Losing valuable belongings is devastating. And more so if they are uninsured. The thought of purchasing a new item again is not only stressful but also negatively digs into your finances. Why insure your personal property? Insuring personal property assures you of protection against theft or damage. If you are a victim of theft, your insurer will replace the stolen property. However, among the most common questions when it comes to personal property insurance is whether the items will be covered whether the theft occurred in the home or outside the property. 

Let’s first see when home insurance provides coverage for theft 

Theft can occur in any location. You can be pickpocketed when walking down your favourite street, go on holiday and lose your valuable property or even through home breakages. Home insurance policies insure personal properties whether they are stolen inside or away from home. 

Home insurance coverage offers protection against: 

• Personal liability- If a visitor is injured while on your property, your home insurance should provide coverage for the treatment costs involved. 

• Dwelling- This provides coverage against damage caused to your home by hurricanes, fire and other disasters. 

• Additional expenses- In instances where your home needs major repairs, it can be inhabitable, necessitating your family to seek accommodation elsewhere. Your home insurance should cater to these expenses. 

• Personal belongings- Personal property is covered under a home insurance policy. As such, theft or damage should be compensated by your insurer. 

How is stolen property compensated by your insurer?

This is the most essential thing to consider when insuring your property. Based on the compensation method you choose, you can either get compensated a fair property value or one that is not enough to replace the stolen property. Among the compensation options that most insurers provide include:

• Actual cash value- With the actual cash value, your insurer will compensate for the current value of the stolen item. For instance, if your stolen phone is worth $70, you will be compensated the said amount regardless of the price at the time of the purchase. In this case, $70 is the actual value of the phone. 

• Replacement Cost Value- This is the cost required to replace the stolen item based on the current market rates. 

What about break-ins?

Losses incurred from break-ins are covered by your home insurance. 

These losses can be possessions such as TVs and laptops. Theft insurance also provides coverage for damage to physical structures in a home. For example, if the windows are damaged in a burglary attempt, you will be compensated. Also, if your water system is damaged due to theft of copper as well as other essentials tools, you can claim for the repair. If your child’s campus room is broken into and a personal belonging stolen, you are entitled to compensation. 

Who is protected under the home insurance theft policy?

Your home insurers protect persons listed under your policy. These include all dependants such as your child or spouse. The insurance policy also extends to people living away from home. For instance, if a laptop is stolen when in the care of your child in school, you should be compensated. However, if the child moves from campus residences to their own house, they will not be covered under your homeowner’s insurance. 

Are there any types of theft that are not covered under home insurance?

While your home insurance provides coverage for personal property, there are exceptions. 

• Jewellery and cash  

Jewellery is expensive to purchase and insure. As such, insurers have a cap on how much can be covered. However, if you want additional coverage for your jewellery, a personal floater policy is the best decision. This will help you recoup high-value jewellery. You also get the option to add it to your home owner’s policy. 

For cash, the majority of homeowner’s insurance policies provide coverage for up to $200. For instance, if cash worth $700 is stolen from your purse, the maximum amount you can be compensated is $200. If the deductible amount applies, cash compensation can be expensive. 

• Car theft

Homeowners’ insurance does not provide coverage for theft cases involving cars. To ensure you are protected against car theft, ensure you have comprehensive car insurance. However, if personal belongings are stolen inside your car, you will be compensated under the homeowners’ theft policy. 

What information does your insurer need to set up your premiums?

If you have high net belongings, your premiums cannot equal that of a person with low-worth belongings. This is because your belongings will be expensive to insure in case of theft. To help your insurer determine your insurance value, you need to have an up-to-date inventory in your home. Ensure you include:

• All major electronics and appliances ensuring you take note of serial numbers as well as original receipts

• All clothing in the home

• All belongings that are stored in off-site locations

 How can you ensure you remain protected from theft outside your home? 

• Avoid making too many claims

Making too many theft claims whether they occurred inside or outside your home is suspicious. This only makes you seem riskier to insure, and can even raise the cost of your premiums. While insurance is, indeed, important, insurance companies expect homeowners to make claims rarely. Making four claims per year makes you an unacceptable risk. And since other insurance companies get info on policy cancellations with other insurers, it might be difficult for you to get coverage in the future. 

• Make claims that significantly exceed your deductible

If your deductible is $400, it would be pointless to claim on a laptop theft valued at $500. While you will be compensated the $100, it paints a bad picture to your insurance records, given the low compensation amount. Also, if your deductible is higher than your claim amount, making the claim only gives your insurer info of the occurrence of the event. This can be used to determine the cost of your premiums in the future. 

• Make honest claims

If the theft or damage of an item was a result of a fault on your side, making a claim only ruins your insurability. For instance, if your insurer requires you to have adequate security systems around your home, a security breach that occurs due to carelessness on your part may not be compensated. 

• Do not file a claim for exclusions

Understanding what coverage is provided is paramount when undertaking an insurance policy. Before filing a claim, ensure the peril is covered. For instance, you cannot claim the theft of personal belongings that occurred at your child’s home. Read also about the vehicle theft trend in Canada here.