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Burglary and theft- What's the difference in relation to an insurance policy?


We often read in newspapers that there was a theft while the residents were away and thieves have looted the entire house. On a detailed read we understand whether the entry was silent or violent into the house. A silent entry means the use of a duplicate key/known area or having the help of a known person from the house whereas a violent entry would mean breaking open the doors or windows and causing visible damage to the premises.

If we have to differentiate between burglary and theft it would be a difficult task as both look the same.

  • Burglary means the  illegal entry into a building with intent to commit a crime, especially theft.

  • Theft means taking someone's property but does not involve the use of force. 

Insurance policies define burglary and theft and the difference between the two is clearly laid out. Theft cover is usually taken as an add-on with burglary policy for which an additional premium  is charged.

Definition of burglary and theft under IPC sections

The term 'burglary' is not defined in Indian Penal Code. It is referred to as housebreaking under Section 454 which states:

Whoever commits lurking house-trespass or house-breaking, in order to commit  any offense shall be punishable with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine.

Section 378 of the IPC defines theft as, “Whoever, intending to take dishonestly any movable property out of the possession of any person  without that person's consent, moves that property in order to such taking, is said to commit theft.’’

What is burglary?

Burglary means the unforeseen and unauthorized entry to or exit from the premises by aggressive and detectable means with the intent to steal contents therefrom. It is a violent, forcible, visible entry and is supported by damage to the surroundings and premises.

A burglary insurance policy is a type of crime insurance that covers losses resulting from burglary. 

What is theft?

Theft insurance means the misappropriation of contents by any person with the intention of permanently depriving the insured and/or insured's family and/or employee(s) of the insured of such contents. 

Theft is committed by a person who knows the place, has done a complete survey of the place or has an accomplice in the form of servants from the house or unit.

The most important point to classify the occurrence as theft would be the lack of forcible entry or damage to the premises.

Theft insurance cover is for loss or damage to the interest insured by theft with no  actual forcible and violent entry or exit. Theft cover is easily understood with the help of exclusions of the policy.

Exclusions:

 (a) unexplained or unaccountable losses or disappearances

 (b) losses or shortage discovered upon inventory taking 

(c) losses directly or indirectly arising from fraud or dishonesty of the insured’s employees, agents or servants

(d) shortage due to errors or omissions

Involvement of  family members or items that were stolen by them, things that were robbed by any of the employees' housemaids etc. are not covered and it is recommended to read the policy wordings for exact coverage.

How does the wording work?

It was claimed that a supermarket was burgled by unknown miscreants during the intervening night between the 16th and 17th day of July 1996. The shop had insurance cover from an insurance company.  Surveyor was appointed by the insurance company and the survey report mentioned that  the ‘safe’ of the shop was opened by using the master-key for which it is to be treated as no burglary, as there being no sign of possible breaking into the shop/safe which is mandatory in order to admit burglary claim. One of the exclusion clauses  of the burglary policy was invoked in the facts and circumstances of the claim.

The claim was rejected citing exclusion. There was no theft cover as per the policy.

It is important to read the policy coverage and go through the exclusions for better understanding.

For insurance policies to operate on a burglary or theft loss, the exact definition must be met and a case must be filed and proved by the police report. The understanding of the difference in burglary & theft is essential for a claim under the policy as it enables  identify the strategies and collect the evidence necessary for a claim.

We at Zen Insurance assist in customizing the right Insurance cover to suit your needs and budget  . Please contact us for assistance.

Disclaimer:

Zen Insurance Brokers is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.

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