Does Renters Insurance Cover Theft? (2023)
Theft of your personal belongings can feel devastating, especially when it occurs in your own home. However, your renters insurance provider can alleviate some of the financial burden through personal property coverage.
To help you further understand how renters insurance can protect you and your personal property, we at the Guides Home Team created this guide that explains how and when renters insurance covers theft.
What Coverage Does Renters Insurance Provide for Theft?
Renters insurance includes three main types of coverage: personal property, liability and additional living expenses. If a thief breaks into your home, the personal property aspect of your policy would cover the stolen items.
renters insurance typically includes personal property coverage, it should help you replace belongings that are stolen from your home. The best renters insurance policies will also cover your belongings if they are stolen outside your home, such as from your vehicle or hotel room, or even an offsite storage facility. However, policies will differ in exactly how much they cover.
Replacement Cost vs. Actual Cash Value
Your renters insurance will either cover the full replacement cost of your personal belongings or their current cash value. The declarations page of your policy should spell out which valuation method the insurance company will use. Here’s a breakdown:
Replacement cost value (RCV): If your belongings are covered at RCV, the insurance company will reimburse the current retail price you must pay to replace them. That means the payout will cover the entire cost of the new items and will not account for value depreciation of the stolen belongings.
Actual cash value (ACV): If your belongings are covered at ACV, the insurance company will only reimburse you for the current value of the stolen items, taking depreciation into account. That means the payout will likely be less than you need to replace the items. There is typically minimal cost differential between the premium for ACV versus having RCV coverage in a renters policy.
Deductibles and Limits
Insurance payouts will also vary depending on your deductible and coverage limits:
Deductible: This is the amount you must pay before your insurance kicks in. If your policy has a $250 deductible, the insurance company will pay the ACV or RCV minus that amount.
Coverage limits: This is the maximum amount your insurance will pay out. If your renters insurance has a $5,000 limit for personal property, you will not receive more than that amount regardless of the ACV or RCV of your belongings. In addition to a total limit, your policy may also limit coverage for any given item. These are known as sub-limits. You may need to add endorsements to your policy to cover expensive items such as jewelry, electronics and artwork.
When Does Renters Insurance Cover Theft?
Renters insurance will cover the theft of your personal belongings in most situations, even if they were stolen from somewhere other than your home. Here are a few examples of what your policy might cover:
Belongings stolen or damaged during a home break-in
Belongings stolen from inside your car
Items housed at an offsite storage facility
Items that were in your car when it was stolen (these might also be covered by your car insurance)
Belongings stolen from your hotel room during a trip
Pickpocketed items
A bicycle stolen from a public bike rack
Stolen cash, up to a certain amount
Clothes stolen from a laundromat or shared laundry room
Items stolen by a roommate, if they are criminally charged
Keep in mind that this is not a comprehensive list. Unless specifically excluded by your renters policy, most personal property thefts will be covered up to the policy limits.
When Theft Is Not Covered
Renters insurance does generally come with a few noteworthy exclusions related to theft. Your policy may not cover the following:
Items stolen from a storage unit
Checked luggage
Car theft and other stolen vehicles
More than $200–$250 of stolen cash
Belongings that were in the possession of a third party when stolen
Situations in which your negligence enabled the theft
Items stolen as part of a civil dispute
In some cases, you may need to purchase a specific endorsement or rider to cover your bicycle or ensure full coverage for high-value items, such as jewelry or collectibles. Your renters policy may or may not cover your belongings while moving or when they are in storage.
How Do I Get Reimbursed After a Covered Theft?
You must file a claim with your insurance company to get reimbursed after a covered theft. Follow these steps to file a claim:
Report the crime. In most cases, you can do this by calling the non-emergency number of your local police department. Only call 911 in an emergency. Once you report the crime, keep copies of the police report. You will likely need this documentation later to process your insurance claim. You should also report the theft to your landlord.
Make a list. Determine exactly what was stolen. This step will be easier if you have already created a home inventory, including photos, especially for a home burglary.
Gather documentation. In addition to the police report, you may need receipts or photos documenting stolen items. The insurance company may also need information such as the model number, age and purchase price of an item.
Submit a claim. Most insurance companies have an online claims form. You may also be able to file a claim in person with your local agent, over the phone or through an app.
Respond to requests. The insurance company may follow up by requesting additional documentation. You should fulfill these requests quickly to avoid delaying your reimbursement.
Track your claim. Be proactive about checking on the status of your claim. Many providers allow you to track your claim through the app or website. Alternatively, you can contact the claims department directly.
After the insurance company receives your claim, it will begin its review process. This may involve investigating the claim, assessing the damage and requesting documentation. Once this review is complete, the insurance company will contact you and explain its decision. If your claim is approved, the company will arrange payment.
How To Avoid a Break-In
Although renters insurance can provide financial protection and peace of mind, it’s best if you never need to use it. Fortunately, many break-ins can be avoided with a few simple precautions.
Start by considering investing in a home security system. Many insurance companies offer discounts for protective devices such as smart-home technology and burglar alarms. Check with your landlord before installing any security devices that need to be permanently installed or hardwired.
Whether you are at home or traveling, stay vigilant. Keep your doors, windows and vehicles locked. Be wary of strangers, especially those requesting entrance to your home. If a maintenance worker shows up unexpectedly, verify their credentials by calling your landlord. Get to know your neighbors and their vehicles so you will recognize when someone is out of place.
Finally, evaluate your online presence. Be careful what you post online, and check the privacy settings on your social media accounts. Avoid giving any indication that you are home alone or away from home, and make sure your home address and phone number are not publicly available.
The Bottom Line: Does Renters Insurance Cover Theft?
In most cases, yes. Even the cheapest renters insurance will cover theft. Typically, renters insurance coverage includes not only home burglaries and break-ins but also theft that occurs away from home, such as stolen laundry or items taken from the trunk of your car. However, the exact terms may vary from one policy to another. Check your policy documents for any special limits or exclusions that might apply.
Original Article: https://www.marketwatch.com/guides/insurance-services/does-renters-insurance-cover-theft/
Veronika Jelenik has had her work published in the New York Daily News and the Hartford Courant, and she has covered many disparate topics. Veronika has a bachelor’s degree in journalism and social and cultural analysis. When not immersed in home services content, Veronika enjoys spending time with her friends and her Chihuahua, Beanie.
Rebekah Young is an editor with a decade of experience in educational content and editing. Before joining the Guides Home Team to focus on home services content, she guided content strategy and edited in the insurance, venture capital, financial and health care fields. Rebekah has a bachelor’s degree in communication and English.
Mark Friedlander is Director, Corporate Communications, at the Insurance Information Institute (Triple-I), a New York-based nonprofit research and education organization focused on providing consumers with a better understanding of insurance. Mark serves as a national spokesperson for the Triple-I, handling a wide array of insurance industry media issues. His responsibilities also include spearheading the association’s hurricane season communications strategy and its member company support and media outreach in Florida, where he is based.
