NU Online News Service, Nov. 30, 2:23 p.m. EST
An estimated 42 million Americans plan to give or receive high-tech electronic products this year, but few know what kind of protection they have for their equipment in a traditional home insurance policy, a survey has found.
The poll was done for Trusted Choice, the independent agent brand developed by Alexandria, Va.-based Independent Insurance Agents & Brokers of America.
According to the findings by TRC, an independent research company based in Fort Washington, Pa., 60 percent of those contacted believe small electronic items, if stolen from their home or auto, are covered by their policies or don’t know if they are.
More than half of the respondents—55 percent—wrongly believe their electronic equipment is covered if it is damaged or destroyed by a power surge.
Forty-two percent believe damage to their property from home installation or loading and/or unloading in transport is covered. Only one-third—35 percent—think their digital downloads, such as iTunes or podcasts, are covered, while 34 percent believe gift cards—regardless of value—are covered.
IIABA points out that while there is coverage for electronic gadgets under a homeowners policy, there are exceptions.
The association points out that:
• Digital downloads are not covered. Some carriers, the IIABA points out, are offering some coverage. The association said agents can suggest to clients that they back up information to multiple locations or purchase a portable storage device to secure and safeguard material against any disaster.
• Sudden loss of an electronic product from a power surge is typically not a covered event. Agents can advise customers to obtain insurance options that include a specialty electronics policy and to use a surge protector or invest in an uninterruptible power supply to protect against an event.
• Agents can advise clients that their deductible would probably be higher than the value of a single electronic gadget. Producers may want to discuss deductibles with their clients and review how that will affect their coverage and price.
• While policies will cover electronic gear, exclusions and perils may apply, such as loss from flood, earthquake or mudslides where coverage is not extended. Also, consumers should know that if that new plasma TV falls off the wall because the customer hung it improperly, it would not be covered.
• Home business equipment has limited coverage under a homeowners or renters policy. Agents can discuss purchasing an in-home business policy with clients for adequate coverage.
• When it comes to gift cards, insurers treat them as loss of cash and reimbursement is limited, usually to $200. Agents can advise consumers to save all receipts and to find out the store’s policy for lost or stolen cards at the time of purchase.
The survey of 750 households was conducted in October and has a margin of error of 3.7 percent.