Porch Pirate Protection: Homeowners Insurance May Cover Theft, but Is It Worth It?

Man steals packages off porch.
AvailableLight / Getty Images/iStockphoto

Package theft of deliveries from Amazon and UPS has risen by 15% this year, according to a new Circuit study. According to research reported by GOBankingRates, Washington D.C. consumers have experienced the most lost packages in the past five years.

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If you are missing a package that shows as “delivered” based on your tracking information, you’ll want to check security cameras to see if it was stolen. After that, your first course of action should be to contact the seller and see if they will issue a refund, says Michael Orefice, SVP of Operations at SmartFinancial, a digital insurance comparison engine.

“Technically, once a package is documented as having been delivered to you, the theft is on you, not the seller. If your package has been delivered, the seller will use tracking information as the reason they will not refund you,” he said.

However, it’s worth contacting the customer service department to request a refund or to have the product shipped again. Sometimes, companies will oblige in order to avoid a chargeback, which reflects poorly on their business.

If you’ve used a credit card for your purchase, you can contact your credit card company and file a claim. “Never buy items online using a debit card because you won’t have the option of getting help after a payment is deducted from your checking account,” Orefice told us.

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If that doesn’t work — or if you paid with a debit card — you can file a police report. Before you take this step, however, look for the package nearby and check your security camera for any footage. A home security camera can be helpful to prove the item was stolen and potentially help you recover the item or receive a refund.

In a worst-case scenario for high priced items, you may also be able to file a claim through your homeowners insurance. “You can file a claim for any case of theft, but you will want to file a police report first, preferably with security cam footage you or a neighbor may have,” Orefice said.

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Before you file a claim with your homeowners insurance, though, make sure the price of the item exceeds your deductible. “For instance, if the item cost $500 and you have a $1,000 deductible, you’ll have to pay the deductible first so you wouldn’t be covered,” Orefice said. “But let’s say it was a $1,200 item and you have a $1,000 deductible. It’s up to you if you really want the $200 that you’ll get back.”

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You should be aware that your homeowners insurance premium is likely to rise after you file a claim, so you want to make sure the money you get back will exceed that potential increase.

“You will see a rate increase around 9% if you’ve never filed a claim and up to 20% if you’ve filed several claims,” Orefice said. “You may pay even more than the percentages above, depending on the type of claim. Chances are that coverage for a $500 stolen package will raise your rate much less than $5,000 to repair a roof.”

To prevent porch piracy — and potentially reduce your homeowners insurance rates — Orefice recommends investing in a home security system. “You’ll get a huge homeowners insurance discount if you go with a home monitoring security system with 24-hour surveillance. You can also buy more affordable ones at Target or on Amazon and will still get a good discount on home insurance premiums,” he said.

During the holiday season, and year-round, an ounce of prevention can prevent hassles and costly theft.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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