Computer Insurance
and Consumer Electronics

Computer insurance and consumer electronics hold many myths today, and there is a lot of misinformation about consumer electronics and how it is treated by insurance companies. Most people I talk to think that if they have homeowners or renters insurance, their consumer electronics is covered.

But nothing could be further from the truth.

Sure, some of the property is covered. But there are a bunch of limits and exclusions that will surprise you if you have a loss and file a claim.

Don’t wait until claim time to learn about this important coverage. Read this article carefully and make good decisions about your computer insurance coverage.

Twenty years ago, consumer computer usage and ownership was not all that common. If you owned a cell phone, you carried it in a bag the size of a small purse. Pagers were widely used, and you could still find pay phones everywhere. There were few home fax machines. Answering machines were pretty common, but voicemail was still on the horizon. Scanners were non-existent. Printers and copiers were huge and expensive, and you didn’t see them in most homes. If you had satellite TV, the dish was about eight feet across and sat out in the back yard. And Personal Digital Assistants (PDA) and MP3 players had not been invented yet.

But today....

In your home you could have:

• Desktop computers with monitors

• Laptop computers

• Multiple printers

• Fax machines

• Combination fax, scanner, copier

• Multiple TVs

• VCRs

• Video cameras

• External hard drive

• DVD players, stationary or portable

• Multiple cell phones, or mobile devices

• Satellite TV system with a 24” dish on the roof

• Ipods/MP3 players

Your home may not have that amount of electronics, but then again, you might have more. The way that consumer electronics prices have tumbled over the years makes ownership much easier for more and more people.

But...is it covered? Does your homeowners or renters insurance cover your electronics?

We run three separate businesses out of our home. Most of our electronics are used in our businesses. But are they covered by our homeowners policy?

Do you have a home business? There are millions of home businesses... everything from home daycare to a service business to multilevel marketing businesses. Many times, those entrepreneurs own office electronics for their home business. Do you use your computers and other electronics for any kind of home business, or even for your employer? Even if you’re answering office email on your home computer, it could be considered “business use.”

Are they covered by YOUR homeowners policy?

Are they covered if they are business-related?

Here is the answer to those questions...

MAYBE!!!!

What happens if your desktop or laptop computer is stolen, either from home or away from home? Is the theft covered by your homeowners insurance policy?

If you’re carrying your laptop through an airport anywhere in America, your laptop is at huge risk for theft. (See more below) What if your laptop is stolen while you’re in the airport?

In the Homeowners or Renters Policy, Coverage C, Contents, there are special limits of $2,500 for “property, on the residence premises, used primarily for business purposes.” The policy says there is a $500 limit for “property away from the residence premises used primarily for business purposes.” Of course, you will have a deductible to pay first, so if your deductible is $500 or more, you won’t get ANY money from the insurance company for this loss.

How about other kinds of damage that your computer might sustain?

• Accidental damage, such as dropped equipment, falls, liquid spills and auto collisions.

• Water damage

Those kinds of damages are not covered under your homeowners or renters policy. But they are covered with Computer Insurance.

How about your:

• Personal Digital Assistants (PDAs)

• Smartphones

• Digital cameras

• MP3 players

• Scanners/Faxes/Copiers

• Printers

• DVD players

• Flash drives

• Servers

• External hard drives

• Digital camcorders

• Peripherals that connect to your computers through an USB port, Firewire, PCMCIA or another input

Are they covered? Yes, but only for the following perils:

• Fire or lightning

• Windstorm or Hail

• Explosion

• Riot or Civil Commotion

• Aircraft (not in aircraft, but if aircraft fall on your stuff.)

• Vehicles (not in vehicles, but if vehicles crash into your stuff.)

• Smoke

• Vandalism or Malicious Mischief

• Theft

• Falling Objects

• Weight of Ice, Snow or Sleet

• Accidental Discharge or Overflow of Water or Steam

• Sudden and Accidental Tearing Apart or Bursting (of a steam or hot water system).

• Freezing

• Sudden and Accidental Damage from an Artificially Generated Electrical Current

• Volcanic Eruption

Any of the electronics listed above could be used for business. Remember, the limit is $500 off-premises.

And most of the things that will happen to your stuff IS NOT COVERED!!

Did you know these facts about computers?

• Accidental damage is the number one cause of loss

• Theft is number two cause of loss

• Power surge is number three

• Manufacturer warranties do not protect your computer from accidental damage

• Even though some manufacturers do offer special “damage only” coverage, they do not offer coverage for theft, power surges, natural disasters or vandalism.

You already know how easy it is to have electronics with replacement value in excess of $2,500. There are loaded desktops and laptops that easily exceed $2,500 EACH.

And what about the software and sensitive data in your computer? Is that covered, too?

Not likely. In the Homeowners and Renters policies, under the “Property Not Covered” section, “business” data, including data stored in computers and related equipment is not covered.

So, you have some choices:

1. Buy a Personal Property Endorsement to add coverage to your homeowners policy. Downsides to this choice are (a) many endorsements only pay the Actual Cash Value of the damaged property, not replacement cost, and (b) perils like Accidental Damage, Drops, Falls, Liquid Spills and Auto Collisions are not covered.

