Does Homeowners Insurance Cover Theft?

Burglaries are more common than you might expect. About 3.7 million household burglaries occur on average each year, according to the U.S. Department of Justice.

The loss from a break-in can cause thousands of dollars in damage, but your homeowners insurance might be able to protect you.

The extent of your coverage depends on the type of insurance policy that you have and your coverage limits. As a general rule, homeowners insurance does provide theft coverage up to your policy limits.

• Coverage for Break-Ins and Theft
• Who is Covered?
• Theft Coverage for Property Outside of a Home
• Types of Theft Not Covered
• Filing an Insurance Claim
• Home Security Insurance Discounts

Coverage for Break-Ins and Theft

Most standard homeowners insurance policies, including renters and condominium policies, include coverage for the personal property inside of your home. As a result, loss due to theft is typically included as part of your personal property protection, according to Nationwide.

If an intruder steals valuables from your home or from structures on your property, such as a shed, a standard homeowners insurance policy should cover it. Many homeowners policies also include theft coverage for personal property that’s not in your home. For example, if you take your laptop with you on a trip, your homeowners’ insurance policy may cover it.

Personal property theft coverage limits are usually set as a percentage of the coverage for your home. This percentage determines how much your insurer can reimburse you for any personal property stolen during a burglary. However, damage to the structure of your home, such as broken windows or doors, would usually be covered under your general homeowners insurance policy instead of your theft coverage.

Who is Covered Under Your Homeowners Insurance Policy?

The legal owner or owners are the only people covered by the insurance policy. However, other insured persons may be covered by some provisions of the insurance policy, depending on the specific policy.

There are three types of coverage in a homeowners insurance policy: protection of the home, coverage for personal property, and liability coverage. The homeowners require all three types of coverage.

Non-owners of a home, such as minor children residing in a home, cannot insure property that they do not own. However, they may be considered “other insureds.” In many policies, minor children and other relatives residing in a home will be covered under the personal property and liability provisions of the policy.

Theft Coverage for Property Outside of the Home

Many homeowners insurance policies provide coverage for theft of personal property located outside of the home. This is a standard inclusion in many policies, but it is subject to coverage terms and limits. Homeowners may choose to add provisions, or “riders,” to their policies to ensure that they can replace damaged or stolen items.

The standard off-premises coverage for theft of personal property is 10 percent of the personal property coverage of a homeowners insurance policy, according to the Insurance Information Institute. For example, if your home was covered for $250,000, and your personal property limit was for 50 percent of your coverage, or $125,000, then your total off-premises theft coverage would be $12,500.

Types of Theft Not Covered

Homeowners insurance covers most items that can be stolen from your home, with a few important exceptions. This includes items of extremely high value, such as cash or jewelry, along with vehicles, which must be covered through a car insurance policy.

For homeowners with expensive jewelry, art, coins, antiques or other prized possessions, a provision for additional coverage for high-value property may be appropriate.

In addition, homeowners insurance does not cover the theft of a car. Although a car is personal property, it is insured separately. One exception is if you had items stolen out of your car. In that situation, you can file a claim for loss under your homeowners insurance policy.

Endorsements for Additional Coverage

If you have personal property that is particularly valuable, you may want to get a provision to add to your personal property coverage under your homeowners insurance coverage. This can include coverage for jewelry, electronics, computers or fine art. When doing this, you may want to schedule these items so that you can replace them at their full value in the event that they are stolen.

In addition, to ensure that you have the best possible theft coverage, you may want to obtain an endorsement for personal property replacement cost. This endorsement will pay the replacement cost for your personal property without depreciation, so you will receive the full value to replace your stolen items.

A specific theft coverage endorsement may also provide additional coverage against theft of your personal assets. Homeowners should check with their insurance companies to determine what theft coverage endorsements are available to them.

Filing an Insurance Claim for Theft

If you have experienced a break-in, you are likely shocked or overwhelmed. However, following certain steps can help to ensure that you maximize your insurance coverage.

First, take an inventory of the property damage or loss suffered as a result of the theft. Once you have done this, contact the police and file a report. This will be important for your insurance claim. Then, call your insurance company and report the claim. Make sure that you make a claim as soon as possible after the break-in, according to Nationwide.

Many insurance companies will provide an inventory sheet to help you make a list of what is damaged or stolen. Be sure to note when and where your item was purchased, how much it cost, and other details about your item, such as its brand and model. Next, take pictures of any damage to your home or personal property.

Once your claims adjuster calls or arrives, work with him or her to review the insurance policy and police report. Throughout the process, cooperate with your insurance company during the investigation.

When your claim is settled, your insurance company will pay you for your lost or damaged property that is covered by your policy, less your deductible. The amount that you receive will depend on your policy options: actual cash value versus replacement value.

If your policy is for actual cash value, the amount you receive will take into consideration the depreciation of your property. If it is for replacement value, the insurance company will pay the amount that you need to replace the item, without factoring in depreciation.

Home Security Insurance Discounts

Homeowners insurance is necessary, but it can be expensive. You can often lower the cost by taking steps to better secure your home and protect against theft. Many insurance companies offer discounts for securing your home. Discounts are offered for reasons such as:

• Using deadbolt locks on your doors ranked “Grade 1” by the American National Standards Institute (ANSI)​
• Installing burglar alarms connected to local police
• Installing motion lights around the outside of your home

While each of these items cost money to install, they may offer substantial savings over time in terms of lowered home insurance costs. Homeowners should contact their insurance agents directly to discuss potential discounts for home security upgrades.

If you have homeowners insurance, you likely have coverage for theft. Be sure to review your policy for exact coverage, and consider increasing your limits if you have any high-value items that may need additional protection.