Does home insurance cover theft and break-ins?

Does homeowners insurance cover theft or burglary?

Homeowner’s insurance coverage can vary depending on the policy you have.

For instance, a smashed window or broken door will be covered under your dwelling structure, which is part of a standard homeowner’s policy, but some valuables may not be.

In most cases, homeowner’s insurance will cover theft of items within your home, up to a maximum limit as detailed in your policy. If you own an item of significant value like a piece of jewellery, an original piece of art or even expensive wines, then you should let your insurer know. Depending on the value of these items, you may have to buy additional contents insurance for these specialty items.

If a so-called “porch pirate” steals a package from your porch, contact the seller to see what options are available. You might also be able to use your credit card for reimbursement or even pursue the shipping company that failed to get your signature on delivery.

There are many options to either get a new product or your money back, including contacting your home insurance provider. Make sure you contact them early, ideally within 24 hours, if you’re looking to make a claim. But, the claim is only worth it if it’s more than your deductible (the amount you pay before your insurer covers the rest).

How break-in insurance works

Generally, your home insurance policy will cover your dwelling, any detached structures (e.g. garage, shed) and your contents (i.e valuables).

Any damage to your home is covered up to the replacement value (not the market value) of your house. The insurer determines what the value of your house is and provides a policy to cover the cost of replacing it. A broken window or door is certainly within your coverage and typically at around $3,000-$4,000 to replace, it’s worth the $500-$1,000 deductible.

Detached structures are considered a fraction of the total value of the home, typically 10 per cent. For example, a $500,000 house will cover a $50,000 garage. Contents such as laptops, furniture and appliances are covered, but keep these two things in mind.

• Do you have an actual cash value (ACV) or replacement cost policy?
• Did you buy increased coverage for specialty items?

Actual cash value (ACV) vs. replacement cost

If an item is stolen from your home your insurer will determine the actual cash value.

ACV includes depreciation so you get back what you paid, less depreciation. For example, a five-year-old $2,000 laptop would not have the same value today as when you bought it. With an ACV policy, depending on how your insurer calculates depreciation, you might only get $1,000 towards your new laptop.

If you want to make sure you can replace that item if it was stolen you need replacement insurance, it’s more expensive, but it means the item will be replaced anew.

According to the Information Insurance Institute, most insurers offer you 50-70 per cent of the value of your contents with an ACV policy.

How to increase your theft coverage with endorsements

Insurance is not one size fits all. You may have items in your home that need insuring. For example, if you have a significant amount of valuable antiques, rare art, or jewellery you’ll need extra coverage.

Jewellery

Most policies cover up to $2,000 per category, so, if you own expensive jewellery that is worth more than the limit, call your insurance broker to increase your jewellery insurance coverage. You’ll need evidence of their value by way of receipts and photos.

Identity theft

You may also want to insure the cost of protecting your identity if personal documents are stolen during a home robbery. Identity theft can be expensive, especially if you need time off work to attend all the necessary appointments. Conversely, identity theft insurance is much more affordable than the alternative.

Lock replacement

Replacing a lock can be costly and a typical policy may only give you $1,000 to replace a lock. If you have several doors in your home the cost to have the locks changed can be high. The loss must be reported to the authorities and your insurer will determine whether or not to approve the lock replacement claim.

Credit & debit cards

You can also insure your credit card. Although most credit card companies are able to quickly lock your account and recognize charges that aren’t yours, you may still want credit card insurance to offset the financial loss incurred due to theft and/or other losses directly attributable to forgery or counterfeit activities. The coverage amount can be up to $200 per transaction and $2,000 annually.

Is stolen cash covered by insurance?

It’s covered but to a limit, usually a few hundred dollars. Be safe and keep a minimum amount of cash in your home, deposit the rest in a bank where it is protected by CDIC insurance up to $100,000.

If you insist on keeping cash in your home buy a safe to protect it further from theft during a break-in. Make sure the safe is fixed to the floor or wall, as thieves can simply carry the safe out of your home to break later if it’s not secured somewhere.

What to do if your house is broken into?

It can be hard to focus after learning you have been violated by a burglar but it’s important to move quickly to contact the authorities if you realize you have been robbed. Talk to your neighbours in case they saw something suspicious, spread the word if you are comfortable on social media especially neighbourhood groups on Facebook. Someone may have valuable information like camera footage.

NOTE: Be wary of what you post on social media. Wannabe thieves can track your location and see when you’re away. It won’t invalidate your claim, but do your best to keep that information private.

How to file a home insurance theft claim

After you call the authorities, call your home insurance company. You can detail what happened as soon as you are learning about it rather than waiting days and finding it harder to recall the situation.

Start making a list of items missing, items broken and just anything unusual and noteworthy. Your insurance company may have preferred contractors they work with to get your home fixed or they may give a dollar amount that you can spend to get the repairs done. Save all the receipts for any work done after the break-in to show the provider your total cost. It’s not just the contents that you lost but also the damage to property and possibly lost time away from work.

Ideally, you have all of your stuff tracked in an app, so you’re not scrambling to think about what’s missing.

Insurance can be daunting as no one wants to think of things going wrong, but as Canadians continue to be victims of all types of theft, it’s important to make sure your contents, your home and your livelihood are insured.

How to claim damage caused by the break-in

Outside of the cost to replace the stolen items, homeowners who are the victim of theft may also face significant expenses associated with damage done to their property such as damaged windows, a broken door, and interior damage to the walls and floors.

Most insurance policies will cover the cost of damage that occurred during the robbery. Make sure you take pictures of the damage and make notes that you think might be relevant to share with the insurance investigator later.

The bottom line

Protect yourself with security alarms, a third-party supplier can actually earn you a 5% discount on your home insurance. Work with your insurer to get your valuables properly insured with an itemized list and a cost breakdown (ideally with receipts). Consider some smart home improvements to increase security.

ALSO READ

• Can a smart home reduce your insurance rates?
• Do I need identity theft insurance?
• What you need to know about jewellery insurance
• Replacement cost vs. actual cash value