You probably cannot do without your household’s technology systems, especially when everyone is staying socially distant this year. These might be computer systems, smart-home electronics, TVs, stereo system and even computer-driven appliances. They are probably instrumental in helping you stay connected to the world.
While you might assume that your home insurance will cover your electronics, you can’t do so with 100% certainty. There are various limitations that might apply to your plan, and in some cases you might be able to better benefit from the perks of a warranty on certain items. Here’s how to distinguish between the benefits of the two.
When does home insurance cover electronics?
Your home insurance will cover your possessions against unexpected or unavoidable losses, such as fires, theft, vandalism or weather damage.
However, these plans might pay only in limited circumstances:
- Some plans will set a sub-limit on high-value electronics. For example, if you have $50,000 in total contents coverage, your plan might only pay up to $5,000 for all electronic damage.
- Policies might exclude exceptionally expensive items such as high-end computers.
- If damage to your electronics costs less than the deductible value of your contents coverage, then your plan will not pay.
- Some homeowners policies will only pay for a damaged electronic item based on its actual cash value (ACV). This is the used value of an item, rather than its like-new value.
- Your plan will not pay for damage to these items from normal wear & tear. Therefore, it’s still important to perform routine maintenance on these items.
Your plan also will not cover most business equipment housed within your home. Therefore, if you run a home-based business, you will likely have to buy expanded coverage on the item.
Getting Expanded Coverage for Your Electronics
We understand that it is often concerning if you feel you don’t have appropriate insurance for your electronics. Therefore, it’s important to work with your home insurance agent to increase your coverage options to offer you optimized benefits.
- If you want to receive compensation for more than an item’s actual cash value, then ask your agent to include replacement cost value coverage on your policy. This coverage can pay for an item based on its like-new value.
- Should you want to insure a particularly expensive item, consider buying a scheduled item rider on the policy. This coverage will specifically insure an expensive item with its own coverage limit and settlement terms.
- Always choose a deductible that you can afford to pay so that you don’t have to cover an expensive loss out of your own pocket.
For routine repairs or unique replacement scenarios, consider buying a warranty or protection plan on the item in question. This plan might help you repair a damaged item or replace it as long as the item is under warranty. However, warranties do not replace contents insurance, so will still have to maintain coverage even with other protection in place. If you have further questions, feel free to contact our team of dedicated agents at (323) 563-6146.