Renter's Insurance for Home Electronics

Renter's Insurance for Home Electronics

Gregory Han
Sep 26, 2008

What's the worst thing that has happened to your home electronic equipment? Robbery? Pet knock over your flat panel? Hopefully nothing as devastating as a fire. The worst we've had happen is accidentally spilling water across our keyboard (it sadly didn't work after drying out). Nevertheless we think a smart precautionary measure for all of us paying a monthly due amount to a landlord in these wired times is the fairly affordable renters insurance...

After reviewing a few of the major insurance companies sites, we've found that the average annual cost for renter's insurance is less than $200 a year for around $30,000 in coverage for accidents/emergencies such as fire, smoke damage, theft (generally includes items stolen from your car), collapse of the building due to weather, water leakage or overflow, freezing of plumbing, air conditioning and even other people's injuries or damages in situations happening at your home.

HO4 policy, as renter's insurance is formerly known, normally covers home electronics such as TV, stereos, gaming systems, alongside appliances great and small. Some companies require an additional fee to cover home computers, so be sure to read the fine print before signing up.

And here's an important note to remember when looking at different companies' policies, according to

One thing to look at is whether the insurance company will offer "actual cash value" (ACV) or "replacement cost coverage" for your belongings. As the name implies, ACV coverage will pay only for what your property was worth at the time it was damaged or stolen. So, if you bought a television five years ago for $500, it would be worth significantly less today. While you'd still need to spend about $500 for a new TV, your insurance company will pay only for what the old one was worth, minus your deductible.

Replacement cost coverage, on the other hand, will pay what it actually costs to replace the items you lost, again minus the deductible. In some regions, most insurers write ACV coverage. In others, they'll quote you replacement cost coverage by default. Replacement cost coverage will cost you more in premiums, but it will also pay out more if you ever need to file a claim. Let your agent know about any particularly valuable items you have. Jewelry, antiques and electronics might be covered only up to an amount that won't pay for their replacement.

Considering the amount of home tech items the average person has these days, what comes down to the equivalent price of a Xbox 360 seems fair enough for a piece of mind. For more details about the general information of renter's insurance, read here.

[Creative Commons Image: velkr0]

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