Does Homeowners Insurance Cover Theft?

Theft in your home is always devastating. But that’s part of the reason you should consider taking homeowners insurance. When considering homeowners insurance, many people wonder if it covers theft and break-ins.

The answer is yes, homeowners insurance policies cover theft. But the definition of theft that you’ve experienced may define the coverage that you get.

We took a look at homeowners insurance policies and theft coverage.

Does Homeowners Insurance Cover Theft at Home?

Typical homeowners policies include coverage for personal property. In homeowners insurance, loss because of theft is usually included as part of the personal property protection. Typically this means that if you encounter theft or break-in and loss of valuables from your home or detached structures, your home insurance policy should cover it.

Besides, most homeowners insurance policies also include coverage for your personal property outside of or away from your home. But this is subject to certain limitations.

Notably, the personal property limits in homeowners policies are typically set as a percentage of the value of your dwelling coverage. This is used to determine how much your insurance provider can reimburse you in the event of theft.

If you’re a victim of theft in your home, whether inside your home or outside of your home, your homeowners insurance policy may replace your stolen possessions. Besides, your policy may help you cover the cost of repairs to any property damage caused by the theft or break-in.

What Items Does Homeowners Insurance Cover Under Theft?

Typically, your homeowners insurance includes all the items covered under your personal belongings in your theft coverage. Some of these items may include:

  • Furniture
  • Electronics and appliances
  • Clothing
  • Children’s toys and bicycles
  • Lawn care equipment

Additionally, your homeowners policy’s theft coverage may add a cover to your exterior properties, such as:

  • Trees
  • Plants
  • Shrubs

You can include these to your policy at an additional cost depending on what your insurance provider offers.

Furthermore, your homeowners policy may also cover your personal belongings that you store off-site. For example, the cover can include large furniture you keep in a rented storage facility.

Note: The loss settlement of these items will depend on your type of policy coverage.

At What Point Does Homeowners Insurance Cover Theft?

Generally, homeowners insurance coverage protects your home against losses and damages, including those from break-ins and theft. The losses from theft are categorized under personal Property Insurance or personal belongings coverage.

Theft coverage on your homeowners insurance applies whether you encounter property loss or personal belongings inside or outside your home. However, this depends on the terms of your policy.

It is also important to distinguish whether your policy provides coverage under the Actual Cash Value (ACV) or the Replacement Cost Value (RCV). This will be spelled out in your policy.

If your policy spells out ACV, it means your homeowners insurance provider will reimburse you for the exact amount that your stolen (or damaged) property is currently worth. For instance, a home theatre system worth $1,000 five years ago could be worth $400 now. This is what you will receive as reimbursement for the theft.

Replacement Cost Value will reimburse you for the cost of replacing the same product in the current market. For instance, if your home theatre system cost $1,000 five years ago but is now $1,400, the provider will pay $1,400 to help you have the system back.

Who Is Protected Under My Home Insurance Policy?

Your homeowners policy does not protect everybody in your home. It will only cover the property of the people you list and would like to be covered when you first buy the policy, or the ones you add later. You can list your spouse and children and anyone else you’d want to be covered on the policy.

Depending on the provider, the list may also extend to other people living in different residences.

So, all the people listed under your homeowners insurance policy will have their personal belongings covered against theft.

For example, if you have a college student who lives on campus, your homeowners insurance will cover his property and personal belongings in the hostel room.

However, if the child moves to his own apartment (home), he will no longer benefit from protection by your homeowners policy away from campus housing.

Does Homeowners Insurance Cover Break-Ins?

Yes, homeowners insurance covers break-ins. Insurers categorize losses from break-ins into two, and homeowners policies cover both.

  • Loss of possessions, including electronics, laptops, cell phones, TVs, etc.
  • Damage to the home’s physical structure or detached structures due to the break-in.

Note: Coverage for damage to the house’s physical structure or its detached structures is dependent on the type of policy or the insurance provider.

Does Homeowners Insurance Cover Car Theft?

Homeowners insurance policy does not cover car theft. Car theft is the work of your comprehensive coverage if you have one.

However, your homeowners policy may cover your possessions that have been stolen from your car. But this applies if the possessions that have been stolen are not permanently attached or installed to the car. Possessions permanently installed in the car, for example, audio systems are covered by your comprehensive car insurance policy.

Does Insurance Deductible Apply to Homeowners Insurance Cover for Theft?

Yes, the insurance deductible is also needed in homeowners insurance. Like other insurance policies, when you’re buying a homeowners insurance policy, you’ll need to agree to pay a given amount of money upfront, out of pocket, before the claim is processed. This is the insurance deductible. Your provider will not make your claim payments until you meet the insurance deductible amount.

Homeowners Insurance Discounts For Theft-Proof Homes

Your provider may give you homeowners insurance discounts if you improve your home’s security and if you take steps that make your home theft-proof. For example,

  • Using “Grade 1” deadbolt locks on your doors increases your protection
  • Installing smart security home devices, such as burglar alarms and cameras
  • Connecting your burglar alarms and cameras to your local police

Note: Taking extra security steps on your home will help lower your homeowner insurance premiums and keep your home and belongings more secure and fully protected.

How Do I File A Homeowners Insurance Claim?

Theft is a risk we all resent yet expect. This is why we consider purchasing homeowners insurance. It would help if you have a clear, well-documented inventory of your home and belongings. If possible, you can have a video that captures everything in and out of your home to help the insurer evaluate your claims process.

When you encounter theft or break-in, you should act quickly and inform the police and insurance provider. But before anything, make sure your family is safe and secure. A police report of the incident is part of the documents needed to file the insurance claim.

Your insurer will send a representative to examine the situation and value the loss before your claim is settled. Also, you will need to pay the insurance deductible for the claim to be processed.

Final Word

Purchasing Homeowners insurance is a worthwhile venture. You may resent theft, but you do not know when it will happen. If it happens when you have homeowners insurance, you will not feel the weight of losing your belongings.