While we hope it never happens, break-ins to our homes do occur. I returned home this summer to find my home was burglarized. This article shares what we learned from this unfortunate experience and ways to improve your home security and insurance coverage.
If you return home and see evidence of a break-in:
1. Contact the police! They’ll ask if the burglar is still in your home. If you’re not sure whether the thieves have left your property, wait until the police arrive to enter your home. Our first instinct is to rush into the home to check on things, but remember that it’s much more difficult to recover from physical harm than from the loss of belongings and property damage. Note: If you do walk through your home to see what’s been stolen or damaged before the police arrive, don’t move anything because the police need to see all the evidence.
2. Walk through your home with the police. Once the police arrive, walk through the home, pointing out any stolen or damaged property. This list doesn’t need to be comprehensive at the time as you’ll remember things that are missing days later. What’s important is that the officer knows about the major items that were stolen so that they can search the community and start your police report. Note: Take as many pictures of the scene as you can, especially of any property damage like a busted door, as it may be required as proof for reimbursement later.
3. Contact your neighbors, or your neighborhood Homeowners’ Association. Your neighbors need to know what happened for their own safety and because they may have seen some unusual activity or caught footage on their own surveillance systems.
4. Secure your home. If a door (or door frame) or window was busted as part of the break-in, first try to secure it so you feel safer. This may require nailing a board across a door that won’t close to keep it secure until a carpenter can repair the door.
5. Contact your home insurance company to file a claim. This is where you want to have your insurance coverage booklet in front of you if possible. Your home insurer will require your policy number and basic information regarding the break-in. They’ll open your claim, and you’ll receive a call from the home insurance adjuster in the coming days.
6. Create a list of stolen items. Walk through your home and write down everything you notice that’s missing. You don’t need receipts at this point, however including as many serial numbers as possible is helpful. This list should be sent to the police officer working your case and will be one of the documents required by the insurance claims adjuster. Send your list of stolen items to the police officer that responded to your break-in.
A break-in is a stressful event, so be sure to take care of yourself. Try to eat dinner and drink plenty of water. These two things are out of mind during such an event for a good reason. A pint of your favorite ice cream also goes a long way to calm your nerves.
The claims process
The claims adjuster works for the insurance company, who works with you throughout your claim. They facilitate the claims process and watch for fraud as people unfortunately try to take advantage of the system.
Here’s how the claims process works.
1. The adjuster calls to ask for your version of what happened (usually within a few days) and requests the following:
- Copy of the police report. They may request it from the police on their own, which will take longer.
- List of the stolen items. This is likely the same list you gave the police, but the adjuster will also ask for the age of your stolen items. This can be in months and years as the age is used for depreciation purposes (discussed later).
- Evidence to show you owned the items stolen, such as receipts or photos. Many of us buy items online, and you can access old invoices on many websites to make the process easier. If you don’t have receipts for gifts or other miscellaneous items such as jewelry, a copy of a photo with you wearing it is useful.
- Invoices for any structural repair to your home after the break-in. The adjuster will require the actual invoice indicating the total cost of work that has been completed.
2. Replacement report. After you provide the adjuster with the requested items, they generally send the stolen items list with the age of the items to a third-party valuation service. This service finds similar or identical items online through stores and lists the price, including sales tax, in the calculations.
- Replacement value. The cost to buy the same or a similar item.
- Depreciation. Reduction in value due to the age of the item. Electronics depreciate very quickly. Items like jewelry have little or no depreciation.
- Actual cash value. The replacement value minus depreciation is how much you receive right away if you don’t replace items. Once you replace items, you recover the depreciation.
3. Pay special attention to the report. Either have your insurance agent, advocate or financial advisor help you walk through the report to make sure the coverage levels and payout information is correct. Sometimes claims adjusters don’t indicate the correct limit for items such as “Jewelry, Watches and Furs.” The standard limit for such items is generally $1,500; however, many insurance agents wisely increase this limit to $5,000 or more for families to cover items outside of separately identified items. Make sure the limits and the math are correct before agreeing to a disbursement.
4. Receiving payment. Once you approve a disbursement, a check is mailed to your address of record. Separate checks are distributed for your personal property (i.e., stolen items) and structural repair.
5. Replacement of items. Once you start to replace items, collect your receipts and submit them to the claims adjuster to recover the depreciation. The adjuster will ask you to write the item number from the report on the receipt for easier tracking. Once approved, checks will be distributed for these items. This step may last several weeks to months as you work to replace your stolen items.
Recommendations for your home insurance coverage
We recommend asking for separate coverage for high-value items such as jewelry, artwork or collectibles, especially if they’re difficult to replace. The insurance company generally calls this a “rider” on your policy. Furthermore, your coverage has certain blanket limits, such as $1,500 for “Jewelry, Watches and Furs.” It can make good sense to increase those limits to higher than what you think it would cost to replace items that aren’t covered separately under a rider. Increasing this limit to $5,000 or $10,000 doesn’t add a whole lot to your premium cost, but it can make a huge difference when you have to make a claim.
Note: Keep copies of your receipts and get periodic appraisals on your valuable items to ensure you’re properly covered in the event of a loss. A recommended practice is to walk through your home with a camera and video/photograph your items. Store this video securely in the cloud – the more proof you have, the better. The video is also useful as you may not remember all the items you have in your home.
Recommendations for your home security
We all think it can never happen to us, but it can, and having a home alarm is a must. Homes without active alarms are 300% more likely to be broken into, as burglars watch for these things. Other peace of mind solutions include a doorbell camera and cameras around the perimeter of your home. After a break-in, you’ll have months where just being able to confirm that your house is okay while you’re away will do wonders for your peace of mind.
It’s also important to check the physical security of the entry points to your home. This includes adding a deadbolt to doors that don’t already have one. Also, adding a security arm to a door frame is an effective way to strengthen your door.
Note: It’s important to have a cash reserve for events such as this. When you have a break-in, it’s an emotional crisis whereby having the resources to replace items and pay for expensive monitoring devices to feel safe again in your home need to not be a problem financially.
Please contact Merriman if you have any questions about home insurance or for any of your other financial planning needs.