What Is Burglary Insurance?

Burglary insurance helps a person offset the costs of damages and item loss due to theft. This kind of insurance is usually not stand-alone; instead, it is included in travel insurance, home insurance, or personal property insurance. It is particularly important for small businesses whose owners risk losing their livelihood due to theft. Burglary insurance contracts usually require evidence that a person owned the stolen items through receipts, pictures, or the boxes the items originally came in. In addition, insurance companies usually raise premiums when a person is robbed or poses a higher risk for any reason.

This kind of insurance is essential for small businesses that could go out of business after a major theft. For example, a family-owned jewelry store might have half its inventory stolen, leading the owners to liquidate and close shop. This insurance is also called crime insurance and usually protects business owners from losses made by both strangers and employees. Burglary insurance for small business is often an add-on to business or property insurance.

It is invaluable for a person to have documentation proving ownership of his or her property in case it is lost due to theft. Insurance companies want proof that goods existed prior to a burglary and were not simply fabricated for monetary gain. Having pictures, original packaging, or any other physical proof of having owned the stolen property will make it easier to prove its existence to an insurance company in the event of a theft. Some insurance companies may also want to see proof that a police report was filed and that the victim made an attempt to get the stolen goods back. Insurance companies will also usually ask for the value of stolen items to be confirmed by a reliable third party.

The monthly rate of burglary insurance depends on many factors, including the crime rates in the area and number of times the insurance holder has been robbed. For example, it is common to have rates raised after being robbed and then making a claim to be reimbursed for the stolen items. The insurance company then views the house or business as at risk; plus, the customer has proved to be less profitable than most others. Sometimes an insurance company will drop a customer if he or she is robbed too many times, with the definition of “too many” occasionally being once or twice, depending on the company's policy on such matters.