Does homeowners insurance cover theft?

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Nobody expects to be the victim of theft or vandalism, but it can happen to anyone, no matter where you live. If you come home to find your property stolen or destroyed, your first phone call should be to the police. Your second call? It should be to your insurance agent, who can then start the process of paying you on your claim.

Does home insurance cover theft?

If you have an HO-3 policy — the most common type of homeowners insurance — you have theft insurance. It’s one of the named perils that is standard coverage with this type of policy. Your coverage comes from three of the elements that make up a standard policy.

Dwelling coverage

Dwelling coverage, also known as Coverage A, is the portion of your policy that pays for damage to your home itself from theft or vandalism. Someone breaking into your home may damage windows or doors in the process. Your dwelling coverage will pay for those repairs after your deductible is applied.

However, there may be limits to this coverage, and it is worth a call to your agent to find out if you are adequately covered. If your door locks, for example, are custom made or antique, you might benefit from increasing your amount of coverage if possible so that you could replace them with something similar in quality.

Other structures coverage

If the damage or theft occurred in a detached structure on your property, other structures coverage should pay for it. So if someone broke into your garage, the damage to your garage from the break-in would likely be covered. However, other structures coverage usually maxes out at 10% of your home’s insurance value on a standard homeowners policy. So if you’re worried about your garage, shed or fence not being fully repaired as a result of a break-in, you should talk to your insurance agent about potentially increasing your coverage. It’s important to remember that if your car is stolen from your garage, your homeowners insurance doesn’t cover it: that would be a job for your auto insurance.

Personal property coverage

This may be the most important part of your policy if items are stolen from you because it covers your personal belongings. From clothing to electronics, your insurance will pay all or a part of the costs of replacing your property, up to your policy’s limits and taking your deductible into account.

As we noted above, scheduling your personal property can be beneficial if you own expensive electronics, cameras, furs, jewelry or other items. If your hobby involves collecting items such as stamps or coins, or if you have high-value musical equipment, it’s worth talking to your insurance agent about scheduling those items.

You’ll probably need to have an appraisal of their value to schedule them, but you’ll be able to insure them for the full value if they are stolen or damaged by covered events. One benefit is that scheduling may expand the range of events you are covered for and often includes replacement if you’ve lost them. Another benefit: there is usually no deductible.

Actual cash value vs. replacement cost insurance

Your insurance should cover you in the event of a theft, but how much it covers your belongings is determined partly by whether you have an actual cash value or a replacement cost policy.

What’s the difference? Actual cash value insurance takes depreciation into account. For example, if your two-year-old laptop computer is stolen from your home, with actual cash value insurance you might only receive a few hundred dollars, since computers depreciate quickly. That’s not enough to replace your property.

Replacement cost insurance, however, would pay you what was needed to purchase a new laptop of approximately the same quality as the old one. So your payout might be $1,000 or more, depending on what it would cost you to purchase a new one.

Replacement cost insurance, as you might imagine, is more expensive than actual cash value, but it can leave you in far better shape after a home invasion.

How to prevent theft from your home

Most people will agree that it is better not to have to deal with a theft than to have to deal with the aftermath of one. With that in mind, here are some suggestions on how you can burglar-proof your home and give yourself the peace of mind that comes with knowing your family and your belongings are safe.

  • Install deadbolt locks on all doors and reinforce your window locks.
  • Install security devices, such as motion-sensor lights or a burglar alarm.
  • Ask your local police if they will do a security audit of your home — then tackle as many of their suggestions as you can afford.
  • Keep bushes in front of windows clipped back so no one can hide behind them while they are jimmying the locks.
  • Keep valuables such as important documents, money or expensive collections out of sight and, if possible, in a locked safe.
  • Don’t leave ladders or tools visible outside.
  • Don’t talk about your vacation plans in a public place; while gone, ask the police and neighbors to keep an eye on your property.
  • Make sure your garage or shed doors and windows have locks.
  • If you have a pet door, make sure it’s locked when not in use.

Frequently asked questions

What insurance company offers the best homeowners insurance?

There’s no one “best” company for everyone. A good place to start your search for the best policy for your own circumstances is our listing of the Best Homeowners Insurance Companies of 2020. We’ve chosen the companies that offer great rates, comprehensive policies and superior customer service.

If I’m the victim of a theft that happens while I’m on vacation, am I covered?

If you are on vacation and something is stolen from your luggage, for example, you should be covered. You should also be covered if your car was broken into and items were stolen from it, as well as if something is taken from your hotel room.

How can I protect myself from identity theft?

This rapidly-growing type of crime is something that insurers are increasingly addressing by offering riders, or amendments, to homeowner policies to cover the costs of repairing your credit and recovering from identity theft. Ask your agent about adding this coverage to your basic policy so that you’ll be covered if someone steals your identity.