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One of the first things a new homeowner does is buy a homeowners insurance policy. However, if a loss is due to theft, they may worry if theft is a covered peril. Here, we tell you about what the typical home insurance policy covers and offer tips for getting the most from your policy.
A typical homeowners policy includes personal property insurance, and that personal property insurance covers loss due to theft. So, if an intruder breaks into your home or detached structure and steals valuables, your insurance policy should cover the personal property loss.
There are limits to how much theft coverage will pay, typically set as a percentage of your dwelling coverage. Most policies provide personal property coverage at 50% to 70% of your dwelling coverage. Let's say your insurer caps personal property coverage at 50%, and your dwelling is insured for $500,000. That means that your personal property is covered up to $250,000.
It's important to note that an insurer may only reimburse you for the depreciated value of the items stolen. If you want a policy that pays to replace your belongings with brand-new comparable items, shop for an insurance company that offers optional full replacement value coverage.
There are circumstances under which theft will not be covered by home insurance policies. Here are some of them:
Yes. While the personal property portion of a policy covers your belongings, any damages to your home due to a break-in are covered by dwelling coverage.
The best way to calculate the replacement cost of your belongings begins before a loss ever occurs. It starts with taking a picture or video of every room, including closets. Once you have that done, sit down and make a list of your belongings. You can group things together to save time. For example, if you have 20 picture frames, you can write "20 picture frames" once rather than write "picture frame" 20 times. Make it a point to include the serial number on any possession you own that carries a serial number.
Go online to learn how much each item is selling for today. Unless you've opted for a policy with full replacement cost, you'll likely get the depreciated value. Still, estimating the full replacement price is a good place to start.
Add up the values of everything on your list, and you have a good idea of their replacement cost. If you're concerned about receiving depreciated value, be sure to ask about optional coverage that pays the full replacement cost.
As mentioned, high-value items typically receive limited coverage. To give you an idea of how much coverage you're likely to have, here are some categories and how much those special limits may be:
If these amounts do not seem sufficient, speak with an insurance agent about buying additional coverage.
In the event a theft occurs, here are the appropriate steps to take:
Notify the police. Your insurance company will likely ask for a copy of the police report or case number.
Make emergency repairs. Let's say your front window is broken. Have the window replaced and save the receipt so you can be reimbursed.
Get your information in order. Take photos of all damage and where items were taken from. If possible, write down the following:
There's no way to make your home 100% theft-proof, but you can make it more difficult for a thief to get away with your belongings.
Hopefully, your home is never burgled, but as a homeowner, it pays to be prepared.
Yes. The personal property portion of your homeowner's policy typically covers personal items even when you're away from home. This includes your car.
Interestingly, car insurance may also kick in. A comprehensive auto insurance policy covers damage caused by a break-in.
Yes, but the amount covered is typically limited to $200 to $300.
Most standard policies do cover personal belongings not located in your home. If your policy does not cover it, it can be added as a rider to an existing policy.
One thing to be aware of is that off-premises coverage normally only covers up to 10% of your on-premises coverage limit. For example, if you have $200,000 in personal property coverage inside your home, you'll have $20,000 for coverage outside.
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