Theft insurance is a very vital piece of a homeowner’s insurance portfolio. According to the Insurance Information Institute, homeowners insurance claims due to theft total to about $1 billion annually with the average claim paying about $2,500.
Theft insurance is included on the standard homeowners insurance form with specific sublimits for items such as jewelry, art, guns, and tools—to name a few. If a homeowner has especially valuable items, they can be scheduled on a homeowner’s policy separately, or covered on their own specific insurance policy. Every insurance company addresses these limits differently, so make sure to contact a professional insurance broker to discuss your options.
Every insurance company writes their policies differently. A vast majority includes theft in their policy form, but some exclude it. The first thing you need to do as a prudent homeowner is contact your broker to make sure theft is included in your homeowner’s insurance policy.
Many homeowners have expensive jewelry or fine art that can be extremely costly to replace. Homeowner’s policies that cover theft have sub-limits for line items like jewelry and fine art. Valuable items need to be scheduled separately on a homeowner’s policy to make sure they are fully covered in the case of a loss.
There is an additional cost associated with this, but it is worth its weight in gold in the case that one of these items is stolen. If your homeowner’s policy will not provide full protection on these items, contact your broker about obtaining a completely separate policy for your valuable items—this is called an Inland Marine policy.
In order to schedule a valuable item onto your homeowners policy, or obtain a standalone Inland Marine policy, a homeowner needs to remit an up to date appraisal of the specific item(s). Make sure to get these appraisals updated every 2-3 years as these items appreciate/depreciate with the market. The reasoning behind these appraisals is both to ensure that the insured is properly reimbursed if the item goes missing, and to protect the insurance carrier from fraudulent claims.
A central station alarm is monitored 24/7 by the alarm company you purchase it from. If this alarm is tripped, the company instantly calls the house to have a homeowner provide a password in the case that it was an honest mistake by the homeowner. If it was not a mistake and the house is actually being burglarized, the alarm company sends the police in a matter of minutes to check on the house.
This serves multiple purposes for a homeowner: it will deter criminals from choosing to target your home; it will minimize the time criminals have to burglarize your home once they hear the alarm go off; it provides a sizeable discount on your homeowners insurance.
The Off Premises Theft endorsement can be included or excluded from a homeowner’s insurance policy. If you choose to include it, it will provide the same protection for household items if they are stolen from your vehicles or a hotel room. This endorsement is subject to your standard deductible so you need to make an educated decision on whether it is worth the money to include this to your homeowner’s policy. If you carry a $2,500 or $5,000 deductible; it may not be worth paying the extra money to include Off Premises Theft if you do not keep this total value of items in your vehicle or on vacation with you.
A homeowner’s policy may have a $2,500 sublimit for jewelry, $2,500 for guns, $1,500 for fine arts; etc. In the case of a theft, the policy will only afford coverage to these sublimits on certain items—and that’s it. Every carrier has different sublimits, so review the policy with your broker and determine if these sublimits will be enough to indemnify you in the case of a loss.
The world is constantly advancing in terms of technology. While technology makes our lives easier, it also leaves us vulnerable to new forms of theft. Homeowner’s policies now contain a sublimit for identity theft to help mitigate the cost if your private information is compromised. Be sure to ask your broker what is covered by your carrier’s identity theft sublimit, and how much coverage is afforded.
Theft insurance can be quite complicated for a homeowner to decipher on their own. Fortunately, homeowners don’t need to make the decision by themselves. Contact a professional broker to discuss your concerns and make sure all of your belongings are properly protected.
As you can see, there are many facets to theft insurance. A theft claim can leave a homeowner with a large out-of-pocket expense if their coverage is not proper for their specific needs. Please remember to keep in mind that every insurance company addresses these limits differently, so make sure to contact a professional insurance broker to discuss your options. Homeowners work very hard to earn their contents and valuable items; make sure you have the proper protection in place to keep them safe.
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