How Does Renters Insurance Coverage for Theft Work?

Being the victim of a theft can feel devastating, especially if it happens at home. In these situations, a renters insurance policy can help pay for the costs of items stolen from your home or car, and even when you’re away from home. Policies usually come with limits and exclusions, so it’s important to know how it works when you buy a policy. Here’s what to know.

Renters insurance policies include personal property coverage, which pays to repair or replace your belongings if they’re damaged, destroyed, or stolen. Policies differ in how much they’ll cover. It depends on a few factors, including:

Replacement Cost vs. Actual Cost Value

If you’re the victim of a covered theft, your renters insurance company will either cover the full replacement cost of your stolen items or their current cash value. Check the declarations page of your policy to find out which valuation method the insurance company will use.

Actual cash value (ACV) coverage pays what your item is currently worth, so your payout may not cover the cost of buying a new item. For example, a laptop you purchased for $1,500 two years ago may only have an ACV of $900 now because of depreciation. When you buy a new laptop, you’ll need to cover the difference or buy a cheaper computer.

Replacement cost value (RCV) coverage reimburses the current retail price of your stolen item without factoring in depreciation. So while adding RCV to your policy may increase your premium, you’ll typically receive a larger payout after a covered loss.

Deductibles and Limits

Renters insurance payouts can also vary depending on your deductible and coverage limits:

• Deductible: The amount you’ll pay out of pocket before your insurance company will pay the claim. The most common deductible is $500, according to a SafeHome.org report, but you may be able to choose a higher or lower one depending on your needs.
• Coverage limit: The maximum amount your insurance company will pay out for a claim each year. Each component of your renters insurance policy may have a different limit. For instance, your personal property coverage may pay up to $50,000 annually toward covered claims. The insurer may also impose coverage limits on certain items like bicycles.

When Does Renters Insurance Cover Theft?

Renters insurance covers theft in many situations. Your policy’s coverage might include items that were stolen from:

• Your home during a break-in
• Inside your car
• Your bag, purse, or pockets
• Your hotel room
• An offsite storage facility
• A public place, like a cafe or a bicycle rack on the sidewalk

When Does Renters Insurance Not Cover Theft?

Renters insurance doesn’t cover all theft incidents, which may include:

• Items stolen from checked luggage, unless the airline provides documentation
• Car thefts (this should be covered by a comprehensive auto insurance policy, if you have one)
• Cash above a certain amount, typically a few hundred dollars
• Situations where the theft happened because of negligence

How to File a Renters Insurance Claim for Theft

Filing a renters insurance claim is relatively straightforward, but it’s important to follow all of the steps to help ensure you get a payout. Here’s what to do after a thief steals your personal belongings.

1. Document the Incident

Write out the details of what happened, including the day and time you noticed the theft and what the scene looks like. Include a list of the items that were stolen or damaged along with their estimated value. Take photos or a video that captures any visible damage to your belongings. Find any receipts or bank statements that can prove what you spent on those items.

2. File a Police Report

Insurance companies usually want you to include a police report with a claim for a theft. Report the crime to the local police department, and ask for a copy of the report. It’s also a good idea to let your landlord know about the theft. They may need to tell their own insurance company, and they may also want to install security devices in or around the home.

3. Call Your Insurance Provider

Now you’ll contact your renters insurance provider and file a claim. You may be able to do this over the phone, online, with a mobile app, or in person, depending on your insurer. The company will explain the steps involved and help you with the claim.

You may need to provide the following:

• Your policy number
• A copy of the police report
• Your written statement
• Documents that show the value of your items
• Details about the lost or damaged items, such as the model numbers
• The estimated value or cost to replace the items

4. Track Your Claim and Respond to Requests

Your insurance company may assign your case a claim number, which helps you track the process online or by phone. The company should also assign a claims adjuster who investigates your claim. They may contact you with any follow-up questions, ask for additional documents, and ask to see the damage in person, if necessary. Respond to any requests quickly to expedite the process.

5. Receive Payment

If the insurance company approves your claim, it will send a payment to you. This may come in the form of a check in the mail or a direct deposit into your bank account. The insurer typically subtracts your deductible amount from your payout. So if you’re supposed to receive $1,500 and you have a $500 deductible, for example, you’ll get a payment for $1,000.

Theft Prevention Tips

Preventing thefts can save you the headache of filing a renters insurance claim. Here are some theft prevention tips to implement:

• Lock your windows and doors when you leave the house and while you sleep.
• Install high-quality deadbolt locks on your home’s exterior doors.
• Install an alarm system to increase security and potentially get a premium discount.
• Keep your landscaping trimmed and add motion-detector lights outside so burglars have fewer places to hide.
• Don’t announce upcoming vacations or other personal plans that indicate when you’re out of the house.
• If you’re gone for more than a day, put your lights on automatic timers and ask trusted neighbors to pick up delivered packages.

Frequently Asked Questions

How Much Renters Insurance Do I Need to Cover Theft?

The amount of renters insurance you need depends on the value of your personal belongings. It’s a good idea to take an inventory of your items and estimate their total value to determine how much coverage you need.

Does Renters Insurance Cover Bike Theft?

Yes, renters insurance typically covers bike theft, whether it happens at your home or in a public place. However, there may be coverage limits, so check your policy for details.

Does Renters Insurance Cover Stolen Cash?

Renters insurance may cover stolen cash, but usually only up to a certain amount, typically a few hundred dollars. Check your policy for specific limits.

Protect Your Property Against Theft

Renters insurance costs about $15 a month on average, making it a good investment for protecting your belongings. Your policy covers you up to a certain limit against theft and other perils like vandalism and liability.

Getting quotes for renters insurance can feel time-consuming, but when you use Gabi®, a part of Experian, to compare renters insurance quotes, it can be a much faster process. Gabi can help you shop around for the best price and help you obtain coverage too.