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Laptop Insurance: Choices and Options

A laptop is probably one of the most vulnerable pieces of equipment one owns today. Its very function (i.e. mobility) makes it more liable to fall, get stolen or damaged in multitude of ways (e.g. common place spills of coffee on a busy office table). A casual look at a property crimes log for any metro reveals that laptops are unfortunately one of the highest stolen type of items. According to Safeware (a laptop insurance company) a laptop is stolen every 53 seconds!

Given the importance and relatively high cost of owning a laptop, considering to buy insurance on a laptop is important for almost any laptop owner. One key point to note here is that manufacturer warranties (even extended ones) do not cover accidental damage to a laptop or a stolen laptop. So, what are the choices and trade-offs to consider while looking for a laptop insurance:

All of the common insurance considerations for any other type of insurance (e.g. auto, home etc.) apply to laptop insurance as well. First thing to consider is whether the overall cost of buying and maintaining an insurance for your laptop is worth it. Besides the insurance premium, there is additional cost of maintaining the paperwork, renewal etc. Of course, there is the usual trade-off of up-front cost of insurance vs. the deductible at the time of the claim and the maximum amount of coverage. How accident prone are you when it comes to your laptop? Do you use your laptop on a cluttered desk, where you also drink your coffee? Do you have pets or kids running around your house?

Accidental damage is the most common cause of a laptop loss. In almost all insurance policies the coverage of the loss will be restricted to cost of replacement of the hardware and software. The policies will typically not cover the loss of work and productivity. Of course, intangibles like family pictures can never be covered (there the best insurance policy is having a regular and disciplined backup process). Some kinds of losses may fall into grey area between warranty and insurance. E.g. if your laptop is damaged due to a power surge. "Soft vandalism" like viruses, worms, or network based security breaches resulting in loss of data or usability are not covered by common laptop insurance policies (again there the best insurance policy is to invest time and money in security products and processes).

Some retailers such as Staples and Office Depot offer accidental damage coverage on laptops. Dell's "CompleteCare Accidental Damage Service" is an add-on service to protect against some kinds of unforeseen mishaps. Please note following caveats in this service: CompleteCare service excludes theft, loss, and damage due to fire or intentional damage. CompleteCare does not apply to accessories.

You need to pay careful attention to what kind of incidents of stolen laptops are covered by a particular insurance policy. E.g. some policies may not cover situations which are deemed to happen because of your negligence (e.g. if you left the car door unlocked with laptop bag in clear view in the back seat). You will need to talk to your insurance agent about coverage of peripherals. E.g. if you carry a wireless card, a bluetooth adaptor, and a Skype enabled headset with your laptop, you should check whether they are covered. Some insurance policies may have restrictions on mode of usage which may or may not apply to you, E.g. they may restrict mouting of the laptop in a car.

It is good idea to consider how the claim process for your insurance would work. What kind of paperwork would be needed. Most likely you would have provided an invoice and the serial number of the laptop at the time of the purchase. If you do buy the insurance it would be a good idea to keep the invoice of the laptop, its serial number, and a photo of the laptop in a safe place. How will your insurer do the the valuation of your laptop at the time of the loss? Will the focus be quickly replacing your laptop with a laptop with equivalent or higher specs, Or will you be paid the devalued marked price of the laptop at that point of time?

If you are interested in covering your laptop only while on travel, you can consider purchasing insurance for your laptop as part of your travel insurance.

Another consideration is correlation of your laptop insurance policy with other insurance policies that you may have. E.g. your home or business insurance may cover stolen laptops and some kinds of accidental damage. But neither of these may cover your laptop if it got stolen while on a vacation. Go through various scenarios based on your usage of the laptop, and see what conditions are covered by your existing policies. If instead of buying the laptop, you had chosen a laptop lease option, your leasing vendor may have specific requirements for insurance (in some cases they may bundle the insurance as part of the lease contract).

An alternative approach (to protect against stolen laptops) is to invest in laptop location monitoring software e.g. the LoJack software (from Absolute Software). This kind of software runs in the background, and if a stolen laptop is connected to the internet, sends information about its location.

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