Where would you be without your mobile devices and computer? If you’re like most people, it’s likely you can’t imagine living without them. In order to protect your devices—and your wallet—from a costly technology breakdown or loss, it’s important to make sure you choose the right insurance policy.
Here is what you need to keep in mind when shopping for insurance that covers your electronics:
Your homeowners policy may not cover your devices. Many people assume that they are fully covered for the loss of or damage to these items under their homeowners policy. Unfortunately, that’s not always the case.
In most states, your homeowners policy does consider your electronic devices to be contents of your residence, provided that you purchase them in your name and don’t use them solely for business purposes.
But coverage gets tricky in terms of the type of loss you may ultimately sustain. With named perils coverage for contents, you will be covered for losses sustained due to fire, vandalism, smoke damage, and other perils specifically named in your policy. If a situation not named in your policy causes the damage, you may not be covered.
You may want to consider all-risk/special form coverage. If you have special form or all-risk coverage for your contents, you have much broader coverage—every peril is covered except those specifically excluded.
For example, all-risk/special form coverage might cover your loss if you accidently drop and break your laptop, if the laptop becomes infected with a virus, or if you have a power surge in your home that destroys your computer.
Most companies offer an option to add all-risk coverage for your contents, but it can be costly. In an effort to save money, many people instead choose to carry higher deductibles to keep premiums more reasonable. However, all property claims under a homeowners policy are subject to a deductible, so it may not be cost effective to add this endorsement unless your electronic items, individually and collectively, are worth more than your deductible.
Theft may not be covered. When it comes to mobile and other electronic devices, many people are worried about theft. Depending on the state in which you live, you may have to add an off-premises theft endorsement to your homeowners policy to protect against losses from a theft that occurs away from your home. This coverage can be added for an additional cost and is also subject to your deductible in the event of a claim.
Another option is to add a floater or scheduled rider to your homeowners policy that offers all-risk coverage, including theft, with no deductible applicable where items are specifically scheduled (appraised and named in the policy).
Coverage depends on the type of device. Typically, smartphones are not eligible for a floater or scheduled rider. There are even some companies that won’t allow a laptop to be scheduled because they view it as a claim waiting to happen—a child away at college may accidentally leave a laptop on a bus or a laptop may fall out of businessperson’s briefcase, for example.
When you purchase a new device, review the coverage the retailer offers with your purchase. Some retailers offer quite extensive coverage, including theft, for a reasonable cost, while others offer only limited coverage. Always examine the fine print before purchasing additional protection from a retail store, and consider calling your insurance agent before the purchase to determine what coverage is best for you.
Heidi Petschauer Fox graduated from St. John’s University in Queens, N.Y., in 1983 with a B.S. in management. She joined her late father’s firm, Petschauer Insurance, in 1982, became principal in 1995, and now shares ownership with her partner and cousin, Erwin Petschauer. She received her Certified Insurance Counselor (CIC) designation in 1997. She currently facilitates the professional and creative development of the entire Petschauer team and manages the personal lines and social media departments.