If you’re a homeowner living in Chicago, you’re in luck: homeowners insurance does in fact cover real property (damage to the home) and personal property (theft or damage to personal goods) in the event of a break-in.
That’s the good news. But this is insurance we’re talking about here. Which means that coverage is going to come with a whole lot of “gotchas.”
The biggest coverage gotchas to look out for include:
- Coverage limits: Insurance companies will only pay out so much for property damage and stolen goods.
- Depreciation: You may not receive equal value for a stolen item from when you first bought it.
- Circumstantial limitations: Coverage may be voided entirely depending on the property in question and the nature of the insurance claim.
This article looks at some of the factors which could limit or void your insurance coverage after a break-in. But we always recommend contacting your insurance company as well to learn more about your current coverage.
Protecting your home with Chicago-based Alert Protective can be a huge deterrent for would-be criminals, and may even reduce your monthly homeowner’s insurance bill. Nice!
Give us a call at (773) 685-8383 or schedule a time to speak with an expert security consultant today.
Homeowner Coverage Limits for Break-Ins
After a break-in, the insurance company will assess the damage and loss to property and pay the homeowner up to the amount specified in their homeowners insurance contract. This is called a coverage limit.
To complicate matters, insurance contracts specify different coverage limits for different types of coverage.
- Coverage A and B covers real property i.e. your dwelling.
- Coverage C covers personal property i.e. jewelry, electronics, etc.
For example, if a thief breaks into your home through a window and steals your television, you’re covered for both the window and the television, but under different types of coverage, each with specific coverage limits.
Coverage A & B:
Coverage A & B encompass real property i.e. the home itself. It insures a homeowners against damage such as:
- Windows and window frames
- Doors and door frames
- Garage doors
- Locks of all varieties
Coverage limits for dwelling coverage (A & B) is much more generous than personal property coverage (C). You’re very unlikely to hit your coverage limit for property damage after a break-in.
Coverage C encompasses personal property i.e. your personal goods within the home and on the property. It insures a homeowner against damage and theft to:
Coverage limits for Coverage C is usually pegged around 50% to 70% of your dwelling coverage (Coverage A and B) according to the Insurance Information Institute (III). There are, however, exceptions to this rule.
- Jewelry coverage is often capped at $1,000 to $2,000.
- Vehicles on the property, including campers and trailers, aren’t covered under homeowner’s insurance (but they are covered under your vehicle insurance).
Raising Coverage Limits
Homeowners aren’t trapped within the prescriptive coverage limits of their original insurance contract. A few ways to increase coverage limits include:
- Increasing coverage through a different tier of insurance. Insurance companies tend to provide multiple levels of protection at distinct monthly rates.
- Raising sublimits on high-value items. You can protect high value items like jewelry and even electronics by requesting a sublimit on a particular item in the home.
Depreciation & Insurance Reimbursement
Your homeowner’s insurance contract distinguishes between two types of reimbursement methods: actual cash value (ACV) and replacement cost value (RCV).
Homeowners can choose between ACV or RCV insurance protection. Because these two choices directly impact how much your insurance company pays you after a break-in, it pays to know more about these different reimbursement methods.
Here are the basics of ACV and RCV:
Actual cash value: This is the value of your goods in today’s terms, not in terms of when you first purchased them. In other words, if you paid $1,000 for a computer 3 years ago, but it’s only worth $700 today, you’ll be paid the amount it’s worth today ($700) and not what it was worth when you bought it ($1,000).
Replacement cost value: The opposite of actual cash value. You’ll receive what you paid for the item when you first bought it, without taking into account depreciation.
Insurance companies tend to charge higher monthly rates for replacement cost value contracts, for obvious reasons. But it may end us saving you thousands in the event of a break-in.
A few circumstances exist where your insurance company will not cover you after a break-in, including:
- Homes which are under construction, or any home which allows easy access in and out, could invalidate your insurance’s protection.
- Insurance claims which are found to be fraudulent won’t pay out anything, and may send the homeowner to jail.
- If a break-in goes unreported to the police and insurance agency after a specific amount of time has elapsed (different under each insurer.)
This is not a full list, of course. Every insurance company will specify events where they won’t pay out a claim. But you can protect yourself by locking up your home, contacting the authorities quickly after a break-in, and of course, not making false insurance claims!
Want to Lower Your Homeowners Insurance Bill? Install a Security System!
Did you know that most homeowners insurance companies offer discounts for families who protect their home with a professionally monitored security system? In some cases, the fine print on a policy requires homeowners to secure their home to benefit from certain insurance protections.
It’s just another reason why you want a professional security system installed in your home. And no security company in Chicago can match the prices and professionalism of Alert Protective.
If you’d like to learn more about how we can help secure your home, call us at (773) 685-8383 or schedule a time to speak with an expert security consultant today.