Homeowners insurance protects you from damage to your home or personal belongings within your home. However, there are some exceptions to the rule for some policies. This review highlights does homeowner insurance cover theft (and when it does not cover theft).
Does Homeowner Insurance Cover Theft?
Most homeowners insurance policies cover theft. This includes theft of any belongings inside or outside your home. There are two primary types of coverage — actual cash value coverage and replacement cost coverage. With actual cash value, the policy covers the cost of the stolen items at their current value after depreciation. Replacement cost coverage covers the replacement cost of the items when they are new.
Many policies also include theft that occurs away from the home, such as if your luggage is stolen while you are on vacation. It may also cover the cost of the personal property of your guests as well. Some policies also cover the replacement cost of personal property that is stolen from your vehicle(s) as well.
There are some exceptions to a basic homeowners insurance policy. Vehicles are typically included in the policy. Other expensive items may have a sub-limit as well, meaning the insurance company will cover up to a certain amount for certain stolen items.
Additional Insurance To Cover Theft and Break-Ins
There are certain policies related to homeowners insurance that specifically deal with theft and break-ins. This includes dwelling coverage, personal property coverage and other structures coverage.
Dwelling coverage is the part of your homeowner’s insurance policy that covers the cost to repair the physical structure of your home after a burglary attempt. Most insurance providers will repair damage to the home by using the same types of material that were damaged. While there may be a limit applied to dwelling coverage, most who make a claim do not reach the limit. Dwelling coverage can cover most or all damages to a home, including repairing or replacing the garage doors, window repair and siding repair.
Personal Property Coverage
When people refer to homeowners insurance covering theft they typically are primarily referring to personal property coverage. As mentioned, your policy will specify whether you have replacement cost coverage or actual cash value coverage. In either case, the policy protects against stolen property that occurs within your home and outside your home (i.e. hotel, dorm room, vehicle, etc.). Personal property coverage has a limit, especially on certain more expensive items, and it does not include stolen vehicles.
Other Structures Coverage
Other structures coverage refers to insurance coverage for structures around your home (typically detached structures). For example, other structures coverage may cover the replacement cost of property stolen from your detached garage, shed and barn. This typically also includes dwelling coverage and covers the repair and replacement cost of damage that occurs to these structures. However, there is typically a limit on other structures coverage. For example, your other structures coverage may include up to 40 percent of your dwelling coverage limit.
When Homeowner Insurance Does Not Cover Theft
There are certain scenarios where your homeowner’s insurance policy does not cover theft. Homeowners insurance may not cover theft in the following scenarios:
- When the car is stolen;
- When there is no police report;
- When the home is under construction;
- When the theft is committed by a named insured;
- When the home is vacant for an extended time;
- When the theft occurs to equipment away from the home; or
- When the theft occurs on rented property.
It is important to familiarize yourself with each applicable instance in which theft is not covered in your homeowner’s insurance policy. In general, the theft must occur on the property on which you reside, and there must be a documented police report. If the home is under construction or occurs on a part of the property that you are renting to someone else, then your claim may be denied as well.
What To Do If Your Home Is Broken Into
To ensure you receive prompt coverage after vandalism occurs at your home, it is important to handle the situation in an appropriate manner. The first thing you should do after theft occurs at your home is to call the police. This allows for a police report and potential investigation to see if any of the missing items can be retrieved. Be sure to also document any damage done to the property as well. You can then call your insurance agent and start the claims process to receive compensation for the theft.
Get Homeowner Insurance From Merchant Family Agency
Our team at Merchant Family Agency protects you from home theft. If you are currently without a reliable homeowners insurance policy, then call us today to start your policy. We can help you transition away from your current insurance provider or start a new policy if you are currently without one. We take pride in helping our clients remain financially protected in case they fall victim to theft.