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Does Home Insurance Cover Theft?

Around 4,800 home burglaries take place every day in the US and 2,000,000 cases are reported every year. Nothing is more frustrating than coming home to find out a stolen TV or laptop after a long day at work. So, the moot question that comes up here is –“Does home insurance cover theft?” Well, in one word, “Yes”. Homeowners insurance does offer coverage for most of your items being stolen, both inside & outside your home.  Just make sure to inform your insurance company about the theft as fast as possible and most of your repair or replacement costs will be conveniently reimbursed.

What items are covered by home insurance?

A standard home insurance policy will provide cover for a multitude of items in the event of theft. These include:

  • Electronic & computer items– TV, stereo, desktop, laptop, tablets and also smartphones
  • Furniture– tables, chairs, décor stuff
  • Clothing– jackets, pants, hats, shoes etc.
  • Items from garage or storage rooms

Difference between ACV & RCV

It’s to note that homeowners insurance coverage for theft is of two types: coverage as per ACV (Actual Cash Value) and coverage as per RCV (Replacement Cost Value).

Now, what are ACV and RCV?

Well, with ACV, the reimbursement amount of the stolen or damaged item will be determined by “current worth” of the item. For example, let’s say you got your stereo 4 years back for $800. But if its market value has depreciated over time to, say, $400, your insurance company will reimburse $400 only if the stereo gets stolen in the present time.

On the other hand, with RCV, the reimbursement amount is decided by the cost it would take to replace the item in today’s market. Coverage based on RCV will be especially useful for items witness a higher market value over time.

Be careful to know beforehand which of the items your insurer lists under ACV and RCV categories.

What else is covered under home insurance policy in the event of theft?

Your home insurance policy not only offers coverage for the items stolen but also for your family members in the event of theft. The people who will be covered under the policy include all the names listed on the insurance policy. Even, if one of the members on the list is residing in a different place, he or she will receive coverage too. So, for example, let’s say your teen is presently staying in his college dorm. In case, any of his belongings gets stolen from his hostel room, he will get insurance coverage. But, if the person starts to stay in his/her own home, he won’t fall under the purview of your home insurance. So, be particular about these specifics beforehand.

Coverage for break-ins

A forced break-in is often the most common way for a burglar to invade your home. Such incidents not only witness theft of valuables from home but also significant physical damages to your property. Both kinds of losses will be covered by a standard home insurance policy. Any repair bill that you may incur due to a theft or a break-in in your property will be addressed by your home insurance policy.

What items won’t be covered?

This is also a very crucial point to note when we are discussing about homeowners insurance coverage in times of theft.

While home insurance is flexible to offer coverage for multiple valuables in the event of theft, it declines coverage or complete coverage for certain high end items.

It’s to note here that you won’t get protection from your home insurer if the burglars steal or damage your car. Your car will be treated as a “different” item that carries an independent insurance to its merit. Only if you take a comprehensive coverage comprising of both home & car insurance- then you will be adequately reimbursed.

But interestingly, homeowners insurance policy is ready to extend protect for items stolen from your car.

Now, comes the concept of limited coverage. A standard home insurance policy will follow restrictions on reimbursement amount for extremely expensive items. In other items, if some items cost a heightened replacement sum, it will come under the purview of limited coverage. Some of the best examples here are jewelry, antiques, cash, furs and so on. Put simply, items that will cost more than $5,000 to be replaced, will incur restricted reimbursement.

What to do when you discover theft at home?

The first step is to contact the cops. While cops are on the way, you should make note of items that have been stolen and the possible time of theft. If the burglars have damaged your property, you must get pictures of the damaged places. Then, you will call your insurer, inform about the mishap and finally file your claim. Your insurer would need police report and without it, the whole process will only be delayed.  The insurance may ask for additional details. Please make sure to reciprocate as fast as possible and try to be helpful.

If your home has incurred damage from the theft, it’s only natural that you will try to get the repairs done at the earliest. Make sure not to throw out the repair bills in trash as you have to produce them before your insurer for reimbursement. 

Your insurance company will take around a month to update the claims. In the meantime, be in touch with the insurer to keep track on the process.

Theft-proof your home for insurance discounts

You will receive handy discounts on home insurance if you can theft-proof your home beforehand. The best things you can incorporate here to arm up your home are:

  • Burglar alarms
  • Grade 1 deadbolt locks approved by ANSI
  • Motion lights along the external fence

Such measures will help you to save something like 2-15% discount on insurance – and the best part is that your home will have less chance to suffer from burglary and damage.