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Will My Homeowners Insurance Cover Cash in My Home?

Jul 20, 2022

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Will My Homeowners Insurance Cover Cash in My Home?

Having your home broken into can be a frightening experience. In such a case, you would expect your homeowners' insurance to kick in and cover the items that are missing. Most of your material things will more than likely be covered. However, you may not be so lucky if you have cash in your home and it goes missing. You may get a portion of your money back, but you won't necessarily get all of it back. There is a reason for this. Your insurance policy will explain at what amount your recovery is capped.

Coverage for Your Home’s Structure

During a break-in, it's a good possibility that the structure of your home will be damaged in some way. The way your policy is written will determine how much money you will receive for your damages. If you are insured for the replacement value, you will receive enough to have the damages repaired or replaced. For a cash value policy, you will receive the amount needed to repair your home minus any depreciation. During a break-in, windows and doors may be damaged. Most of these damages should be covered so that your home can be repaired.

Coverage for Personal Property

Personal property includes furnishings and possession you own that isn't attached to your home or its physical structure. Items like jewelry, electronics, and cash are normally very valuable. They can also be liquidated rather quickly. Because they hold more value than similar assets, you may want to talk to your agent and purchase an additional endorsement to ensure you are fully covered for those items. An additional endorsement will cover coin collections, fine art, expensive jewelry, antiques, or any other item that is highly valued.

Limited Cash Recovery

Homeowners' insurance policies are exceptionally limited on the amount of loss they will cover if cash is lost or stolen in a home burglary. Cash is covered as an aggregate asset, and limits are applied, just like they are with antiques and other collectibles. Unless there’s a provision in your policy or an endorsement has been purchased, you will only receive a percentage of what was lost. In order to recover a higher amount, your policy will have to list in detail those amounts. It is much safer to keep your money in a safe deposit box or an interest-bearing savings account.

Safer Alternatives

Storing large amounts of cash in your own home is a recipe for disaster and can be quite costly if you experience a break-in and your money is stolen. There are much safer alternatives that will ensure your money is protected and even pay you dividends in the process. You can deposit your cash in any number of bank accounts, ranging from a checking account to a 401k or a money market account. Savings accounts that pay interest are also an option. It's much harder to prove loss if you have no way to verify how much cash you had on hand. If you have your money in a secure bank account, you will know how much you have available to you at all times.

John E. Peakes Insurance Agency Can Help!

Knowing how your homeowners insurance works is important. It lets you know the best way to protect yourself from financial loss. Contact the agents of John E. Peakes Insurance Agency today to know more about your homeowners' insurance. We will go over your insurance policy with you so that you understand all of the terminologies as well as what is and is not covered.