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Release date December 1, 2007
HOLIDAY SHOPPERS MISINFORMED ON
INSURANCE COVERAGE
FOR HIGH-TECH GIFTS
New survey finds 96 million households
lack key knowledge on protecting electronics
[Fredericksburg, Texas December
2007]––As the holiday shopping season unofficially kicks off
this week, about 42 million American households plan to give
or receive high-tech electronic products this year. However,
about seven out of eight households don't fully understand
key aspects of their insurance coverage for these purchases,
according to a new national survey by Trusted Choice® and
the Independent Insurance Agents & Brokers of America (the
Big “I”).
For the survey, respondents were asked
if they were going to purchase or receive electronics,
including iPods and iPhones, video gaming systems, computers
and plasma televisions, during this holiday season. In
addition, when asked, only about one fifth of survey
respondents reported ever contacting their insurance agent
with questions on coverage for high-tech electronic products
when they purchased them in the past.
“With so many people giving and
receiving electronics this holiday season, it is important
for consumers to understand how to protect these gifts,”
says agency spokesperson Julie Kothe, Vice President of the
Frantzen Kaderli & Klier Ins Agency, Inc. Agency in
Fredericksburg, a Trusted Choice® agency. “In fact, any time
people acquire an expensive or unusual item, we advise they
consult with their Trusted Choice® independent insurance
agent. This new research shows us not enough consumers are
doing that.”
The survey also presented respondents
with five questions about insurance coverage for high-tech
home electronics. An overwhelming seven out of eight
households (96 million) answered at least one of these
questions incorrectly.
“As our research shows so frequently, most consumers don't
fully understand their insurance policies,” says Kothe.
“Making matters worse, with the ever-changing technology of
these types of electronics, consumers need to keep in mind
that policies may not always reflect the latest features.”
The good news for consumers is that
most electronic gadgets are typically covered under the
standard homeowners or renters policy. However, there are
some common and important exceptions that many consumers
don't understand. Look out for coverage limitations and
exclusions in these situations:
-
Digitally-
downloaded data: These are not generally covered
under the usual homeowners or renters policy. Consumers
need to think about the value of their iTunes,
downloads, and other data, as well as the time it would
take to recover that material. Even in cases of fire,
windstorms, and theft, when your computer is covered,
downloads are not usually included. Although a few
companies now offer some coverage for digital data, that
coverage is limited and may not allow for full
replacement or re-creation of digital material.
Consumers should consult an independent agent to find
out what insurance options and protection they have.
Trusted Choice® independent agents suggest backing up
information to multiple locations or to a portable
storage device to secure and safeguard that material
against any disaster.
-
Electrical
power surges: According to the new survey, more
than half (55%) of Americans mistakenly believe that
their insurance coverage would protect their electronics
in the event of an electrical power surge. However, the
vast majority of renters and homeowners policies exclude
sudden loss or damage to electronics from changes in
artificially generated electrical current. Ask your
Trusted Choice® independent agent about insurance
options including specialty electronics policy and
whenever possible, use a surge protector or invest in an
uninterruptible power supply (UPS) to protect against
power surges or outages resulting from them.
-
Know your
deductible: For most standard homeowners and
renters policies, the usual deductible is higher than
the cost of many single electronic gadgets. For example,
if your iPod, cell phone, or portable gaming system is
stolen, the replacement cost might not meet your
deductible. About 52% of survey respondents were
incorrect by thinking they could usually rely on their
insurance policy to recoup this type of loss. Talk to
your agent and discuss the proper deductible for your
individual circumstances. A Trusted Choice® agent can
help you understand how changing your deductible affects
your insurance premium and what the best choice is for
you.
-
Examine your
exclusions and know your perils: Although
electronics gear is typically covered under a homeowners
or renters policy, the same exclusions apply to these
items as to the rest of your policy. Your electronics
will not be covered in cases of flood, earthquake,
mudslides, and some other specific disasters or
circumstances. For example, if your new plasma TV falls
off the wall because you hung it improperly, or if you
drop your new computer while carrying it into your home,
you are probably not covered. In addition, before making
a particularly large electronics purchase, consult your
Trusted Choice® independent insurance agent to determine
if you need a special policy.
-
Business use:
Homeowners and renters polices were designed for just
that-- homeowners and renters use. Coverage for
computers and other electronic items used for business
in the home is often very limited (usually $2500 on
premises and $250 for items outside of the home).
Discuss purchasing an in-home business policy with your
Trusted Choice® agent to make sure that you have the
protection you need for any electronics you use for
business purposes.
-
Gift cards:
Holiday shoppers nervous about giving electronics that
could be an insurance risk may choose gift cards instead
for their friends and loved ones. They should be aware,
though, that most homeowners and renters policies treat
gift cards the same as cash, reimbursing just $200 in
total, no matter how many cards you may have had lost or
stolen. Be sure and save all receipts and find out the
store's own policy for lost or stolen cards at the time
of purchase.
A Trusted Choice® agent can explain
complicated insurance policies and discuss with you other
ways you can keep your electronics and data safe.
Frantzen Kaderli & Klier Ins Agency, Inc. Agency is a local
Trusted Choice® agency that represents multiple insurance
companies, so it offers you a variety of personal and
business coverage choices and can customize an insurance
plan to meet your specialized needs. You can visit Frantzen Kaderli & Klier Ins Agency, Inc. Agency online at
www.frantzen-insurance.com or call it at 830-997-9531.
The survey was conducted for Trusted Choice® via telephone
by TRC, an independent research company in Fort Washington,
Pa. Interviews were conducted during October 2007 among a
nationally representative sample of 750 households. The
margin of error is +/- 3.7 percentage points at the 95%
confidence level. More information about TRC can be obtained
at www.trchome.com.
Frantzen Kaderli & Klier Ins Agency, Inc.
108 Theodore Specht Drive
P.O. Box 513
Fredericksburg, Texas 78624
Hours: Weekdays, 8:00 a.m. to 5:00 p.m.
Saturdays from 8:00 to 12 noon
Excluding holidays
Phone: 830-997-9531
Toll Free: 1-800-280-9531
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