Homeowners insurance has personal property coverage that covers all personal property in your home. If you come back from work one day and find your house has a broken window and an empty space where you used to store your cash, you’ll be able to make a claim for theft. If the same thing happens in your car, you could lose thousands of dollars worth of property. Will you be covered outside the home? Insurance companies treat the circumstances of the theft differently. This guide will show you the best ways to get reimbursed for personal property in a car. We’ll specifically focus on the way popular policies such as HO-3 and HO-5 treat vehicle property theft.
Does homeowners insurance cover theft from car? Yes, homeowners insurance policies such as HO-3 and HO-5 cover theft inside a vehicle. If your personal items (i.e. laptops, clothes, phones) are stolen inside the vehicle, your homeowners insurance policy will cover them. The main difference is where the theft occurred. If the car was parked inside your home garage when the theft occurred, you will be covered up to 100% of your coverage limit. If the theft occurred outside the home such as a private parking spot, you’re only entitled to 10% of the coverage limit.
How Home Insurance Treats Vehicle Theft
Homeowners insurance includes a clause for personal property that extends off-premise (away from your property). The main downside is that this coverage is limited to 10% of the total claim limit on personal property. This means that when you add in a deductible, it may not be worth it filing a claim for property stolen outside off-premise. You’ll be covered for property such as clothes, electronics, furniture, and other personal items stored in the car. It’s up to you to decide whether or not filing the claim is worth it, based on the value of the stolen items.
The following are examples of when homeowners insurance would cover you outside the premises of your home:
- Personal property is stolen inside your vehicle when it’s parked outside.
- Personal property is stolen when you’re traveling abroad.
Theft is a named peril that covers you not only in the car but in virtually every location in the world. This coverage is only valid for items you reported with the insurance company. The insurance company will ask for a list of possessions with approximate value to insure your personal property. This means that you have to list it on your policy if you later want to file a claim for it. Everything you own inside the home qualifies as personal property from a golf bag down to a pair of jeans. Make sure to list every valuable item you possess if you want it to be insured for theft.
The insurance company imposes coverage limits on 3 things: 1) The total claim amount 2) Sub-limits for different categories 3) Limits per item. The total coverage amount can be as high as $100,000 while the sub-limits on different items such as appliances will be $2,000-10,000. The maximum you can claim per item is $1,500 on average unless you have high-value items which you have to report independently. High-value items include gold, cash, weapons, designer fashion, artwork, etc. These will not be covered if they’re stolen unless they’re put under schedule as separate items.
Is All Personal Property Covered?
Not all items are equally covered. High-value personal property is usually left out of personal property coverage. For instance, the car itself is not covered. If the car is stolen you’ll need comprehensive car insurance and a police report detailing the theft to get compensated. You’re only covered if the thief steals items from your car but doesn’t steal the car itself. Moreover, those items will have different coverage limits on them depending on their value.
High-Value Items (Jewelry, Watches, Cash, Weapons, etc.)
If you want to be covered for high-value items, you must get special insurance. This insurance goes under different names such as “scheduled insurance” or “personal floater” and it’s available for items such as jewelry (including wedding rings), firearms, cash, artwork, handicrafts, and other valuables. These items have to be listed on an individual basis and they’ll have separate deductibles.
If you add scheduled items to your homeowners insurance, you can expect the premiums to rise. However, it’s necessary in order to protect your most valuable possessions. The maximum limit on cash recovery is only $200 while a deductible is $500 which means it’s not worth it unless you raise the limit on your cash savings. Consult your insurance agent to find ways to insure your valuable possessions independently.
Sound System Coverage
Aside from high-value items, there are certain items that will be covered by neither homeowners insurance nor comprehensive insurance. These are typically removable upgrades to the car such as a stereo sound system.
If your sound system costs thousands of dollars, you should consider purchasing sound system coverage. This will protect the sound system that was installed in your car post-market (not the sound system that came from the manufacturer). If someone steals your sound system in the car, you’ll be covered.
How To File A Claim For Car Theft
If you want to file a claim for personal property stolen inside a vehicle, follow these instructions:
- Call 911 and have them draft up a police report. The police will send you a copy with a report # that you can send to the insurer as evidence.
- Take photographic evidence. Make sure to record the break-in point and traces of damage such as shattered windows. Make sure not to throw away broken items because they can be used for a forensic investigation.
- File a claim. Call up the insurance company or file the claim online if this is possible.
- Wait for approval. The insurance company will send a claims adjuster and pay you once the damage was investigated.
- Improve vehicle security. After you’re paid out, clean up the mess by installing new safety locks and replace the broken windows in your vehicle. Consider installing an alarm system that will deter criminals.
ACV Vs. Replacement Cost
Homeowners insurance pays out theft claims based on an “actual cash value” (ACV) principle. This means that the value of your items is measured according to the current market value and not the value you originally paid for it. Example: The phone you bought for $1,000 might be worth only $500 after 2 years. The insurance company would only compensate you for $500 because this is how much it’s worth in today’s market.
ACV policies are not intrinsically because some items like gold appreciate over time and you can actually get paid more than you paid originally. The only way to get around an ACV policy is to purchase a “Replacement Cost” endorsement that will insure your personal property for the original market price.
Protection From A Car Break-In
In order to avoid having your property stolen from inside your car and save from filing an insurance claim, there are things you can do to prevent theft.
- Keep your doors locked even when parked at home.
- Always park in safe areas where there is good lighting and access is controlled.
- Keep your personal belongings out of sight. Keep things, e.g. chargers, laptop, anything important, in the trunk when you’re not in the car.
- If you see someone suspicious hanging around your car, report it immediately.
If your car is broken into:
- Dial 911 right away.
- Don’t disturb anything and take pictures of the damages.
- File a police report/claims with home and car carriers if there are any losses.
- Cancel debit/credit cards that might have been taken.
Fortunately, homeowners insurance extends off-premises so you can feel somewhat secure in keeping certain belongings inside your vehicle. There are tight limits within the standard plans, but additional coverage is available for you to purchase should you choose to.
Extra precautions should always be taken on your part in order to keep your possessions safe. Never tempt fate.
In Summary
Homeowners insurance covers theft as one of the named perils in your standard benefits package for contents stolen within your home and structures on your premises but also off-premises including personal belongings left inside your vehicle. This is effective whether your car is parked in the driveway to your home or sitting in a shopping plaza parking lot. It pertains to personal items that you have in the vehicle including your purse, laptop, detachable stereo system, as well as items you may have just purchased from a store. Once you buy it, it becomes your personal property.
If items are stolen that are attached to the vehicle, e.g. a manufacturer’s installed stereo or a car part like the steering wheel, these would fall under the comprehensive auto insurance carrier to reimburse you. The car itself being stolen would also be covered under the comprehensive portion of your car insurance policy.
The off-premises portion of your standard homeowners insurance policy will cover the personal possessions that are stolen from inside of your vehicle. Generally, this coverage is equal to approximately 10% of the limits that you have placed on the coverage of your home policy. If that coverage is equal to $100,000, your off-premises limits would be $1,000. It is possible that you can buy additional coverage, particularly if you have valuable property such as jewelry or any type of big-ticket items that may be kept in the car and you need to have extra insurance lined out in your plan for these.
If whatever has been stolen is valued at less than the cost of what your deductible is for this specific claim, it is worthless to file with the insurance carrier.
If you have an expensive sound system or items installed in your car that are not from the manufacturer that you want to have protected above the limits of your policy, it may be worth discussing with your auto carrier to add extra coverage to your comprehensive auto coverage. These items likely won’t be covered by your off-premises home insurance policy as they’re a fixed part of the car.
