In many cities, having cash stolen is a very real risk. Many people wonder,
Does renters insurance cover stolen cash? Does renters insurance cover a stolen prepaid debit card?
There are a couple of facets to the answer, so let’s take a look.
How Much Stolen Cash Does Renters Insurance Cover?
Renters insurance policies have sublimits for certain classes of property. This just means that rather than paying up to the policy limit for certain things like jewelry or cash, there’s a lesser limit for that class of property. Cash is definitely among them. When quoting from a standard HO-4 renters insurance policy, the relevant text reads as follows:
$200 on money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards, and smart cards.
This means that while yes, a renters insurance policy does cover stolen cash, it does so at a very low limit. There are two main reasons for this. The first is what’s called a moral hazard. That means that an insurance policy can’t be written in a way that would actively encourage false claims to be made. If the entire policy limit was available for stolen cash, you can imagine there is a subset of the population who would claim that someone lifted $10,000 in cash off them, trying to get a quick payday. The sublimit helps to mitigate that risk.
The second reason has to do with documentation. It’s nearly impossible to document the amount of cash you’re carrying at any given time. Maybe you could take a picture every time you open your wallet, but that’s unlikely. Cash isn’t like personal property that you can keep an inventory of. The amount on you at any given time ebbs and flows. You could leave the house with a thousand dollars on you to go shopping that day, but spend most of it.
You also have to keep in mind your deductible. If you have a $500 deductible, and a $200 sublimit on cash, and the money is the only thing stolen you wouldn’t bother to make a claim on it because nothing would be paid out. On the other hand, if someone broke in and stole your laptop, Ipad, and $150 in cash, you could claim that cash along with the other items. It’s also worth noting that money is money, regardless of the currency. So if you’re going abroad tomorrow and have bought Euros to take with you, those are considered to be cash as well and would have the same sublimit.
Does renters insurance cover stolen cash? Yes, but with some caveats and very low limits. Find out more from the renters insurance experts at Effective Coverage by calling (800)892-4308 or clicking above for an online renters insurance quote comparison!