QUESTION: I have just bought a top-of-the line Notebook computer. I keep it at my home most times. At other times I carry it to work or on my trips around the island or when I travel overseas. What is the best way to cover my computer? It is the most expensive item in my house and my contents are not insured. My police friends tell me that portable computers are "hot items" for thieves in Jamaica nowadays. I wish to insure mine before it is too late.
- A.D., Kingston 6.
Answer: My sources also tell me that computers are "hot items." The incidence of theft of these items generally - and in particular, notebooks - is said to be on the rise.
There is a strong demand for insurance to cover computers, especially from businesses. However, there are no statistics locally that tell us about losses to notebooks.
Safeware, a United States insurance agency that specialises in insuring computers, says that in 2001, 60 per cent of the Notebook claims they settled resulted from accidental damage, such as dropping the computer; 26 per cent were due to theft; seven per cent for water or flood damage; while power surges accounted for three per cent.
The insurability of personal computers in homes poses particular problems when household contents are not covered. There are many reasons for this. One is that insurers cannot calculate the frequency of losses, as they do for household contents.
RECORD
Computers are fairly new in Jamaican homes and insurers may not have built up a sufficiently large record to draw any conclusions. Because of this, they cannot calculate premiums for customers like you or, if they decide to insure you, they charge the same rates that they charge to businesses.
One solution to your problem is to insure the contents of your house [including the Notebook computer] under a household policy. The premium will depend on the makeup of the walls and roof of the house. This can range between $6.50 and $8.00 for each $1,000 of insured value.
These rates assume the house has a concrete or metal roof and concrete or reinforced concrete walls. It also supposes that the house is not located close to the sea, a river or a gully.
The household policy provides protection against a wide range of perils. Some of them include damage from fire, earthquake, hurricane, flood, burglary and theft. Note that accidental damage and damage arising from power surges are excluded.
This defect can be remedied. Some policies can be extended for an extra premium to provide all risks coverage for fragile property like notebooks. This coverage is important because it will protect the computer in transit and at locations other than your house.
Bear in mind also that some notebooks come with warranties. Typically they cover parts and labour for a limited period. These warranties protect you against defective hardware. Loss by theft, accidental damage or other accidents are normally excluded.
WARRANTIES
Many companies offer extended warranties for an additional cost, representing one per cent of the computer cost for periods ranging from between one to four years.
To summarise, the limited warranty offers the least protection. It can be widened by buying an extended warranty, which offers more coverage for a longer period but excludes fire and theft. The household policy in its standard form offers protection against fire and theft. Accidental breakage or damage is not covered. This can be obtained from an all risk extension. These forms of protection are limited to damage to the hardware. Costs of retrieving or replacing lost data are not covered.
ENDNOTE: Tommy James effectively called me a liar in his July 25 letter to the Financial Editor. The reason: he could find no record of my call to LICA. Actually, I wrote that I telephoned the head of LICA. There was absolutely no mention of the name of Mr. James' employers in my article. Criticism is equated with the tarnishing of industry image. Either he has not read, or has read and not understood, the Financial Services Commission Report for 2002 and the emphasis it will be placing on investigating complaints in the sector it regulates. I thought I was doing a good deed by highlighting an area of weakness in Mr. James' industry.
Cedric E. Stephens provides advice on risks and insurance. If you need free information or advice to solve a problem, write to The Financial Editor or, contact Mr. Stephens directly at aegis@cwjamaica.com.
