Does Home Insurance Cover Theft? Everything You Need To Know

Theft is a common and unfortunate risk that homeowners face.

Whether it’s a break-in at your home, a stolen purse from your car, or a missing laptop from a coffee shop, theft can cause financial loss and emotional distress.

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Home theft | Progresive

Fortunately, most homeowners insurance policies provide coverage for theft, both inside and outside your home.

However, there are some limitations and exclusions that you should be aware of before filing a claim.

In this article, we will explain how home insurance covers theft, what types of coverage are available, and how much you can expect to be reimbursed.

How Home Insurance Covers Theft

Homeowners insurance typically covers theft under the personal property coverage portion of your policy.

Protect your home illustration
Protect your home illustration

Personal property includes furniture, electronics, appliances, home decor, clothing, outdoor gear, exercise equipment, toys and games, musical instruments, and more.

If any of these items are stolen or damaged by a covered loss (including theft), personal property coverage may help pay to replace them.

Home insurance also covers theft that happens away from your home, such as when you’re at work, running errands, or traveling.

This coverage applies to you and any family members who live with you.

However, the amount of coverage for off-premises theft may be lower than the amount of coverage for on-premises theft.

For example, some policies may only cover 10% of your personal property limit for items stolen outside your home.

In addition to personal property coverage, other types of home insurance coverage can help if your home is burglarized.

Dwelling coverage can help pay for repairs if a burglar damages your home.

Other structures coverage can help pay for repairs to detached structures on your property.

Types of Coverage for Theft

The type of coverage you have may affect the amount of money you receive from your insurance company after a theft.

There are two main types of coverage for personal property: replacement cost and actual cash value.

Replacement cost coverage pays for the cost of replacing your stolen items with new ones of similar quality and value at today’s prices.

For example, if your laptop was stolen, your insurance company would reimburse you enough to buy a new one of similar quality.

Actual cash value coverage pays for the depreciated value of your stolen items, taking into account factors such as age, wear and tear, and obsolescence.

For example, if your laptop was stolen, your insurance company would reimburse you based on its current market value.

Replacement cost coverage usually provides more protection than actual cash value coverage, but it also costs more.

You can choose the type of coverage that suits your needs and budget when you buy your home insurance policy.

Limits and Deductibles for Theft

Another factor that affects how much you can get from your insurance company after a theft is your coverage limit.

A coverage limit is the maximum amount your insurer will pay for a covered claim.

Each type of coverage in your home insurance policy has a limit, and you can choose or adjust your limits to fit your needs.

For personal property coverage, you may have a total limit for all your belongings, as well as sublimits.

Sublimits are lower than the total limit and apply to specific types of items regardless of their total value.

For example, if your personal property limit is $50,000 and your jewelry sublimit is $1,000, your insurance company will only pay up to $1,000 for all your stolen jewelry, even if it’s worth more than that.

If you have high-value items that exceed your sublimits, you may want to consider adding a rider or endorsement to your policy.

A rider or endorsement is an optional coverage that provides additional protection for specific items or situations.

For example, you can add a rider for your engagement ring or your antique collection to increase your coverage limit.

Another thing to keep in mind is that most home insurance policies have a deductible for theft claims.

A deductible is the amount of money you have to pay out of your own pocket before your insurance company pays the rest.

For example, if your deductible is $500 and your claim is $2,000, you will pay $500 and your insurance company will pay $1,500.

Your deductible may vary depending on the type of claim and the type of coverage.

You can choose or adjust your deductible when you buy or renew your policy.

Generally, the higher your deductible, the lower your premium, and vice versa.

However, you should choose a deductible that you can afford to pay in case of a theft.

How to File a Claim for Theft

If you are a victim of theft, you should take the following steps to file a claim with your insurance compcompay.

1.Report the theft to the police as soon as possible and get a copy of the police report.

This will help you prove that the theft occurred and provide details of the incident.

2.Contact your insurance company as soon as possible and notify them of the theft.

They will assign you a claims adjuster who will guide you through the process and review your policy and coverage.

3.Make a list of the items that were stolen or damaged and provide receipts, photos, or other proof of ownership and value.

You may also need to provide serial numbers, model numbers, or appraisals for some items.

4.Cooperate with your claims adjuster and provide any additional information or documentation they request.

They may also inspect your home or ask you to submit a sworn statement of loss.

5.Review your settlement offer and negotiate if necessary.

If you agree with the offer, sign the release form and receive your payment.

If you disagree with the offer, you can dispute it with your insurance company.

Conclusion

Home insurance covers theft, both inside and outside your home, under the personal property coverage portion of your policy.

However, there are some limitations and exclusions that you should be aware of.

If you are a victim of theft, you should report it to the police and your insurance company as soon as possible.

By understanding how home insurance covers theft, you can protect your belongings and recover from a burglary.

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