But here are three realities about your insurance to keep in mind, because they may reduce what you might expect to receive from a claim, and perhaps prompt you to seek additional coverage.
The Full Replacement Cost May Not Be Covered
One important difference between policies is whether they reimburse for the actual value or the replacement cost for the stolen item. For example, if you bought your TV five years ago, its actual value may be $700. However, you might need $1,200 to buy a new TV with the same bells and whistles. Also, there may be limits to how much the policy will reimburse you to replace a high-value possession, such as jewelry. There is also guaranteed replacement cost which is important in states like Florida. Guaranteed replacement is important after serious storms where the cost of labor and supplies may go up; a normal policy may not account for that extra cost, leaving you to pay for it out of pocket.
The acronyms to look for in your policy are ACV and RCV. ACV reimburses you for the amount your damaged or stolen item is currently worth, while RCV reimburses you for the amount it would cost to replace the same exact product in the current economic market.
Out-of-Home Coverage May Be Less
Most people expect homeowners insurance to cover theft from inside their homes. However, the coverage does much more than that. If your property is stolen miles—or even thousands of miles—away from home, your policy may reimburse you for some or all of the cost to replace it.
While homeowners insurance offers protection far from home, the coverage limits might vary based on where the loss occurred. For example, if you lose something to theft—such as a $1,500 laptop—at the bus stop, your policy limits might be much lower. If the laptop was stolen from your home, you might be covered for 100% of its value, after you pay the deductible. That might change to 15% or 20% when the laptop is stolen during your commute.
Claims Are Capped For Some Items, And Cities
After you pay your deductible, your homeowners insurance will reimburse you for some or all of the costs to replace items that are stolen from you. But some things cost an above-average amount of money to replace. For that reason, standard insurance policies limit the dollar amounts they will reimburse if these specific items are stolen.
What if cash is stolen from me? Say, during a holiday shopping trip to the mall, you stop to eat at a crowded food court. While you are distracted, someone steals your purse from the back of your chair. You lose $800 in cash and several $50 gift cards.Or during a burglary at your house, thieves steal several items along with $600 from your bedroom.
A homeowners policy can reimburse you for the missing money—but only up to a certain dollar limit. Usually, this limit is around $200. So. if you have a $500 deductible to meet, you would not file a claim for the $150 loss because it is less than $500.
However, you might want to claim losses that exceed $500, such as the mall theft and the total losses—property and cash—from the home burglary.
Your wedding ring might be worth $10,000. But if it is stolen, your homeowners insurance might cap the reimbursement at a lower limit, such as $2,000.
If you have jewelry, antiques, art, coins or other possessions worth $5,000 or more, you may want to consider a “personal floater” policy. This coverage is added to your primary homeowners policy to help you replace rare or unusually high-value property.
Keep in mind that some homeowners policies include broader coverage than others for personal property. If you live in a city with higher-than-average property crime, your policy may not cover, or have lower coverage limits, for certain items stolen in or away from home.