Homeowners insurance covers theft, but specialty items like fine art may require additional coverage

Homeowners insurance covers theft, but specialty items like fine art may require additional coverage

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Homeowners insurance protects your dwelling and personal property, and it offers liability coverage for injuries that happen on your property. If damage or theft occurs due to covered event (known as an insurance peril), homeowners insurance will cover the loss.

If your possessions are stolen, you’re covered under homeowners insurance’s personal property coverage. If your home is burglarized and the home itself is damaged, homeowners insurance will repair the damage under dwelling coverage.

Does homeowners insurance cover theft?

Homeowners insurance covers theft of your personal property, even if it occurs outside of your home. If your personal laptop is stolen while you’re at a coffee shop, homeowners insurance will cover it. If your laptop was stolen from your car, homeowners insurance will cover the theft of the laptop but not theft or damage to your car — you’ll need comprehensive car insurance to protect your car from theft.

Coverage extends to everyone listed on your policy like your spouse and children. If your child lives in a college dorm, homeowners insurance will protect their belongings. However, if your child lives off-campus, then renters insurance will be necessary.

There are limits to standard personal property coverage depending on your homeowners insurance policy and insurance carrier, usually $100,000.

*Available as add-on coverage if not part of policy

**Flood insurance is available through the NFIP and approved insurers

***If you live in hurricane or tornado areas, additional windstorm rider may be required

Does homeowners insurance cover damage to my home from a burglary?

Homeowners insurance covers theft of your possessions, under personal property coverage. If during the break-in, your walls or windows are damaged, then your homeowners insuranc policy’s dwelling coverage will cover you. 

Dwelling coverage is the part of a homeowners insurance policy that covers the cost to repair or rebuild your home if it is damaged. Your dwelling consists of your home and any other structures on the property, like a garage or shed. 

Your dwelling coverage is based on the cost to repair or rebuild your home in the event that it’s damaged due to a covered peril. This is why the dwelling coverage limit is higher than your personal property coverage.

Specialty items may not be included 

Specialty items like high-end electronics, special jewelry, furs, fine art, firearms, specialty bikes, and cash may not be covered by homeowners insurance in the event of theft. According to Steve Wilson, senior underwriting manager at Hippo Insurance, these items may need a “personal article” endorsement or add-on rider.

For specialty jewelry, you can purchase a floater policy as an add-on to your homeowners insurance. Another option is to purchase standalone personal jewelry insurance. Your jewelry and fine art must be appraised before purchasing a floater or stand alone policy.

It’s a good idea to take inventory of your furniture and personal possessions. Some homeowners insurance companies will have inventory lists for you to complete. If you have riders for fine art and specialty jewelry, you will be required to catalog and provide appraisals for them. 

Actual cash value vs. replacement cost

Homeowners insurance policies typically use “replacement cost” when paying out for covered damage. Replacement cost is the cost to replace the item with a new or used product. 

Actual cash value (ACV) takes into consideration depreciation of the item. For example, if a five-year-old leather sofa is damaged by fire, the actual cash value considers the age of the sofa. Actual cash value is usually lower than the replacement cost value. 

Flood insurance policies typically use actual cash value, but you can pay extra to use replacement cost. 

Check with your homeowners insurance to see which is used. Some providers offer “guaranteed replacement cost” as a perk.

For specialty jewelry and fine art, you will be covered for the appraised value minus any deductible.

How to file a claim if your belongings are damaged or stolen

Treat stolen or damaged possessions like a car accident and follow these steps to report and file a claim.

1. Notify the police and file a police report if it is due to theft. Your insurance company may request a copy of the police report.
2. Take pictures of damaged possessions and what caused the damage (fire, storm, etc).
3. Contact your homeowners insurance company. Failure to timely notify your insurance provider can result in denying the claim.
4. If you have a stand alone jewelry policy, contact that insurer.

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