Does homeowners insurance cover stolen cash?

If you are not willing or able to use a bank or similar institution, you may be thinking about keeping some “rainy day” cash at home. Yet, you may also be worried about the risk of theft and wonder whether your homeowners insurance policy will cover this cash in the event of a break-in. There is some risk involved here, and you need to know the answer to your question before you decide to keep excess cash at home. Read on to learn more.

Does homeowners insurance cover stolen cash?

Typically, a home and contents insurance policy will include an upper limit on what the company will pay in the event of theft. For example, this limit could be $200 for money, banknotes, and collectible coins. You may be able to get a higher limit by shopping around with various insurance companies, but don’t expect any significant increase. Some insurance companies also offer home and contents insurance for high-value properties, which may also include a higher limit for cash coverage.

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Why are there limits to homeowners insurance coverage for cash theft?

You may wonder why an insurance company would not cover cash in the same way it would if a thief were to run off with some other expensive item of yours. In this situation, a homeowners policy provides coverage for the building, structure, contents, and liability, but there are always specific limitations when it comes to items of value. The company will usually place an upper limit on valuable items like jewelry, watches, precious stones, and cash. Still, you may be able to get a rider or a separate policy for these items. In this case, the company may run an appraisal to get a specific valuation and extend coverage

You Can’t Quantify a Cash Loss

When the insurance company pays out, it will typically value the property using replacement cost or actual cash value. The actual cash value approach will pay you an amount equal to the original cost minus any depreciation. Replacement cost is more expensive as it will cover the cost to replace it with an item of the same quality and type.

The problem with money is that it’s virtually impossible to prove that you had a specific amount in the home at the time of the break-in. After all, even if you had the individual numbers that identify each banknote, there are so many of these notes in circulation that it would be impossible to track them down. If you were to claim a large amount of cash, the insurance company would have to take your word for it without any evidence that you even had the money in the first place or that you lost it during a break-in.

What about rare coins?

If you have some very rare coins, you may be able to purchase a rider or get coverage from a specialty insurance company. But otherwise, if you want to know if cash is insured at your home, the answer is that there are clear limitations.

Should you keep cash at home?

According to the FDIC, 5.4% of US households do not have a bank account, so you’re not alone if you are looking for somewhere else to keep your available cash. However, you should think twice about storing large amounts of cash at home. It may be better to store a sizeable amount of cash and any other valuables in a safety deposit box. At the very least, it’s worth getting a solid, impenetrable safe that you can bolt to the floor at home.

Can you claim stolen cash on your home insurance?

A standard homeowners insurance policy will have an upper limit and a nominal amount for cash, banknotes, and collectible coins. You may be able to shop around and get a slightly higher limit, but insurance companies typically won’t cover you for much when it comes to stolen cash. Your best bet is to keep your cash in a bank, safety deposit box, or a high-security safe.

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