Insuring Your Electronic Devices: Is Your Homeowner’s Insurance Enough?

The average US household contains 11 connected devices, including seven items with screens (e.g. smartphones, tablets and TVs). The gradual rollout of 5G is expected to prompt an increase in connected device ownership in the home, in the car, and in the form of wearable technology, making it more important than ever for homeowners to consider their insurance options and make sure all their gadgets are covered. So what is gadget insurance, and do you need it?

What is already covered by your homeowner’s insurance?

Also known as electronics insurance, gadget insurance protects your mobile devices when home insurance does not. Many home insurance policies do cover electrical items in the home. Sometimes this is limited to electrical outlets, electrical panels, interior wiring and other electrical systems integral to the running of the home, and sometimes more items are included. In either situation, additional coverage can often be added to a basic plan to cover items that are not covered in the original policy. However, the limitation of home insurance when it comes to gadgets is that it won’t pay for devices when they have simply stopped working or have been damaged by accident.

Most home insurance plans will pay for damaged electronics if they’re damaged in a disaster (such as a fire or flood) or stolen. Portable devices like laptops, smartphones and tablets are generally only covered up to a value of $1,500 unless you pay for additional coverage. Without replacement cost coverage, stolen or damaged gadgets will only be covered up to their current value, and therefore payouts will not be enough to cover the cost of new devices. Although some home insurance policies cover damage resulting from a lightning-induced power surge, many won’t pay for damage caused by a power surge prompted by any other event.

When to consider gadget insurance

The first step in ensuring that all your electrical devices are protected is checking the coverage offered by your current home insurance policy and finding out what additional add-ons are available. It is also worth considering what items you have that are often taken outside of the home. The more items like this you have, the less likely it is that your home insurance will be sufficient.

If it is not possible to protect all your devices, the best solution is gadget insurance, and this will cover your tech in the event that you damage it by accident — such as by dropping your devices or spilling something on them. All your devices will initially be covered by the manufacturer’s warranty, but this usually only applies for the first year, and doesn’t normally include accidental damage. Gadget insurance, however, will.

Gadget insurance typically covers theft and accidental damage, water damage, mechanical breakdown, unauthorized call cover, extended warranty cover, and international cover. The latter essentially functions as travel insurance for your electronic devices, and will protect them when you’re traveling in other countries. However, if you’re a frequent traveler, it’s worth checking the territories this type of cover extends to, as many policies do have limitations. Most policies offer a 48 hour replacement option, so if your devices are integral to your work, it’s worth checking for this too. When considering any gadget insurance policy, consider the elements that are most relevant to your situation, and cross-reference the policies with your home insurance plan to be sure that you’re adequately covered.

The limitations of gadget insurance

While gadget insurance is typically quite comprehensive, most policies have some exclusions. For example, your devices may only be covered in the first three years of their lifespan, and you may not be able to make claims for older gadgets. Many providers also exclude wear and tear, and there may be limitations on other types of claims. For example, while some policies protect against loss, there may be stipulations about how the loss occurred — a phone stolen from the back seat of your car where it was clearly visible, for instance, may not be covered, but a phone left in the glove compartment may be.

For claims against theft, your policy may require you to prove forced entry to your home, and claims may have a time limitation attached to them. This works the other way too: often claims can’t be made within the first 14 days after the damage occurred. Devices that are still under their original warranty are not usually covered by gadget insurance, but most policies require you to provide proof of purchase, no matter when you bought them.

If you have multiple electronic devices in your home, gadget insurance is usually worth it, particularly if you often travel with your laptop, tablet or smartphone. However, as home insurance policies do cover a certain amount, it’s worth checking what your policy offers before investing in gadget insurance.