If you live in a state that doesn’t require homeowners insurance, make sure you buy a policy to protect your assets and belongings. In particular, if you live in a place in which unpredictable weather and high crime rates are common, you’ll want to be prepared. Dealing with repairs and replacements of your stolen or destroyed belongings is too expensive to handle on your own; as long as you pay a deductible, your homeowners insurance company should cover the rest.
One issue facing homes all over the country is theft. Though some areas are more prone to crime, no town or city is completely exempted. If a burglar breaks into your home, he or she could potentially steal thousands of dollars worth of technology, cash, art, and other valuables. With homeowners insurance, most of these items will be protected.
What Types of Thefts Are Covered?
In most instances, your homeowners insurance will cover thefts that occur on your property. Whether someone steals your iPad from your living room, your lawnmower from your garage, your bike from your driveway, or your fire pit from your backyard, you should receive coverage on these belongings.
Who Else Is Covered?
In addition, the belongings of everyone else listed on your policy will be covered. If your spouse’s expensive watch or child’s laptop is taken from your property, as long as they’re on the policy, they will be covered. Your child will even have coverage on his or her things if he or she is a college student living in on-campus housing; as long as he or she is still on your homeowners policy, he or she will be covered if a personal belonging gets stolen from his or her dorm room. Once your children move into their own homes that exclude campus housing, they will no longer be covered through your policy.
Actual Cash Value vs. Replacement Cash Value
The primary distinguisher of any homeowners insurance policy regarding personal property involves how your homeowners insurance company will reimburse you for stolen items. An actual cash value (ACV) policy provides you reimbursement for the item for what it’s worth nowadays. A replacement cash value (RCV) policy reimburses you the amount the exact product would cost to replace. For instance, your Macbook Pro computer from 2010 might only be worth about $250 on a modern market. If it got stolen and you have an ACV policy, you’d receive $250, which you could put toward a new laptop. If you have a RCV policy, however, your insurance policy would provide you the reimbursement to buy a new Macbook Pro, which normally starts at a price of $1,300. With an ACV policy, your insurer will take depreciation into account, but with a RCV policy, replacement of the product is the goal.
We’ve already touched upon the loss of possessions associated with thefts and break-ins. What about other damages that can result from a stranger entering your home while you’re asleep or not at home? If the thief creates any damage to the structure of the home itself, you’ll be able to make an insurance claim. A door that has been pried open, windows that have been smashed to allow for entry into the home, broken doorknobs or locks, and even burst or stolen plumbing will be covered by your insurance company.
When Your Homeowners Insurance Doesn’t Cover Theft
You should be able to make an insurance claim on most thefts and break-ins. However, when it comes to the cost of the belongings that are stolen, your insurance company probably has a limit. When it comes to stolen cash, your homeowners insurance company will reimburse you up to a certain dollar amount. For many insurance companies, this limit is $200. If you had $2,000 in cash stolen from your home, you’re not going to be happy. Since you’ll have to pay a deductible, it’s not worth making a claim on stolen cash, as you’ll probably be paying more for your deductible than you’d receive in reimbursement. The reason insurers don’t reimburse you the full cash amount is because it’s difficult to prove the exact cash amount you had stolen from you. Also, your insurer believes that keeping a large amount of cash is irresponsible, as this money should have been put into your account to ensure its safety.
Stolen or damaged jewelry items are another belonging that you might not receive full coverage on. If your $15,000 engagement ring was taken, you’ll most likely only be reimbursed a fraction of this cost. The same goes if you have a priceless piece of art or valuable collection of old coins, for instance. If you have a lot of belongings that would be expensive to replace, you might want to purchase a personal floater add-on to your policy.
One common misconception of theft or vandalism on your property relates to your car. If your car is parked in your driveway, you might think it would be covered; it’s yours and it’s on your property, so that would make sense, right? Unfortunately, when it comes to damage or theft regarding your vehicle, only car insurance will provide coverage. If someone steals your car from your garage, only comprehensive car insurance would provide applicable coverage. If the thief destroys your garage door as he or she breaks into it to steal your car, you’ll receive coverage on the garage door. However, if you have personal property stolen from your car, like a piece of luggage or GPS system, you may be covered for these items under your homeowners insurance.
You can’t predict when any catastrophe will hit your home, whether it’s a fire, natural disaster, or theft. However, you can be prepared for when something does happen. Creating a home inventory sheet and understanding your homeowners insurance policy can make the claims process less stressful. In addition, investing in more anti-theft technology for your ho me will decrease the likelihood of your home being broken into again. Try to keep any expensive belongings inside your home, garage, or a locked-up shed. Add some security to your garage, like a garage door opener that operates with a code. There may be some ways to reduce your chances of experiencing theft or break-ins, but since these aren’t completely foolproof, make sure your homeowners insurance coverage will cover the value of your items.