Home Insurance and Coverage for Electronics
You buy homeowners insurance in order to protect your property and possessions against the ramifications of unexpected accidents. Still, it’s important that you buy enough coverage to represent the full value of your dwelling and possessions. Since this value will vary from homeowner to homeowner, it’s imperative that you work closely with your agent to determine how precisely to structure your benefits.
Your possessions coverage is designed to help you repair or replace belongings damaged in unforeseeable incidents. It can insure any number of belongings, including your personal electronics. However, when it comes to high-value electronics, there might still be limitations to what assistance your plan will provide.
To determine whether your plan will cover your electronics, keep the following question in mind when setting up your coverage.
Is The Incident A Covered Peril?
Homeowners insurance covers most types of unexpected, unavoidable household accidents. For example, if a fire occurs, or if someone breaks in and steals your TV, then your homeowners insurance can cover the loss of or damage to your belongings. However, if you simply push your TV and it breaks, then you won’t have coverage at all. Therefore, if you could have done anything to reasonably prevent the accident, then your plan might not cover the damage.
What Electronics Can Receive Coverage
As long as you can prove you owned a lost or damaged possession, then your homeowners insurance will cover that item. Still, there might be limitations to the amount of compensation you can receive on the items in question.
For example, you might have a total limit of possessions coverage set at $50,000. However, within that $50,000, there might be a sublimit of $5,000 for all possessions losses. Therefore, if $6,000 worth of electronics get damaged in a house fire, your plan will only pay up to $5,000, leaving a $1,000 deficit.
Furthermore, your insurer might only base your compensation for an electronics claim based on the item’s actual cash value (ACV) at the time of the loss. This is an item’s used value, rather than it’s like-new value. Coupled with the electronics sublimits that your policy might present, the settlement that you might receive might actually be much less than the actual value needed to replace those belongings. To increase coverage, however, consider upgrading your ACV policy to a replacement cost value (RCV) plan.
If you have an item of high worth, you may be able to protect it with an endorsement on that item. For example, you can insure that laptop on your home insurance policy as an add-on or endorsement. This helps the agency to know of the value and helps protect your valuables that are worth more than the limits of the plan.