If you rent your home, renters insurance is the best way to protect yourself, not only from liability, but from having to replace your stuff in case it gets stolen or destroyed. For many people, your computer is one of the most expensive – and essential – things you own, and it makes sense to check whether renters insurance covers it. You want renters insurance because you want to protect your stuff, but does your stuff include your computer? The answer to that is…it depends.
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In order to understand whether renters insurance covers your computer, you need to understand what renters insurance covers generally. A renters insurance policy offers several types of coverage to people who rent their homes. There is:
Note that renters insurance doesn’t cover everything; your policy will list out which perils, or circumstances, are covered, and events like earthquakes and flooding requires separate, specialized coverage. Learn more about what renters insurance does and doesn’t cover.
When you buy a renters insurance policy, you choose how much coverage to buy based on how much you own, how much you can afford to pay out of pocket in the event of damage, and how much risk you’re willing to take on.
Your renters insurance coverage limits may determine whether your renters insurance fully covers your computer or only reimburses you for part of it. But even if you have $25,000 in personal property coverage through your renters insurance, that doesn’t mean you get a check for $25,000 if your apartment burns down. You have to file a claim detailing the items you lost, and the type of policy you have will determine how the insurance company will reimburse you.
Replacement cost value (RCV) is the cost of a new item. Replacement cost renters insurance, also known as replacement cost coverage, is renters insurance in which the insurer that pays the amount it would cost to purchase the same or similar item (minus your deductibile).
Actual cash value (ACV) is the depreciated value of the item. Actual cash value renters insurance is renters insurance in which the insurer pays the amount you originally paid for or the amount it minus its depreciation (minus your deductible).
Both types of policies technically cover your laptop, but the replacement cost value policy would pay you the cost of a new laptop, while an actual cash value policy would pay you whatever your laptop was worth at the time it was destroyed. Because of this, RCV policies are usually more expensive.
Another aspect of your renters insurance policy that can affect how much you get for your laptop is the renters insurance category limits, also called limits of liability. Each policy has several category limits within the personal property coverage limit, and not knowing yours could lead to a big surprise in the event of a claim. Typical renters insurance category limits include electronics and jewelry. The amounts vary by policy but are generally between $1,500 to $2,500 per policy.
Your electronics coverage limit might pay to replace your laptop, but if you have other expensive electronics or more than one laptop, the coverage limit may not be enough. In that case, you can purchase something called a rider, endorsement, or floater to cover your computer specifically. Riders are purchased after your policy is already in force, or active, not when you’re applying for coverage.
If you use your computer for occasional freelance work, your electronics coverage limit through your renters insurance policy still covers applies. But if you use your computer exclusively for work, it would fall under another category limit for items used primarily for business purposes. Ask your insurance company what your business property limit is, and if you have one. If you don’t, or you need more coverage, you may need to purchase additional rider called a business property rider to ensure that your computer is covered.
If your computer is stolen out of your car or out of your bag if you’re in a coffee shop, it may surprise you that your renters insurance may pay for a replacement.
That’s because your personal property covers your personal belongings when they are inside or outside your home. Some policies may have coverage limits on personal property claims outside the home, so talk to your insurance company about your policy’s limits.
Does renters insurance pay if you lose or ruin someone else’s computer? That depends, and is often up to your insurance company.
If you lose or damage a computer belonging to a friend, your renters insurance liability coverage may pay for their computer, as long as your insurance company agrees that the loss was caused by your negligence.
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.