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If you are a victim of theft, whether it occurs inside or outside of your home, your homeowners insurance coverage can help you to replace your stolen possessions. Your policy can also help you to cover repairs to any property damaged by a thief or burglar. However, there are some types of theft that are not covered by homeowners insurance. If you want to protect yourself against financial loss in case of theft, here's what you need to know.
When does homeowners insurance cover theft?
Standard homeowners insurance policies will cover your personal belongings if they are stolen inside or outside your home. Whether you are pick-pocketed in the street, or someone comes into your garage and takes your bike, you would be covered by your homeowners insurance policy. The most important thing to be aware of is whether you are covered for Actual Cash Value (ACV) or Replacement Cost Value (RCV).
ACV reimburses you for the amount your damaged or stolen item is currently worth, while RCV reimburses the amount it would cost to replace the same product in the current market.
Whether you are reimbursed for ACV or RCV depends on the type of homeowners insurance policy you initially purchased.
As we will discuss below, some high-value items have a limit on how much you may be reimbursed if they are stolen. Examples include musical instruments, jewelry, electronics and cash.
Who is protected from theft under your home insurance policy?
People listed under your policy—such as a spouse, child or anyone else you identify on the policy—will also have their personal possessions covered against theft. This extends to people living in different residences. If your child is away at college, they will be protected from theft should their electronics or belongings be stolen from their dorm room. You will need to talk to an agent for specifics, but generally once your child moves into their own home (not campus housing), they will no longer be protected by your home insurance.
Does homeowners insurance cover break-ins?
Losses from break-ins fall into two categories, and they're generally both covered by home insurance companies. The first is the loss of possessions, such as laptops and TVs. This type of loss is covered the same way as we discussed above.
The second type of loss is damage to the physical structure of your house or detached buildings. For example, a burglar could kick in, pry off or otherwise damage doors, windows, locks and other areas of your home. Some might target the home's copper pipes, which they hope to resell on the metals market. For such damage, your insurance can help with costly repair bills. Any resulting water damage caused by the ruptured pipes due to a copper theft would be claimable as well under your policy.
What types of theft doesn't your homeowners policy cover?
Your homeowners insurance will cover almost everything that can be stolen, with a few exceptions and caveats. Some things cost an above-average amount of money to replace, and for that reason, standard insurance policies limit the dollar amounts they will reimburse if these specific items are stolen—two common examples are cash and jewelry.
If your car is stolen, your homeowners policy will not cover that cost either. You need comprehensive insurance through an auto policy to be covered for car theft.
Homeowners insurance and stolen cash and jewelry
A homeowners policy can reimburse you for missing money, but only up to a certain dollar limit. Usually, this limit is around $200.
Lost or damaged jewelry is another high value item that is limited in how much will be covered.
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 can be added to your primary homeowners policy to help you insure rare or unusually high-value property.
Homeowners insurance doesn't cover car theft
If your car is stolen, you need to have comprehensive insurance on your car insurance policy to be covered for that loss. Despite being a personal property or a belonging, a car is a completely different category of possession to insurers, and gets its own insurance product.
One major exception is if you have personal belongings that were stolen out of your car. If your luggage or other belongings were taken from your car, then you can claim that loss under your homeowners policy.
Homeowners insurance discounts for theft-proofing your house
Taking measures to make your home "theft-proof" can net you savings in the form of homeowners insurance discounts. Many home insurance companies give discounts of 2% to 15% off the cost of premiums when you burglar-proof your home.
Below are a few things you can do to earn the discounts:
- Use deadbolt locks on your doors ranked "Grade 1" by the American National Standards Institute (ANSI)
- Install burglar alarms connected to local police
- Install motion lights around the perimeter of your home
These measures may cost you some money to install. However, you will want to consider the cost of the installation compared to the savings from the discount. You should call your agent or homeowners insurance company to get an exact amount for the discount.