2. Buy a custom computer insurance policy that just covers your computers and other electronics, like:

• Desktops

• Laptops and notebooks

• Personal Digital Assistants (PDAs)

• Smartphones

• Digital cameras

• MP3 players

• Scanners/Faxes/Copiers

• Printers

• DVD players

• Flash drives

• Servers

• External hard drives

• Digital camcorders

• Peripherals that connect to your computers through an USB port, Firewire, PCMCIA or another input

In May 2006, burglars stole a laptop from the home of a data analyst at the Department of Veterans Affairs. The laptop contained the sensitive personal information of over 26 million veterans and military personnel. The FBI said that the laptop was recovered after an informant “snitched,” motivated by a $50,000 reward.

But it’s not just companies that deal with consumer data that are concerned about thefts. Companies whose employees have laptops are naturally concerned with the value of the computer when it’s the company that owns the laptop.

The Ponemon Institute, a privacy risk management think tank, released an extensive study in June 2008 entitled “Airport Insecurity : The Case of Missing and Lost Laptops.” They studied laptop security at 106 American airports and found that there is an average of 12,000 laptops lost, missing or stolen at American airports PER WEEK! The airport with the worst record is Los Angeles International, with about 1,200 per week. The nation’s busiest airport, Atlanta’s Hartsfield, was in eighth place with 450 per week.

Further, the study found that only 33% of the laptops within the airport’s Lost and Found Departments are ever reclaimed! That means that the remaining 67% of unclaimed laptops are either sold or disposed of by airport authorities. Can you imagine the amount of sensitive personal and business data contained in those laptops? No one knows what happens to that data, but it is ALL at risk.

The leading company in the world for computer insurance and portable electronics insurance is Safeware Insurance. They have programs for students, individuals, small and large businesses at very competitive rates.

Let me tell you about it.

Education Computer Insurance

Students face a higher risk of damage or theft than a normal adult user. Students can experience accidents when they’re putting their stuff into their locker, or accidentally get bumped in a busy hallway, or when they’re running to the bus. A soft drink could be spilled on the keyboard, or they could sit their laptop bag down somewhere and later find it missing.

This policy protects students’ computers against Accidental Damage, Theft, Vandalism, Power Surge, and Natural Disasters at any location within the USA, Canada and while in transit.

Small Business Computer Insurance is for any sized business with property values up to $49,999, covering Accidental Damage, Theft, Fire, Vandalism, Power Surge and Natural Disasters.

Commercial Computer Insurance is a group plan for organizations that have property value in excess of $50,000. Coverage can be one of the following: Comprehensive (Accidental Damage, Theft, Fire, Vandalism, Power Surge, and Natural Disasters); Theft ONLY, or Accidental Damage ONLY.

Commercial Computer Insurance can benefit organizations such as:

• Schools and colleges that want to make their student’s notebook computers more safe and less at risk.

• Corporations issuing notebooks and laptops to their workers, and wishing to minimize their risk of capital loss.

In these organizations, the equipment is owned by the corporation and used by the employee or student. Experience has shown that if an individual does not own the computer, he or she is likely to take less care of the item than if they owned it themselves. Schools and businesses need to insure their equipment against the perils that could turn their expensive equipment into unusable junk.

Safeware Insurance policies do not depreciate for age and condition of your electronics. If you have a claim that requires replacement of your equipment, they pay for like kind and quality of the equipment you had. That’s a HUGE difference from the Homeowners and Renters policies, and could mean thousands more dollars to you in a fire or theft claim.

Worldwide Coverage is an endorsement that adds global coverage to your policy for a very low price. Standard coverage is for the USA, Canada and Puerto Rico.

Mobile Advantage insures PDAs and smartphones. You likely purchased your unit at a big discount when you signed up for a service plan. If your device is damaged or stolen, you’ll have to pay full retail for another unit. However, with Mobile Advantage, you’re only responsible for the $50 deductible per incident to get a brand new device.

For more information about Personal Electronics Insurance for your student, yourself, your business or your school, Click HERE For Personal Electronics Insurance.

Can you get your stolen laptop back?

There is a way that you can retrieve your laptop after it’s been stolen.

Three burglary suspects were arrested on February 1, 2008 by Albuquerque police, thanks to a stolen computer loaded with tracking software. The software is called LoJack for Laptops™, developed by Absolute Software. The tracking software told the police exactly where to find the suspects. The police were also able to recover thousands of dollars in other stolen property at the location.

Absolute Software is the leader in Computer Theft Recovery, Data Protection and Secure Asset Tracking™ solutions. It works this way: You install the LoJack for Laptops™ software and register it at the LoJack website. If the laptop is stolen, you notify your local police and notify the LoJack Recovery Team. The next time your computer is connected to the Internet, the laptop secretly notifies the Monitoring Center of its whereabouts. The Recovery Team can track its location, and provide police with the information they will need to get a search warrant and recover your laptop.

Pricing for LoJack for Laptops™ starts at only $39.99 per year.

If you want protect your laptop so you can get it back after it’s been stolen, check out: Click Here for LojackForLaptops

They boast of a 90% recovery rate for stolen laptops.

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