If cash is stolen, if a window is broken… how much does “fire insurance” cover in the event of a violent burglary?

Without “coverage for household goods,” cash and precious metals are not covered in the event of theft!

Violent robberies have been occurring one after another across Japan. While crime prevention is important, if you actually become a victim, will your “insurance” compensate you for the stolen precious metals and cash?

Even if you have fire insurance, it will not cover the theft unless the insurance policy includes coverage for household goods,” said a financial planner at a major financial planning firm.

Izumi Oishi, a financial planner, says, “Many people have fire insurance policies that do not cover theft of their belongings. According to Oishi, most fire insurance policies have basic coverage, which includes

1. Compensation for fire, lightning, bursts and explosions
2. Wind, hail, and snow damage coverage
3. Water damage coverage
4. Compensation for external collision, water damage, theft, etc.
5. Compensation for damage, defacement, etc.

are said to be included.

Fire insurance covers “buildings” and “household goods. When you sign a contract, you can choose either both or just the building, and you can also remove coverage that you consider unnecessary (some coverage, such as fire coverage, cannot be removed).

For example, if a theft occurs and the building is damaged, such as doors and windows are broken, the “building coverage” of the fire insurance policy will cover the damage, and if furniture or other items in the building are damaged or stolen, the “household goods coverage” of the fire insurance policy will cover the damage. In other words, even if you have fire insurance, if your policy does not include coverage for household goods, it will not cover “precious metals” or “cash” in the event of theft.

Then, if a ring worth 1 million yen is stolen, will it be compensated for 1 million yen?

The maximum amount of compensation depends on the insurance company and the subject of coverage. For example, some insurers pay 200,000 yen per ring (or pair of rings), some pay 300,000 yen per ring (or pair of rings), and others pay slightly different amounts.

If cash is stolen, up to ¥200,000 will be covered.

If a ring worth 1,000,000 yen is stolen, does that mean that 1,000,000 yen is not covered?

If the value of the item exceeds the limit or is difficult to evaluate, it is safe to declare the item as “clearly marked property” and specify on the insurance policy that it is covered by insurance. However, the more coverage above the limit, the higher the premium will be.

What if cash is stolen?

If you report the theft to the police, you will be given an “acceptance number. You then contact the insurance company and submit the required documents. However, you must prove that the cash was indeed in your home and that it was stolen.

The insurance company may ask a variety of questions, depending on the insurance company, such as where the money was found and what it was used for.

Cash, stamps, and securities usually cost between 200,000 yen and 300,000 yen (depending on the insurance company). If a bankbook is stolen, compensation is covered if the money is withdrawn. For example, if the maximum coverage for a stolen bankbook is ¥2,000,000, the maximum coverage is the lower of ¥2,000,000 or the amount insured for household goods, per accident.

What about precious metals and bone and jewelry?

You will need proof of the object’s existence and value, such as payment statements, warranty cards, certificates of authenticity, photographs, and boxes in which the object has been stored. It may be helpful to make a list of watches, jewelry, bags, artwork, etc.”

For items that are difficult to appraise, such as antiques and works of art, it is safer to apply in advance as “clearly marked property.

For expensive works of art, you can take out a comprehensive movable insurance policy for individuals separately from the coverage for household goods.

On the other hand, even if you do not have expensive precious metals, if the insurance covers up to 300,000 yen, will it also cover a ring or watch worth 20,000 or 30,000 yen if they are stolen?

Insurance policies have a “deductible. For example, if you have a 50,000 yen deductible, you will not be compensated even if something worth 20,000 yen or 30,000 yen is stolen.

There are different insurance companies that treat deductibles differently. If you have a 50,000 yen deductible and incur an actual loss of 150,000 yen, you will receive an insurance payment of 100,000 yen after deducting the deductible, or you will receive full compensation if you exceed the deductible amount.

Check to see if you are not covered for theft.

Should we review our insurance coverage from time to time?

It is important to check the contents. In many cases, theft coverage can be excluded from the basic coverage, so you may have left it out when you signed the policy, thinking that “theft” was not necessary.

In recent years, insurers have stopped taking out long-term contracts due to the occurrence of large-scale natural disasters. In October ’15, fire insurance policies longer than 10 years were eliminated, and in October ’22, fire insurance policies longer than 5 years were eliminated.

‘Some of you with long term policies may have forgotten what you had in your policy. If you didn’t get what you needed, you may want to ask your insurance company if it is possible to add it to your current fire insurance policy. When you cancel your current fire insurance policy and re-purchase a new policy, if you have paid the premiums in a lump sum, the premiums for the remaining period will be refunded.

The longer the policy term, the higher the discount rate for premiums. If the premiums for the remaining period are refunded even if the policy is cancelled in the middle of the contract, it may be a good idea to sign a long-term contract.

In the case of renters, the owner has already purchased coverage for the building, and what the owner recommends purchasing is fire insurance coverage for household goods. It is important to check if “theft” is included in the policy.

Don’t be satisfied that you have fire insurance, but make sure that your household goods are covered and that you have the coverage you need. Please make sure you understand the coverage and match it with the coverage you need.

Izumi Oishi CFPⓇ , Senior Financial Planner certified by the NPO Japan FP Association. Career consultant. After graduating from university, joined Recruit Co. In 2001, she established her own FP firm. He has been offering lectures and training courses on economic education, life planning, career design, and asset building to universities and companies, using familiar newspapers for men and women of all ages. He provides objective financial planning and life and career planning for individuals.