Protect your Personal Computer

Do you own a personal computer? Protect your investment with the proper insurance.

A growing number of people are purchasing personal computers. For many, this is a major investment trailing only behind buying a home and car in terms of expense. It is important to know how to insure your computer, says the Insurance Information Institute (I.I.I.). Coverage for computers and related accessories such as software and modems can vary from company to company, so it is very important to call your insurance professional for guidance.

Coverage Under a Homeowners or Renters Policy
If you have a homeowners or renters policy, your personal computer would be covered, in the home, against all of the basic disasters listed in the policy. So, if your computer is stolen or destroyed in a fire, you would be covered.

Some companies, however, have dollar limits for electronic equipment. This means your computer; printer and related items would be covered only for the amount (usually $5,000) listed in your policy. If you need additional coverage, you can usually raise the limits.

Replacement Cost Versus Actual Cash Value
Consider getting a replacement cost rather than an actual cash value policy for your personal belongings. Replacement cost insurance would reimburse you for the current cost of your computer and other personal possessions, while an actual cash value policy would pay the depreciated cost. Replacement cost insurance is approximately 10 percent more expensive than an actual cash value policy, but since most items depreciate quickly this can be a very smart investment.

Coverage for Your Computer Away from Home
If you plan to regularly take your laptop or portable computer out of your home, find out how much coverage you have on your homeowners or renters policy for your personal possessions away from home. Some insurers offer complete coverage for possessions away from home. Other companies have a dollar limit for personal possessions that are stolen away from home. In most instances it would be 10 percent of your personal possessions coverage. This means that if you have $40,000 worth of coverage for your personal belongings, you would have $4,000 worth of theft protection away from home.

Consider getting a floater on your homeowners or renters policy, for your portable computer. This policy would cover your computer for its full value anywhere in the world on an all-risk basis.

Get a special computer policy
There are a number of companies that offer individual insurance policies for computers. They have a number of different insurance plans and you would not need an underlying homeowners/renters policy.

When you purchase a computer, it is very important to keep the receipt. Also, remember to keep receipts for related items such as CD ROMs, software, additional memory and other items computer aficionado's buy over time. This information should be kept in a safe place, along with your inventory of personal items and insurance papers.