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Updated December 6th, 2007
Holiday Shoppers Misinformed on
Insurance Coverage for High-Tech Gifts
As the holiday shopping season
unofficially kicks off this week,
about 42 million American households
plan to give or receive hightech
electronic products this year.
However, about seven out of eight
households don’t fully understand
key aspects of their insurance coverage
for these purchases, according
to a new national survey by
Trusted Choice and the
Independent Insurance Agents &
Brokers of America.
For this survey, respondents
were asked if they were going to
purchase or receive electronics,
including iPods and iPhones, video
gaming systems, computers and
plasma televisions, during this holiday
season. In addition, when
asked, only about one-fifth of survey
respondents reported ever contacting
their insurance agent with
questions on coverage for high-tech
electronic products when they purchased
them in the past.
“With so many people giving
and receiving electronics this holiday
season, it is important for consumers
to understand how to protect
these gifts,” said Rick Dinger,
president of Crescenta Valley
Insurance, a Trusted Choice agency.
“In fact, anytime people acquire an
expensive or unusual item, we
advise they consult with their
Trusted Choice independent insurance
agent. This new research
shows us not enough consumers are doing that.”
The survey also presented
respondents with five questions
about insurance coverage for hightech
home electronics. An overwhelming
seven out of eight households
(96 million) answered at least
one of these questions incorrectly.
“As our research shows so frequently,
most consumers don’t fully
understand their insurance policies,”
said Dinger. “Making matters
worse, with the ever-changing technology
of these types of electronics,
consumers need to keep in mind that
policies may not always reflect the
latest features.”
The good news for consumers is
that most electronic gadgets are typically
covered under the standard
homeowners or renters policies.
However, there are some common
and important exceptions that many
consumers don’t understand. Look
out for coverage limitations and
exclusions in these situations:
* Digitally downloaded data:
These are not generally covered
under the usual homeowners or
renters policy. Consumers need to
think about the value of their iTunes,
downloads and other data, as well as
the time it would take to recover that
material. Even in cases of fire,
windstorms and theft, when your
computer is covered, downloads are
not usually included. Although a
few companies now offer some coverage
for digital data, that coverage
is limited and may not allow for full
replacement or re-creation of digital
material. Consumers should consult
an independent agent to find out
what insurance options and protection
they have. Trusted Choice
independent agents suggest backing
up information to multiple locations
or to a portable storage device to
secure and safeguard that material
against any disaster.
* Electrical power surges:
According to the new survey, more
than half (55%) of Americans mistakenly
believe that their insurance
coverage would protect their electronics
in the event of an electrical
power surge. However, the vast
majority of renters and homeowners
policies exclude sudden loss or
damage to electronics from changes
in artificially generated electrical
current. Ask your Trusted Choice
independent agent about insurance
options, including specialty electronics
policy and whenever possible,
use a surge protector or invest in
an uninterruptible power supply
(UPS) to protect against power
surges or outages resulting from
them.
* Know your deductible: For
most standard homeowners and
renters policies, the usual deductible
is higher than the cost of many single
electronic gadgets. For example,
if your iPod, cell phone or portable
gaming system is stolen, the replacement
cost might not meet your
deductible. About 52% of survey
respondents were incorrect by thinking
they could usually rely on their
insurance policy to recoup this type
of loss. Talk to your agent and discuss
the proper deductible for your
individual circumstances. A Trusted
Choice agent can help you understand
how changing your deductible
affects your insurance premium and
what the best choice is for you.
* Examine your exclusions and
know your perils: Although electronics
gear is typically covered under a
homeowners or renters policy, the
same exclusions apply to these items
as to the rest of your policy. Your
electronics will not be covered in
cases of flood, earthquake, mudslides
and some other specific disasters
or circumstances. For example,
if your new plasma TV falls off the
wall because you hung it improperly,
or if you drop your new computer
while carrying it into your home,
you are probably not covered. In
addition, before making a particularly
large electronics purchase, consult
your Trusted Choice independent
insurance agent to determine if you
need a special policy.
* Business use: Homeowners
and renters polices were designed
for just that — homeowners’ and
renters’ use. Coverage for computers
and other electronic items used
for business in the home is often
very limited (usually $2,500 on
premises and $250 for items outside
of the home). Discuss purchasing an
in-home business policy with your
Trusted Choice agent to make sure
that you have the protection you
need for any electronics you use for
business purposes.
* Gift cards: Holiday shoppers
nervous about giving electronics that
could be an insurance risk may
choose gift cards instead for their
friends and loved ones. Crescenta
Valley Insurance is a local Trusted
Choice agency that represents multiple
insurance companies, so it offers
you a variety of personal and business
coverage choices and can customize
an insurance plan to meet
your specialized needs.
For more information about
Crescenta Valley Insurance, call
(818) 248-4500 or visit www.Cvins.com.
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