mind that comes with it.