The personal property section of a homeowners policy will pay, subject to limits, for the repair or replacement of personal items if they are lost or damaged. Most common claims are for damage caused by an external event, such as a fire. However, loss due to theft is usually covered.
You will also be covered for packages stolen from your porch or placed inside your home. These items may not be costly, but your insurer will not pay you if the package’s value is greater than your deductible. The standard deductible for homeowners insurance is $500 to $1,000.
It was estimated that 1.7 millions packages were lost or stolen every day in 2020. There are many ways to decrease the chance of you being a victim of theft. It is important to have the right coverage to protect your finances, even though theft risk can affect the cost your homeowners insurance policy.
What happens if theft is not covered?
Although most homeowners insurance policies protect against theft, there are some factors that could limit the amount of recoveries. While personal property limits and the deductibles will determine coverage, there may be issues with valuations for very valuable items. Your home insurance company may not pay the full cost of replacing a stolen item.
It is also important to be familiar with the reporting requirements for a policy. Most homeowner policies require homeowners to report thefts or other losses within a specified time period from the date of loss. This could lead to the denial or cancellation of your entire claim.
There are no limits to theft
Although homeowner policies are different, many provide protection for stolen, damaged, or lost precious items like jewelry, furs and firearms. There are standard limits that apply to certain items, so be careful. Take, for example:
- Jewelry – It is not unusual to see a limit for $1,500 on jewelry. This would in many cases not be enough to cover a complete loss.
- Items that have sentimental value – These items include wedding rings, fine silverware, and other items that are more personal than the cost. They will not be fully covered.
- Collectors: Without an addition to the standard homeowner insurance, baseball cards, coins, and stamps are not usually fully covered.
Theft of cash and jewelry
Insurers are concerned about jewelry and cash because it can be easy to file a claim without supporting documentation. It is hard to determine how much cash someone has and there are many people who have large amounts of jewelry that could be very valuable. These items are not eligible for recovery. The policy usually limits the amount that can be claimed. In some cases, cash can be as low at $200.
An agent may be able to help you understand the policy’s coverage in case these items are stolen. It is possible to ask for an increase in your limit on both high-value items. You can also prepare a schedule and discuss the possibility of a specific endorsement.
Who is covered by your homeowners insurance policy against theft?
Most cases will cover you and your family in the event that items are stolen or packages are stolen from your front door. However, not all losses are worth filing a claim.
A homeowners policy may also cover stolen property from guests who have been invited to your house. While most policies cover your injuries and losses while you are away from home, there are some limitations that you should discuss with your insurance company.
There are other ways you can protect yourself against theft
You can take common sense measures to protect your home such as locking windows and doors, and use automated lighting when you are away. There are also many ways to customize your home insurance policy to provide financial protection in the event that your home is stolen. It may be necessary for valuable items to be scheduled and a policy strategy developed to protect them. Pay attention to your policy’s limits. They can be increased if they are insufficient.
Increase coverage limits
Most homeowners policies do not provide coverage for high-value items or unique items. A standard policy will typically include a contents coverage limit that is based on a percentage of the value of the home. In the event of significant loss, this policy will likely not meet your needs. A homeowner can increase the personal property limit for a modest premium increase. This will not affect the policy premium or the coverage amount of the home.
Plan high-value items
It is a good idea to take pictures of high-value items and compile an inventory. An appraisal is required for highly valuable items. This schedule should include as much detail as possible and as much documentation as possible to support the actual replacement cost. You can also add a Scheduled Personal Property Endorsement (at an additional cost) to your policy. This specifies the amount of recovery for the case of theft, loss, or damage to the high-value item.
Home security systems should be installed
There are many security products on the market to deter thieves and prevent theft. The best way to prevent theft from happening is to make it more difficult. Installing:
- Automated flood lights — These devices can be strategically placed in a yard and are activated by movement. They offer a great deterrent.
- Door cameras — These cameras are becoming increasingly popular and can capture the identity of a package thief. They also alert the homeowner, who can either verbally warn or call the police.
- Security system — These are connected directly to the security company or local police department, and can initiate a response if a break-in is detected.
