As a REALTOR®, you know how important it is to back up your files. If you have a crash, you are covered. But what if you have a fire? Or your laptop is stolen? You need to know how to insure your computer, at home and away from home.

According to the National Association of REALTORS®, nearly nine out of ten agents own or lease a computer. If you have a homeowners or renters' policy, your personal computer would be covered in the home, against any disaster outlined in the policy, including fire and theft. But some companies have dollar limits on electronic equipment. This means that regardless of what you paid for your computer, printer and accessories, you are covered only for the amount listed in your policy. If that isn't enough coverage, you can raise the dollar amount by paying a little more on the premium.

Keep in mind that if you are working at home, a typical homeowner's policy provides only $2,500 coverage for business equipment which is not enough to cover all of your business property. You may also need coverage for liability and business interruption. For as little as $14 a year, you can double your standard homeowners policy limits for business equipment from $2,500 to $5,000. You may be able to add an endorsement to your existing homeowner's policy. Some companies have begun offering endorsements that include property and limited business liability coverage.
Editor's note: Endorsements are typically only available for businesses that generate $250,000 or less in annual receipts in most states..

A better idea would be to insure your electronic equipment at replacement cost rather than actual cash value. Replacement cost insurance would reimburse you for the current cost of your computer, while an actual cash value policy would pay only the depreciated cost. Replacement cost insurance is about 10 % more expensive than an actual cash value policy, but since most computers depreciate quickly, you can come out ahead.

You take your laptop with you wherever you go, so you should find out how much coverage you have on your homeowners or renters policy to cover your equipment out of the home. Some insurers offer complete coverage for possessions away from home, while other companies have a dollar limit for items that are stolen, or damaged away from home.

A "floater" on your homeowners or renters policy for your laptop will cover your computer for its full value anywhere in the world and for more risks than are normally covered by your homeowners/renters policy. You can also look into individual insurance policies for computers that do not require an underlying homeowners/renters policy. Ask your insurance agent which is the best way to protect your equipment - an endorsement to your homeowner's policy, an in-home business policy or a small businessowners package policy.

If you should need to make a claim, it will go easier if you have copies of your purchase receipts for your computer, software, and peripherals available. Keep them stored in a safe place.

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Published: July 22, 1999

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