Many people rely on their computers in their personal lives. What used to be viewed as a luxury only used by the select few and technologically savvy has become an essential component of everyday life. Computers are essential to learning, leisure and social interaction. While prices have come down dramatically in recent years, they're not exactly what most people would call cheap—especially if you own a higher-end model. For this reason, it's important that any computers you own are covered under an insurance policy. A renters insurance policy may be able to provide you with the computer insurance you need.
How does it work? It's pretty simple, actually. When you buy a renters insurance policy, you can cover your belongings against potential yet hopefully unlikely events. Perils like fire, theft, certain types of water damage and vandalism are often covered, but so are some random acts of nature like lighting, storms and wind.
Renters insurance doesn't cost a lot. It's true. Considering how much it would cost to replace your computer if it were stolen, damaged or destroyed, renters insurance is actually pretty cheap. Also figured into the equation is the fact that a renters insurance policy doesn't only cover your computer, but can cover other things inside your residence, from TVs to furniture and other personal property that might cost you an arm and a leg to replace. The Insurance Information Institute says that the average cost of renters insurance in 2009 was $184 per year, or just $15 per month. At about 50 cents per day, that's not a bad deal at all.
How much is your computer covered for? It depends on whether you buy an insurance policy that pays the Actual Cash Value or Replacement Cost of your property. Here's a quick breakdown on how they work, and the differences between the two:
- Actual Cash Value coverage is generally the cheaper of the two options when it comes to premiums because it pays you the amount that you would expect to fetch if you sold an item today. Since we're talking computers, say you paid $500 for your computer a few years ago. If you sold it today, online or to a friend, you wouldn't expect to get the full $500. That's because of depreciation. Actual Cash Value works the same way; it's typically replacement cost minus depreciation.
- Replacement Cost coverage is normally a bit more expensive when it comes to premiums, but depending on how much money you spent on your computer and its age, having this type of policy in place could work to your benefit in the event of an unfortunate incident. With Reimbursement Cost coverage, your insurance company often pays the cost to replace your computer with one of the same kind.
Sometimes, there are limits to the amount of reimbursement you can get. Because items like computers can run the gamut in cost, from several hundred dollars to several thousand, an insurer may set a limit to how much you can be reimbursed for the computer. If you only spent a few hundred dollars on your computer and the limit for computers in your renters policy is $1,000, you're in great shape. But, if you sank your savings into getting a top-end, high-performance computer, this limit might not be enough. But, don't worry, you've still got options.
When standard coverage just isn't enough, ask about Scheduled Personal Property coverage. This extra coverage is sometimes also referred to as a "floater," and it comes into play for personal possessions that are of higher value. In this case, you can elect to raise the coverage on your computer so that in the event it's stolen, damaged or destroyed, you can be adequately reimbursed for the loss.
Where to start your search. If you already have an auto insurance policy and you're happy with the service that you're getting from your insurer, pick up the phone and give them a call. Ask what your options are for buying a renters policy. Many car insurance providers also offer homeowners and renters insurance, and the best part is that you could probably save yourself some money with multi-policy discounts.
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