The Insurance Definition of Theft

Generally, insurance companies regard theft as someone taking an insured item that does not belong to him without permission. This broad definition is narrowed by the language of the policy you have; therefore, there is no uniform definition of theft that applies to all policies in all circumstances. What qualifies as theft in one case may not in another.

Theft of your automobile is covered under your comprehensive insurance. Whether your stolen vehicle is recovered or not, your insurer will conduct an investigation to ensure that your situation fits its definition of theft. Forced entry and robbery of your vehicle without your knowledge generally meet the criteria, and some insurers even consider it theft if people you know use your vehicle without your permission. However, it is not officially theft until your insurer's auto theft experts conclude that you did not intentionally lose or damage your vehicle.

Burglary from your insured home generally qualifies as theft under your homeowners insurance, but your policy's definition of theft may also apply to items outside your home. Some homeowners insurance policies offer protection, usually as a stated percentage of your contents coverage, for items in a secondary location such as a storage facility, second home, vacation spot or, in some cases, your child's college dorm. This coverage may require evidence or suspicion of actual theft and may not include items you simply lose; therefore, lost jewelry must be insured separately.

Theft coverage offers to replace, or settle at actual cash value, items stolen from an insured residence or business. However, it also covers damage to the insured building as a result of theft. In the case of an automobile, it covers damage done to the vehicle if it is recovered. If your home is damaged from a break-in but nothing is stolen, the damage would still be covered under your theft protection.

Businesses are at a greater risk of theft than homes because employees and executives might steal from the business. This coverage has several names depending on the insurer, but "full theft" applies to casual theft and other dishonest appropriation that may take forms other than forced entry. Some insurers may not offer this type of coverage to retailers or hotels, according to BusinessDictionary, because of the high risk of this type of loss.