Holiday Shoppers Misinformed on Insurance Coverage for High-Tech Gifts

Survey finds 96 million households lack key knowledge on protecting electronics.

Last week, as the holiday shopping season kicked off, Trusted Choice® and the Big “I” released the results of their consumer survey regarding insurance coverage on high-tech electronic gifts. The survey found that approximately 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.

“With so many people giving and receiving electronics this holiday season, it is important for consumers to understand how to protect these gifts,” says Big “I” President & CEO Robert Rusbuldt. “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 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. More than 1/3 or 42 million households said they were likely to purchase or receive high-tech electronic products including iPods, iPhones, high-definition/plasma televisions, video game systems and computers. However, only about one-fifth of respondents said they had contacted their insurance agent with questions on coverage for high-tech electronic products when they purchased them in the past.

“As our research shows, so frequently most consumers don’t fully understand their insurance policies,” says Madelyn Flannagan, Big “I” vice president for education and research. “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.”

Respondents also were presented with five statements and were asked whether they agreed or disagreed that the situation was usually covered by most homeowner’s or renter’s insurance coverage. Their collective responses are as follows:

• More than half (60%) believe small electronic products stolen from them, either from their home or automobile – even those valued at less than $500 – are usually covered or don’t know whether they are or not.

• Approximately 55% believe electronic equipment that is damaged or destroyed as a result of a power surge is usually covered.• People are better informed about damage resulting from home installation or loading/unloading in transport. Less than half (42%) said that such damage is usually covered.

• Only about one-third of respondents (35%) think digital downloads such as iTunes or podcasts are usually covered.

• Finally, only one-third (34%) believes gift cards, regardless of their value, are usually covered.

Along with the survey results, the Big “I” provided consumers a series of tips to help them with some common and important exceptions that many do not understand.

For more information or for a copy of the tip sheet to share with your clients, contact Patrick Royal at Patrick.Royal@iiaba.net. Patrick Royal (patrick.royal@iiaba.net) is Big “I” director of public affairs.

If you have questions about your coverage, contact The Howes Insurance Agency.