While on vacation, my credit cards were stolen. Will my homeowners insurance cover fraudulent purchases?

Unfortunately, your homeowners insurance policy is not the place to look for protection against stolen credit cards. A home insurance policy will repair or replace items that are broken or lost, even items that are stolen, but protecting against the use of those items while they are stolen is beyond the scope of what your home policy is meant for. In essence, the policy would cover the actual theft if the cards had a cost to replace, but it will not pay for purchases made with the cards.

In today's digital world, credit card theft is a common crime, and most credit card issuers include basic theft protection as part of the credit card plan. In order to be effective, you have to report the card stolen as soon as possible, and the company can not only avoided charging you for unwanted purchases, they can assist the authorities by providing tracking information of where the cards have been tried to be used.

Some credit card companies will have a fee for providing stolen card insurance, but the cost is minimal compared to the damage that a stolen credit card could do to your credit score. A credit card number is a first step in identity theft, and that could lead to someone else having credit cards in your name that you are never even aware of until your credit score plummets. Insuring your credit is always a good idea, and is the basis behind companies such as the LifeLock identity protection company.

On the other hand, any items that you purchased with the credit card before it was stolen are covered. For example, if the card was stolen while your hotel room was being burglarized, the stuff you had bought with the card will be replaced by your homeowner's policy as long as you are able to provide receipts and sufficient proof of ownership. So your own property losses will be minimized, and canceling the card right away will minimize the chance of retail fraud.