If you rent your home or apartment, having a renters insurance policy offers valuable peace of mind. You may be asking yourself, what does renters insurance cover? This type of policy protects your personal belongings, your liabilities as a renter and loss of use if your home becomes uninhabitable. You might also be wondering does renters insurance cover theft? Keep reading to find out if renters insurance protects stolen belongings and how to file a renters insurance theft claim.
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Does renters insurance cover theft?
Yes, renters insurance does cover theft in most situations. If a burglar breaks into your home and steals your personal belongings, your renters insurance policy will reimburse you for the value of the stolen items.
All standard renters insurance policies have personal property insurance, which includes coverage for theft. However, some items might be subject to certain coverage limits if they are stolen. For example, computers and electronics usually have coverage limits of around $2,000.
Suppose you had $5,000 of electronics stolen from your home; your renters insurance policy would only give you $2,000 to replace the items. Some insurance companies give you the option to raise your coverage limits for high-value items like computers and fine jewelry.
When doesn’t renters insurance cover theft?
Renters insurance will not cover personal property theft in every circumstance. For instance, most policies exclude theft coverage when your home is under construction. You may also not be able to file a theft claim if you are renting your room or home to another person through a sublease.
Also, keep in mind that renters insurance companies will only pay a theft claim if you can prove that someone forcefully broke into your home. If you accidentally left the front door or window open and a thief broke in, it’s going to be much harder to get the claim approved.
What to know when filing a renters insurance theft claim?
Filing a renters insurance theft claim is a multi-step process. If someone breaks into your home and steals personal items, here are the steps you should take to file a claim with your renters insurance company:
- Call the police: After someone breaks into your home, call the police right away. A responding officer will fill out a police report, which includes details about when the theft occurred and what was stolen. Filing a police report can help improve your chances of getting an approved claim.
- Contact your insurance company: Next, contact your insurance company and notify them of the break-in. They’ll ask for an explanation of what happened and what was taken. They will also explain the theft claim process and provide the required paperwork.
- Provide evidence and your home inventory: Gather evidence of the break-in, like pictures of forced entry and get a copy of the police report. In addition to claim paperwork, you should provide a copy of your home inventory and a description of the items that were stolen.
- Wait for approval: The last step is to wait for approval. A claims representative will keep you updated on the status of your claim and will notify you when the claim has been approved.
In the case of theft, how do renters insurance companies reimburse?
When you file a theft claim, your insurance company will reimburse you for the loss in one of two ways — actual cash value (ACV) or replacement cost value (RCV). Most renters insurance policies include ACV reimbursement by default, but you can usually upgrade to RCV for a larger payout.
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With ACV, your insurance company will reimburse you for the stolen items with depreciation factored in. For example, say someone stole your stereo system that was purchased five years ago for $1,000. If you have an ACV policy, you might get $600 to replace the stereo because the equipment has lost value in those five years.
With an RCV policy, you get reimbursed for stolen items at their original value, without accounting for depreciation. If someone stole your $1,000 stereo system, you would get $1,000 to replace it with an RCV policy. It doesn’t matter if the stereo system was two years old or 10 years old — you would still get $1,000 if it was damaged, destroyed or stolen.
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Personal property coverage under a renters insurance policy usually requires a deductible. A deductible is the amount of money you are required to pay out-of-pocket towards a covered loss because insurance money will kick in. You can typically choose your deductible when you sign a policy, but it’s usually somewhere between $500 and $2,000. When you file a claim, you pay the deductible and the insurance company compensates you for the rest.
Why is a home inventory important when applying for renters insurance?
A home inventory is essentially a catalog of all your personal items. Each item should have a written description, including the date of purchase, a photo, the estimated original cost and the original receipt, if available. When you file a claim, a home inventory helps your insurance company come up with a fair payout.
If you have an RCV policy and you have the original receipt for a stolen item, the insurance company knows exactly how much money you should get. With an ACV policy, the insurance company can more accurately estimate your payout based on the date of purchase and original price of an item.
If you don’t already have a home inventory, here’s how you can make one:
- Working room by room, take a picture of every item you own.
- Write a description of each item, when it was purchased and the price you paid.
- Include receipts, appraisals and other documents for high-value items.
- Keep a hard copy and digital file of your home inventory for easy access.
- Update your home inventory when you buy new items or discard old belongings.
How to make my insurance cheaper?
Renters insurance is typically very inexpensive, which is one of the reasons why it’s worth getting. According to the Insurance Information Institute (III), the average cost of a renters insurance premium in the United States is $180 a year. However, there are ways to lower your renters insurance premium if you’re on a budget.
One of the best ways to make your renters insurance cheaper is to install a security system to reduce the risk of theft. Additionally, equipping your home or apartment with fire alarms, fire extinguishers and carbon monoxide detectors can qualify you for additional discounts.
Most renters insurance companies also offer discounts to renters who are claims-free, pay their annual premium in full, sign up for automatic payments and increase their deductible.
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Too long, didn’t read?
Renters insurance covers theft in most situations. If your items are stolen, the insurance company will reimburse you based on the item’s original cost, minus your deductible. You’ll get a higher payout with a replacement cost value policy because actual cash value policies account for depreciation. However, keep in mind that high-value items, like electronics, are usually subject to specific coverage limits. If you keep expensive items in your home, consider buying an endorsement that can raise your policy limits.
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