Electronic devices are part of our daily lives. From televisions to personal computers to tablets and smartphones, these digital tools play a critical role in work, play, and everything in between. According to recent data, 85% of Americans — or around 280 million people — now own smartphones.
But what happens when they break? Given how much and how often we use these devices, damage and breakage are common concerns. Beyond the frustration that comes with the loss of use, however, is the cost of repair or replacement. Depending on the device’s type and age and the damage’s extent, you could find yourself paying hundreds (or thousands) of dollars for a fix.
Electronics insurance may help cover the cost if it’s part of your policy, or you can get it as an add-on. Discover what electronics insurance is, what it covers, how it works, what it costs, and when it makes sense to consider purchasing this policy option.
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What Is Electronics Insurance?
Electronics insurance is add-on insurance coverage for home or renters insurance that provides additional insurance for electronic devices. This coverage typically protects devices in your home and your person up to the maximum amount listed in the policy.
For example, electronics insurance may cover the cost if your children are playing and crash into your television. If you’re running errands and trip getting out of the car, smashing your phone on the ground in the process, electronics insurance can help pay for repair or replacement.
What Is Covered in Electronics Insurance?
As add-on coverage to home and renter’s policies, what’s covered by electronics insurance depends on your insurance provider.
Electronics insurance typically covers:
- Personal Computers
- Mobile Phones
- Video Game Consoles
Other consumer electronics, such as music recording or video editing equipment, may also be covered.
Electronics insurance often covers accidental damage, such as water spilled on your phone or a laptop dropped down the stairs. Electronics insurance may also provide coverage if your device stops working because of an unexpected defect or wear and tear.
What Is Not Covered in Electronics Insurance?
In some cases, electronic insurance may not cover loss or damage.
For example, if you intentionally damage or break a device to obtain an insurance payout, coverage won’t apply — and you could face accusations of insurance fraud. It’s also worth noting that electronics purchased and used for business purposes, whether at home or work, may not be covered under personal electronics insurance. Instead, you may need business-specific electronic insurance for these devices.
Are Electronics Covered in Standard Home and Renters Insurance Policies?
Home and renters insurance protects the property in your home under Coverage C, also known as personal property coverage. This includes furniture, appliances, jewelry, clothing, and other personal effects, including electronic devices. Both electronics and renters/homeowners insurance cover the same items, but they do so under different circumstances.
Electronics insurance protects against accidental issues due to drops, falls, or liquid damage. In contrast, home and renters insurance only provides coverage for named perils. These perils are listed in your insurance policy and include theft, loss, or damage due to fires or lightning. In other words, while electronics insurance protects you against general accidents or misuse, standard home and rental insurance protects you against specific perils.
Imagine taking your phone to the bathroom and accidentally knocking it into the sink, causing water damage. Despite your best efforts to dry it out, the device stops working. In this case, electronics insurance applies: You accidentally damaged your phone, so you can claim coverage and likely have your phone repaired or replaced.
It’s also worth noting that, under standard homeowners or renters insurance, your deductible would apply to any claim on an electronic device. Since these deductibles may be $1,000 or more, your coverage may not help you recover a damaged device. Under electronic insurance, however, you may have a separate deductible or none at all.
Warranty Coverage vs. Insurance Coverage
Electronic devices may come with manufacturer’s warranty coverage for a set amount of time, such as 1 or 2 years, starting from the date of purchase. Unlike insurance coverage, warranty coverage activates automatically when you purchase a device and remains in force until it expires.
While electronics insurance covers accidental damage and home insurance covers device loss, warranty coverage may only apply to mechanical failures, software issues, or device faults that the owner does not cause. If your device suddenly stops working because of a faulty internal part and is still under warranty, the manufacturer may replace the device at no cost. If you damage the device by leaving it in a hot car, the warranty will not apply.
You may also obtain extended warranty coverage by paying extra at the time of purchase. Some credit card companies even offer an extra year of warranty protection plans if you buy the device using their card. Others may offer to extend the warranty if you use their card to pay for associated device expenses, such as mobile phone bills. However, extended warranties often come with the same limitations as standard warranties. While they cover device hardware or software failures, there is usually no coverage for loss, theft, or damage.
How Does Insurance for Electronics Work?
Electronics insurance works the same way as other types of insurance. You purchase a policy from an insurance provider specifying the coverage amount, what devices are covered, and when coverage applies. Policies come with a monthly premium and a deductible paid each time you submit a claim.
If your provider offers it, electronics insurance may be added to your existing home or renters insurance policy. This new policy may increase your premium and have a separate deductible from other claim types. In addition, some states permit the sale of portable electronics insurance as a stand-alone product.
Depending on the type of coverage you purchase, it may apply to individual devices or all device types in your home. Sometimes, there may also be a waiting period between purchasing coverage and its activation.
How Much Does It Cost to Insure Electronics?
The cost of insuring electronics depends on the device’s value and the length of coverage purchased. Higher-value devices cost more to replace and, therefore, more to insure. Longer coverage terms, meanwhile, increase the likelihood of a claim, increasing the total cost.
Insurance providers may opt for a one-time payment or a monthly premium along with a deductible, so review the details of any policy you’re considering.
Should You Consider Insuring Your Electronics?
The case for purchasing electronics insurance coverage depends on the type of devices you own, their value, and their cost to replace.
Consider an insurance policy on a current-generation smartphone that costs $400 for five years of coverage and has a replacement deductible of $100. If your smartphone breaks during this term and costs $500 to replace, you break even, meaning it may not be worth the cost.
If you own many expensive electronic devices — perhaps a home music or video recording studio — the costs of replacing or repairing these devices could be substantial. In this case, purchasing electronics insurance may provide protection and peace of mind.
It’s also worth considering whether you have the cash to pay for an expensive device if it’s accidentally damaged or broken. If breaking a device means you might wait weeks or months, saving the money to repair it, it may make sense to invest in the smaller deductibles and monthly payments of electronics insurance.
How to File an Electronics Insurance Claim
The process for filing an electronics insurance claim depends on your insurance provider and the type of policy purchased.
Contact your home or renters insurance provider to start the claims process if your electronics insurance is an add-on policy. The insurer may ask for information about the type of device damaged, how the damage occurred, and if the device can be repaired. You may need to submit pictures and proof-of-purchase documentation as part of the claims process. If approved, you pay your electronics insurance deductible and take your device for repair or replacement at an insurance-approved retailer.
If your insurance is a stand-alone product, contact your electronics insurance provider directly and provide all relevant details to start the process.