Updated: October 2016
You may take your personal computer for granted, whether you're using it to stream movies in your apartment or stay connected with friends and relatives. But what happens if that computer is stolen or destroyed? In many instances, renters insurance may help protect your computer.
Renters insurance policies typically include personal property coverage, which is designed to help protect your belongings, such as a computer, against potential risks.
First, it's important to understand how renters insurance covers your belongings. Renters insurance generally provides protection against certain risks, often described as "perils" in a policy. For instance, renters insurance may provide coverage for your computer if it's stolen or ruined in a fire. You'll likely find, however, that there are certain scenarios in which renters insurance won't protect your computer. For instance, your computer probably won't be covered if it breaks down or is damaged when it's knocked off your desk.
It's also a good idea to understand how much coverage your renters insurance policy provides for your computer (as well as your other belongings).
The personal property coverage limit stated in your policy is the maximum amount your renters insurance will pay out after a covered loss. But you'll also want to know what type of personal property coverage you have. The National Association of Insurance Commissioners says you'll usually find you have two options: actual cash value or replacement cost coverage. Here's a look at how each one works:
- Actual cash value coverage: This kind of personal property coverage takes depreciation into account. Suppose you purchased your computer for $1,000 a few years ago. If it were stolen today, a policy with actual cash value coverage would typically reimburse you for the current value of the computer.
- Replacement cost coverage: This type of coverage helps protect your belongings without factoring in depreciation. Instead, it typically helps cover the cost of replacing an item with one of a similar make and model. So, when it comes to your computer, a policy with replacement cost coverage may reimburse you enough to purchase a similar one in today's dollars.
Some policies offer limited coverage for expensive electronics. Your agent can explain how much coverage your renters insurance policy provides for a computer. You may have the option of purchasing additional coverage for your computer if you want more protection than your standard policy provides.
It's also important to keep in mind that you'll typically need to pay your deductible before your insurance will cover a loss.
When you buy a computer, having it stolen or damaged may be the furthest thing on your mind. But putting certain protections in place now may provide a safety net for your computer and give you the peace of mind that comes with knowing you have renters insurance in place to help protect your belongings, just in case.