Before you buy homeowners insurance for the house you are purchasing, ask questions. A common one is: Does homeowners insurance cover theft? The answer: Typically, homeowners insurance covers property theft and damage after someone breaks in and steals your personal property.
But, as is true of many insurance policies, there are nuances to consider.
Types of Coverage
The most common kind of basic policy – an HO-3 policy – includes coverage for theft, which is considered a named peril. The coverages within a policy that can help you recover from burglary include dwelling coverage, personal property coverage and other structures coverage.
Dwelling coverage helps you pay for repairs to your home damaged by a covered peril. Typical examples of damage that can be the result of a burglary include broken windows and damaged doors resulting from the break-in.
Other Structures Coverage
When detached structures on your property, such as a garage or storage building, are damaged by a covered peril, this coverage can help pay for repairs.
Personal Property Coverage
Personal property coverage can help pay for repairing or replacing belongings damaged during a burglary.
Which is Better: Actual Cash Value or Replacement Cost?
After a theft, how much you get in coverage depends on whether you have an actual cash value or a replacement cost policy.
Actual Cash Value
Actual cash value policies cover personal property by helping reimburse you for how much a piece is worth when taking depreciation into account. With this kind of coverage, you run the risk of receiving far less than it would cost to buy a brand-new version of the item to replace it.
If your policy is replacement cost insurance, the payout would be a sum that lets you replace a stolen or damaged-beyond-repair item with a brand-new piece of comparable quality. Depreciation is not considered.
To Schedule or Not to Schedule?
If you have expensive items, your policy will likely not cover them unless you purchase an additional policy, schedule personal property insurance.
Scheduled Personal Property
Scheduled personal property insurance goes beyond a standard homeowners policy, itemizing expensive items like jewelry, antiques, fine art and collectibles.
Unscheduled Personal Property
As the name infers, unscheduled personal property is usually property of lower value such as clothing, inexpensive jewelry and electronics. Individual appraisals are not required.
Filing a Claim After a Burglary
If your home is damaged or your personal belongings stolen in a burglary, there are some steps you need to make in order to file a claim with your insurance provider.
- Report the burglary to the police.
- Make a copy of the resulting police report and provide it to your insurer when you file a claim.
- Make a list of items stolen and gather receipts.
- If you haven’t already, create an inventory list and take photos or videos of any property damage from the break-in.
- Make emergency repairs where necessary to protect the home from further damage and save the receipts. Your insurer should reimburse you for these expenses.
Then it is time to file your claim. Your insurance company will explain in greater detail how the company completes the process.