Gadget Insurance Guide For Smartphones, Tablets And Other Devices

By JUAN CASTILLO

What would we do without our smartphones, tablets and laptops? They’re essential tools tethered to our daily lives. Without them, our productivity would grind to a standstill.

Mobile devices are pricey, however, and the cost of replacing these and other expensive personal electronics and tech items can hit your pocketbook hard. This is where electronics insurance and extended warranties can help.

Sometimes called “gadget insurance,” electronics insurance pays for damage to your mobile devices in situations where your homeowners insurance does not, such as when your device simply stops working.

Here’s a guide to understanding what gadget insurance covers, where to get a policy and more.

What homeowners insurance will and won’t cover

Standard homeowners insurance policies will pay to repair or replace electronics along with the rest of your personal belongings if they’re stolen or damaged in fire, disaster or other problem covered by insurance. But limits apply, including:

A homeowners policy won’t pay out if your electronic device stops working or if it’s damaged in an accident, like if you drop it.

Portable electronics, including smartphones, laptops and tablets, are typically covered only up to $1,500 under a standard homeowners policy, according to the Property Casualty Insurers Association of America. You can buy additional coverage.

Unless you have replacement cost coverage, if your electronics are damaged or stolen, your homeowners insurance will only pay for their current value. Usually that won’t be enough to replace them with new items.

A power surge can ruin computers and electronics that are plugged in. Many home insurance policies pay for damage caused by a power surge due to lightning. However, standard homeowners policies exclude computer equipment and electronics if they’re damaged by a home power surge not caused by lightning.

How gadget insurance works

If you’ve ever dropped your smartphone or spilled a drink on your tablet, you know that mobile devices are easily damaged. You also know that mobile devices can be expensive to repair or replace.

Manufacturers’ warranties cover smartphones, laptops and other electronics, but typically only for a year, and they don’t include damage from accidents or power surges. Companies like SquareTrade sell extended warranties.

Gadget insurance, on the other hand, will pay for damage from accidents, spills, theft and other problems.

Where to buy gadget insurance

Your mobile carrier may offer gadget insurance. Stand-alone plans are available from Mobile Rhino, Safeware and Worth Ave. Group.

MOBILE RHINO

Mobile Rhino is a specialty insurer that offers policies for smartphones and tablets that run iOS, the operating system created for Apple products. Apple models that qualify for coverage include:

Smartphones: iPhone 4, iPhone 4s, iPhone 5 (or earlier iPhones in good condition).

Tablets: iPad mini, iPad, iPad 2.

Under the company’s same-device replacement coverage, Mobile Rhino will fix your device, if possible, or replace it with a new one of the same model. Coverage costs $129 a year. The company charges a $99 deductible, the out-of-pocket amount you owe, before coverage kicks in.

Mobile Rhino will repair or replace qualifying devices after any of the following problems:

Breakdown.

Accidental damage or loss.

Theft.

Fire, smoke or internal explosion.

Windstorm, hail, flood, lightning or volcanic eruption.

Riot, vandalism, malicious mischief or civil commotion.

Aircraft and vehicle damage.

Weight of ice, snow or sleet, or freezing.

Damage from falling objects.

Accidental discharge of water or steam, or sudden cracking of a steam or hot water system.

Power surge.

Mobile Rhino does not insure devices against:

Depreciation, neglect or cosmetic damage.

Ordinance or law.

Earth movement.

Nuclear hazard or war.

Viruses.

Programming errors or faulty construction.

Loss of accounts.

Damage incurred while being repaired at a nonauthorized facility.

Mysterious disappearance.

Mobile Rhino also sells coverage in case you or a family member on your policy becomes the victim of identity theft. It also covers certain devices owned by schools, health care facilities and businesses.

SAFEWARE

Safeware is both an insurance agency and a seller of extended warranty and service plans. Known for its coverage of desktop computers, it also offers policies for tablets, smartphones, electronics, appliances and other home products.

Insurance pays out to repair or replace smartphones and other electronics. Policies cover against damage from the following:

Accidental drops, falls and collisions.

Liquid spills.

Theft, burglary and robbery.

Power surge.

Flood, fire and vandalism.

You have up to 60 days after you buy your device to purchase Safeware insurance. Safeware insurance doesn’t replace the manufacturer’s original warranty, which covers mechanical failures and breakdowns.

Safeware also sells extended service plans, which do not cover against theft or lost items. Plans start when you buy your device and provide coverage for problems that the manufacturer’s warranty excludes. Safeware extends the manufacturer’s coverage when the manufacturer’s warranty expires. The amount of coverage you buy is equal to the amount you paid for the item.

WORTH AVE. GROUP

Worth Ave. Group sells insurance for new and used mobile phones and iPhones, iPads and iPods, laptops and Chromebooks, tablets, e-book readers, gaming systems and digital cameras.

You can purchase Worth Ave. coverage for the following:

Damage from liquid spills and submersion.

Theft, burglary and robbery.

Cracked screens and other damage from accidents.

Fire, flood, vandalism, earthquakes and natural disasters.

Power surges caused by lightning.

Mechanical failure and manufacture defect.

But Worth Ave. won’t cover these events:

Nuclear hazards.

Losing or misplacing your item.

War or government seizure and wear and tear.

Theft from an unattended vehicle.

Power surge not caused by lightning.

Dishonest acts and intentional acts.

Corrosion, rust and cosmetic damage.

With Worth Ave. Group, you buy a policy for each electronic item. For example, a one-year policy for a laptop with $1,000 in coverage and no deductible would cost $77. You can choose a deductible up to $100. (Worth Ave. Group also offers renters insurance for college students who live on or off campus or who are studying abroad.)

Worth Ave. Group pays out claims at replacement-cost value with no deduction for depreciation, minus your deductible. The insurance cost won’t rise due to number of claims, the company says. 

This article originally published by NerdWallet.