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Does Homeowners Insurance Cover Theft?

A homeowners insurance policy is designed to protect you, your family, your assets, and your home. Theft and break-ins are some of the most terrifying things a homeowner can think about, but there is always a risk. Does your homeowner’s insurance policy provide adequate coverage for theft and break-ins? Will you be able to recover from burglary? Can you afford the cost to repair your home and replace stolen assets? Without coverage, you leave a lot of risk in your life. Here are some homeowners policy terms to understand:

  • Dwelling coverage. If your home is damaged due to a break-in, dwelling coverage will pay for any damages such as a broken window or door. Also, dwelling coverage can provide for repairs of assets damaged. Each insurance provider has different policy limitations, which is why it helps to compare insurance policies annually.

  • Personal property coverage. If your belongings are stolen or damaged, personal property coverage will assist in paying to replace these items. Depending upon the cost of your possessions, the rates can increase or decrease.

  • Structure coverage. Other structures on your property, like a shed, can be damaged during a storm or possibly ruined when someone raids your property. Other structure coverage will pay for damages and prevent you from financial burden.

Homeowners Coverage Limits and Deductibles

When you review your homeowner’s insurance policy, look at the coverage limits and deductible amount. If you need a smaller monthly payment, increasing the deductible can assist. It is important to note that a higher deductible could end up costing you $2K or more even to activate your insurance when you file a claim. The other thing that impacts your coverage and the monthly cost is the homeowners limit, which is the amount your insurance will pay when you file a claim. Compare multiple plans to determine the appropriate coverage limit you need and what you can afford. Take the time to make a list of your assets and their costs to select a plan that meets your needs.

Break-in Damage Costs

Dwelling coverage will pay for break-in damage costs by replacing or repairing what was broken with new or the same-quality materials. Usually, the dwelling coverage costs are well beyond the costs to repair damage due to a break-in.

Replace Stolen Possessions

If someone steals your assets, you will likely want to replace them. Insurance will reimburse you for the cost to repurchase the items at today’s rate. However, there is a small clause to watch for when looking at homeowners insurance. Some companies will provide “actual cash value” for belongings, which means your insurance provider deducts the depreciation and only pays for what you could potentially sell the item for today. The actual cash value can be devastating as depreciation costs can hurt your ability to replace the item.

Limitations on Possessions

When you review your policy, look at the limitations on possessions. Certain types of property will have lower sub-limits and can be capped at a set rate. Usually, insurance will pay for 50 to 70 percent of your personal property.

Other Structure Coverage

Do you have a shed, fence, or detached garage? Other structure’s coverage limits provide a percentage of your dwelling coverage limit. It is important to note that structure coverage will pay for damage to the structure, not the possessions inside. Tools and equipment inside a shed need to be covered under the personal property coverage. A vehicle in the garage needs to be covered with your auto insurance policy to make a damage claim or stolen vehicle claim.

Filing a Burglary Insurance Claim

If you have been dealing with a break-in, what does your insurance company need so you can file a claim? The insurance company will need a copy of the police report or case number to file the claim. You should take a moment to take pictures of the damage so you can provide this list to the insurance provider. We recommend making a home inventory and update this annually to have it ready when and if a burglary occurs.

Contact your insurance provider to obtain a copy of your current homeowner’s insurance policy. It is essential to compare insurance policies often to determine if you need to update or consider changing to a new insurance provider.