Modern gadgets outstrip insurers

by James Coney

Last updated at 10:45 28 February 2007


The fast pace of technology is outstripping insurance contracts, leaving many valuable possessions uninsured.

The rapid development of MP3 players, laptops, iPods, mobile phones, cameras and all the information stored on them has moved so quickly that many insurance companies are struggling to keep up.

As a result, those that lose such items or have them stolen find the most expensive part of the possession — the information stored on them, such as downloaded music and photographs — is not covered.

Home Office figures show the growth in personal electronics has accounted for an 8 pc increase in street robberies and muggings in the past year.

Teenagers could lose out the most because, on average, they walk around with more than £700 of gadgets, clothing and jewellery, with one in three regularly losing or having these possessions stolen, according to insurers Cornhill Direct.

This does not include laptops, cameras and hand-held games that youngsters carry around.

The Association of British With-profit youngsters carry around.

The Association of British Insurers says one in seven of us believe we are not covered at all, so never claim. Gadgets might be covered even if the information stored on them is not.

AA head of insurance Gerry Barrett says: 'It is worth checking to make sure your home insurance covers equipment outside the home and, if not, buy the extended cover.' The problem with making a claim often comes with the wording of the insurance contract. For example, some will turn down your claim if the stolen item was on view in a public place.

Emma Parker, a spokesman for the independent complaints watchdog Financial Ombudsman Service, says: 'You have to be able to use the item, otherwise what is the point in having an insurers profit savers insurance contract if there are so many exclusions you cannot make a claim?

'However, if your phone gets stolen when you leave it on a table to go to the toilet, you have not taken enough care.'

Some companies will insure you for information contained on an iPod or MP3, others will not. It will depend on whether they view the songs stored as software or data — and this is often not made clear in the policy. If they are classed as data you will often not be covered.

Other insurers place a limit on the value of downloads you can claim. It will not matter how the information is classified, but whether you have suffered a financial loss.

To make sure the items are covered outside the home, you insurers savers need to go for 'all risks' cover and clarify whether information held on your gadget is included.

Esure covers personal possessions away from the home only if you have asked for it in addition to regular home contents insurance.

Individual items over £1,500 must be specified on the policy.

With Halifax, the basic level of cover is £2,500, but you can increase this to £10,000. There is a single item maximum of £2,000, and limits of £500 each on money, credit cards and mobile phones.

Direct Line will not cover music downloaded on to an iPod because it should still exist on the home computer.

For tips on how to beat the thieves, visit www.cornhilldirect crimeprevention.co.uk.

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