You’ve been robbed — your first thought might be whether your homeowners insurance covers theft. The good news is that, yes, in most situations, your homeowners insurance will cover theft, but there are some nuances to coverage that you’ll want to investigate to ensure you have the protection you want.
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Does Homeowners Insurance Cover Theft?
Yes, in most situations, homeowners insurance will cover theft. Not only that, but most insurance policies will also cover theft-related damage. For instance, if the burglar breaks a window while entering your home, the window is covered in your insurance claim.
Even better news, your homeowners will cover the theft of your personal belongings inside and outside your home. This can include having stuff stolen from your vehicle or a hotel room. Theft is one of the named perils on most insurance policies, but reading your policy details will help you further understand what is explicitly covered.
Does Homeowners Insurance Cover Break-ins?
Homeowners insurance covers you in the event of a break-in or burglary in a variety of ways.
The first coverage will revolve around your dwelling. If damage occurs to your home during the commission of the crime, insurance covers damage repairs.
If the burglar broke into your shed or another detached structure, it falls under your other structure coverage, and the damage is covered.
Finally, a vital part of the burglary is the possessions taken. These stolen or damaged items is covered under the personal property section of your homeowners insurance.
Does Homeowners Insurance Cover Theft from a Car?
If possessions are stolen from your vehicle, your homeowners insurance will typically cover the replacement of your property, not your car insurance. However, your auto policy will cover any damage to your vehicle.
Does Home Insurance Cover Stolen Cash?
Keeping cash in the home is typically not a good idea, and you’ll find minimal coverage if it’s stolen during a break-in. You can claim it on your homeowners insurance, but you will not get as much coverage as you would your possessions.
Does Home Insurance Cover Items Stolen Outside of My Home?
Homeowners insurance covers theft outside the home, a great benefit.
Common situations include coverage if a wallet or purse is stolen, your luggage is stolen on a trip, or your child’s dorm room is burglarized. You might even have coverage for a houseguest staying with you who has their property stolen from your home.
When Does Homeowners Insurance Not Cover Theft?
Homeowners insurance doesn’t cover all situations of theft, each policy is different, but the following are times when your insurance will not cover you:
- Unreported theft: Most policies have a time limit for submitting a claim after the burglary. You might not be covered if you overlooked a theft until months later.
- One of the policyholders was the thief: Insurance won’t cover the loss if you’re named as someone who lives in the home, and you stole from another person in the house. They also won’t cover fraudulent claims of theft of your items.
- You’re not living there: This can be an essential factor for people who live in more than one home. If you are gone from your residence for several months, your insurance may not cover a burglary that happens while you’re away. Other policies can help if this is your situation.
- Theft from a rented room: If you rent out a room or part of your home and that space is burglarized, your homeowners insurance will not cover the loss. This is where renters insurance is applicable.
Again, reviewing your specific policy is vital because there can be a lot of differences, and getting the right coverage for your situation requires some customization.
How Much Insurance Do I Have for Break-ins?
Because everyone’s homeowners insurance is a little different, the amount of coverage you have will vary. A close inspection of your policy will tell you what coverage you have and where there might be gaps in protection.
Common limitations in theft coverage include caps on liability, called sublimits. These sublimits list the maximum amount the insurance will cover for specific items. One standard cap is on cash, which is often limited to $200. Your petty cash or rainy-day fund at home is likely more than this, but that’s the highest amount that most insurance policies will cover.
Limits on expensive items like jewelry, collectibles, and art might protect you better with an additional policy. If you feel that your policy does not entirely cover your property effectively, there are some other protections to consider.
Coverage Limits and Deductibles
One way to increase the amount of coverage you have is by changing your coverage limits and your deductible. A deductible is an amount you must pay before your insurance kicks in to pay for the remaining costs. The coverage limits are the upper amounts your insurance will pay for your property. Adjusting these amounts can give you more coverage but also increase your premiums.
Dwelling Coverage to Help Repair Break-in Damage
The dwelling portion of your homeowners insurance is known as Coverage A, which protects the home. You can get a separate dwelling coverage policy that covers the structure, but dwelling coverage is a primary feature of most homeowners insurance. Adding dwelling coverage to homeowners is unnecessary.
Where you may find that your homeowners insurance isn’t enough is if there are any limits. Typically, this isn’t a problem as the home is insured for more damage than the average break-in causes.
Personal Property Coverage to Help Replace Stolen Belongings
Another critical part of your homeowners insurance is personal property coverage. If you have a break-in, replacing stolen items will fall under your homeowners policy but only up to the policy’s limits. If you’re concerned about not having enough coverage, you might want to increase this portion of your insurance.
Sub-limits on Certain Valuable Items
Sub-limits are an essential part of homeowners insurance when it comes to theft because they can significantly limit the amount of coverage you have. For instance, if you have a valuable piece of jewelry worth $10,000 and your homeowners policy has a sub-limit of $1,500 in jewelry losses, there will be an $8,500 shortfall.
Increasing your personal property sub-limits can add coverage, but it will also add to your premium. Taking out a scheduled personal property endorsement is another way to extend your coverage but comes with extra fees too.
Other Structures Coverage to Help with Garage Break-ins
Most homeowners policies include other structures, such as a detached structure, a shed, or other buildings. These structures typically cover both named and open peril situations. Therefore you receive coverage up to the policy limits.
One thing to note is if your policy requires you to lock the door. Sometimes policies state that you must take reasonable steps to protect your property, including locking doors.
Additional Homeowners Insurance Theft Coverage to Consider
If you’ve reviewed your homeowners insurance and believe you want extra coverage in the event of a theft, there are a few areas to dig into more deeply.
- Increase personal property limits. Without taking out an add-on or endorsement, you might be able to keep your homeowners insurance and raise your sublimit levels.
- Scheduled personal property coverage. This endorsement gives you higher limits for valuable items and can extend coverage to items you’ve lost or misplaced.
- Home-based business add-on. If you work from home and have expensive equipment, this insurance rider will help you recover those losses if there is a theft. Add-ons benefit people who store expensive work gear in their home or garage.
The cost of these additional policies will depend on how much extra protection you need. For example, adding a rider for an engagement ring will add a few extra dollars to your premium, whereas adding coverage for an entire slew of video production equipment can quickly increase your rates.
Identity Theft Coverage
According to IdentityTheft.org, there is an identity theft case every 22 seconds, which is a growing crime. There is a wide range of identity theft, from pretending to be someone else on social media to entirely assuming another person’s life and access to their credit cards and bank accounts.
An identity theft endorsement can be a valuable addition to your homeowners policy and protect you from this type of theft. This insurance does not financially help you; instead, it steps in and offers the resources and assistance you need to reverse the fraud, fix your credit score and get your identity back. These protection costs range from $10 to $300 a month, depending on the policy you buy and the services they offer.