Given the recent rise of insurance providers offering coverage of your precious hi-fi, AV, and even Internet-connected computer equipment, is it wise to avail yourself of this type of insurance?
By: Ringo Bones
In my neck of the woods, the electric power, cable and telephone utility companies are recently diversifying their business by offering very reasonably-priced insurance policies that cover hi-fi, audio-video, and even Internet-connected computers against fire, lightning, and damage via electrical surges. With premiums that average at just pennies-per-day, is it wise to get hold of such insurance policies?
Given that most homeowner’s insurance policies – even though they provide coverage against fires – these seldom, if ever, provide coverage against destruction by fire of your irreplaceable high-end hi-fi and other electronic equipment. So it is definitely wise to obtain a separate insurance policy for your hi-fi and other electronic equipment - especially if they are very hard to replace like vintage vacuum tube-based audio gear. Obtaining a separate coverage is far from easy, which is the reason why most people opt not to get one. But for those who decides that their audio-video gear are important enough to warrant insurance coverage, there are tips to follow to allow one smooth processing of their application for them to insure their AV gear.
The problem of proper insurance coverage for high-end hard-to-replace hi-fi, AV, Internet-connected computer and other electronic equipment is rather easily solved. Specifically:
1. Keep a file with all your purchases of the hi-fi, AV, and other electronic gear that you’ve acquired over the years. One usually assumes such a file exists for tax write off purposes, but it is never safe to say never and probably equally unsafe to assume anything!
2. Using a film and / or digital camera (preferably both types of camera), photograph everything you intend to be insured. This serves as a photo documentation of all the hi-fi and other electronic equipment that you own and intend to be covered by insurance.
3. Using a high-quality copier, copy all your receipts and color copy all your photos – especially your digital photos - and keep them in a bank safe deposit box. That way you’ll have records and documentation that will survive any untoward occurrence. I mean what is the point in keeping records in your house - especially if it gets burned together with those items you intend to insure in case of fire. And if possible, have these items notarized by a qualified attorney.
4. Bring in a qualified estimator who will identify the replacement value of your hi-fi and other equipment you intend to insure if the amount and / or scale of your investment demand’s it.
5. You can now safely go to your insurance underwriter armed will all of the information collected above safe in the knowledge of a smooth and speedy processing.
6. Always insure your equipment for “full replacement value” rather than settle for a depreciated figure. Usually the insurance company will tell you that depreciation coverage allows them to sell you a less expensive policy and that you are taking a form of tax write off anyway. However, individual owners of up-market vintage hi-fi gear or other AV equipment seldom, if ever, employ chartered Certified Public Accountants from their local top accounting firms and "bank" their depreciation funds for future replacement. It makes more sense to try and obtain the most complete replacement coverage available to you.
Of all the tips cited above, proper documentation of all the gear that you own that’s intended to be insured is probably the most important. Especially now that insurance adjusters no longer respond as if they are born yesterday concerning privately-owned hi-fi, AV and other electronic equipment. But let us not forget that loss adjustment is still a very difficult matter and requires technical training in which a special group of persons known as loss adjusters perform this work. Loss adjusters typically work for the insured or for the insurance company. Also, if several insurance companies are involved in one loss, it is advantageous to have a single adjustment bureau handle the entire matter.
While many fire insurance policies also have endorsement for extended coverage like vandalism and malicious mischief, nevertheless the properties are only protected for specific perils. Like damage due to lightning strikes and / or the resulting electrical surge / damaging electrical spikes.
There are after all millions of up-marked high-end hi-fi gear around the world that had suffered some kind of calamity. Fortunately, no one I know was unlucky enough to have lost his or her vintage 1950s era Quad II amplifier with the oft-partnered Quad ESL 57 in a fire, flood or a freak electrical surge caused by a lightning strike. If the worst ever comes, it’s nice to know that we can insure our really expensive and hard-to-replace hi-fi, AV and other electronic gear. Especially if they cost on average 10,000 US dollars or more.