Does Home Insurance Cover Burglary and Theft?

Homeowners insurance commonly provides coverage for losses stemming from theft and burglary. This protection extends to both damage inflicted upon the home’s structure during a break-in and the theft of personal possessions.

Standard Burglary Coverage

A typical homeowner’s insurance policy, such as an HO-3 or HO-5 form, generally provides comprehensive coverage for burglary incidents. These policies distinguish between damage to the physical structure of the home and the loss of personal belongings. Dwelling coverage helps pay for repairs if the home’s structure, like walls, windows, or doors, sustains damage due to forced entry during a burglary.

Beyond structural damage, personal property coverage within these policies addresses the theft of belongings from inside the home. This coverage usually extends to a wide array of items, including furniture, electronics, clothing, and appliances. Furthermore, personal property coverage often extends beyond the confines of the home, offering protection for items stolen from other locations, such as a vehicle or a hotel room, within policy terms.

Understanding Coverage Limits and Exclusions

While homeowners insurance generally covers personal property, it often includes specific sub-limits for certain high-value items. Categories such as jewelry, furs, cash, firearms, silverware, and collectibles typically have lower maximum payout amounts than the general personal property limit. For instance, a policy might cover up to $100,000 in total personal property but only $1,500 for jewelry. These limits exist due to the higher risk and potential difficulty in accurately valuing such items.

To secure full coverage for items exceeding these standard sub-limits, homeowners can utilize “scheduled personal property” coverage, also known as an endorsement or floater. This involves listing specific high-value items individually on the policy, often requiring an appraisal to determine their precise value. Scheduling provides higher limits and can offer broader coverage, sometimes even for accidental loss, without a deductible.

However, not all theft scenarios are covered by a standard policy. Common exclusions include theft from a vehicle if there is no evidence of forced entry into the vehicle itself. Additionally, theft from a property that has been vacant for an extended period, typically 30 to 60 days, may be excluded. Policies also generally exclude theft committed by a tenant or someone residing in the household.

Valuation and Deductibles

When personal property is stolen, insurance policies determine the payout based on specific valuation methods. One common method is Actual Cash Value (ACV), which pays the replacement cost of an item minus depreciation. This means the payout reflects the item’s worth at the time of the theft, accounting for its age and wear and tear. For example, a television bought several years ago would be reimbursed at its current depreciated value, not its original purchase price.

Alternatively, Replacement Cost Value (RCV) coverage pays the cost to replace the stolen item with a new one of similar kind and quality, without any deduction for depreciation. This typically results in a higher payout, enabling the policyholder to purchase a new replacement. Many policies initially pay ACV, then reimburse the additional amount up to RCV once the item is replaced and receipts are submitted. Homeowners should review their policy to understand which valuation method applies, as this impacts potential reimbursement.

A deductible is the amount the policyholder pays out-of-pocket before the insurance company begins to pay on a claim. For burglary claims, if the total loss is $5,000 and the deductible is $1,000, the insurer would pay $4,000. Deductibles are generally applied per claim, meaning a new deductible would apply if a separate incident occurred. If the value of the stolen items is less than the deductible, filing a claim may not result in any payout from the insurer.

Steps for Filing a Burglary Claim

Upon discovering a burglary, ensuring personal safety is the immediate priority, and the scene should remain undisturbed as much as possible. Law enforcement should be contacted immediately to report the crime. A police report is almost always a requirement for insurance companies to process a theft claim, serving as an official record of the incident.

Next, a detailed inventory of all stolen items should be created. This list should include descriptions, serial numbers if available, approximate age, and original cost of each item. Gathering proof of ownership, such as receipts, photographs, credit card statements, or appraisal documents, is also important to substantiate the claim. Any damage to the home caused by the forced entry during the burglary should be documented with photos or videos.

The insurance company should be contacted as soon as possible after reporting the incident to the police. During this initial contact, the insurer will typically request the police report number and details about the incident. Cooperation with the insurance adjuster, who will investigate the claim, is essential. Providing all requested documentation and accurately answering questions helps facilitate the claims process.

Finally, policyholders may need to complete a formal “Proof of Loss” form. Once the claim for dwelling damage is approved, arrangements can be made for necessary repairs to the home.