DYK: The difference between burglary and theft in your home insurance policy

Your house is one of your most important assets, so insuring it should be just as important. Given the frequency of natural calamities, the importance of home insurance can’t be stressed enough. But a house insurance policy doesn’t just insure your house against natural catastrophes, it also insures the contents of the house against burglary. But did you know that your house insurance policy will not cover theft? So what is the difference between burglary and theft? Let’s find out.

HOME INSURANCE

There are two types of insurance policies to cover your house: basic fire insurance policy and a comprehensive policy, also called the householder’s package policy (HPP). The fire policy covers your house and its contents against fire and other allied perils, including storm and flood. Some insurers may ask you to pay an extra premium to cover other natural disasters such as earthquakes.

HPP, over and above the fire insurance policy, includes covers that insure contents of your house against burglary and mechanical or electrical breakdowns. You can also add covers such as a public liability cover, which compensates a third party for losses caused by you; or a personal accident cover offering insurance on accidental death or total permanent and partial disability due to an accident.

LEGAL DIFFERENCE BETWEEN BURGLARY AND THEFT

While a packaged home insurance policy offers financial protection in case of damage due to natural calamities, it also compensates you if somebody breaks into your house and steals your valuables. Burglary is a real threat and it is good that your insurance covers it. But you must go through the insurance policy’s details to know how it defines burglary. While you may use the words burglary and theft interchangeably, the two have a different meanings in law and this distinction is observed by the insurers too. Burglary, by definition, involves a break-in through violent or forcible means. So if a person breaks a window to get into the house or break open your cupboard to steal, it is considered burglary. Usually, an HPP covers burglary but not theft.

Theft would mean the person committing the crime had access to the house or its valuables. For example: you may have dropped the keys of your house near the door, and come back home to discover your jewellery stolen. This is more a case of negligence. The insurer could say that you should have kept the keys safely. The reason why insurers don’t cover theft is because it is difficult to administer and often can be due to negligence. But some insurers also offer theft insurance as an add-on cover to the HPP.

HOW TO MAKE A CLAIM

As soon as you discover a burglary, file a first information report (FIR) and intimate the insurer. The insurer will need the copy of the FIR and will also ask for an incident report. It will then appoint a surveyor to investigate the claim. Once approved, the insurer will typically pay for the insured assets on market-value basis.