Should you insure your mobile or laptop?

As the penetration of electronic gadgets like mobile phones, tablets and laptops increases, insurance for such products is also catching on. In some cases, the store may insist that the gadget cannot be purchased without the insurance, while some offer it as an option.

Gadget insurance is always bundled with the product and not sold separately. Also, they are available only for new products, not second hand ones. For this insurance companies have tie-ups with retail stores.

"Between the time of purchase and the customer coming to us for purchasing insurance there could be some damage to the gadget. Since it is a small ticket item, there is no point in getting it inspected. So, we insist on the insurance being purchased with the gadget," says an official from New India Assurance Company.

The premium depends on the coverage offered - damage, theft or both. It is calculated as a percentage of the gadget.

"Currently, the policies are sold only with gadgets sold at physical stores, though we are receiving enquiries for gadgets sold online. Going ahead we may tie-up with online retailers as well," says the official from New India.

Coverage

You can claim insurance if your gadget:
Suffers accidental damage and such damage causes the gadget to stop working
Fails to work because accidentally fluid has entered its internal circuitry, resulting into stoppage of the insured equipment.
Is stolen in burglary including theft and housebreaking
Is stolen from a locked building/room/vehicle
Is damaged due to fire, lightening and explosion.
Is damaged by act of god perils
Suffers damage or theft during riot, strike and malicious damage
Shotformats Digital Works, a company that provides digital and mobile services has also tied up with New India Assurance to offer insurance for mobile handsets and tablets through its own distribution network called Biscoot. The package includes anti-virus, back-up and insurance for theft and damage. The company has a network of outlets where customers can get their gadgets repaired and the money is remitted to the customer within 48 hours.

Exclusions

But the things to note are the exclusions. For instance, according to the policy details on New India's website, exclusions are as follows:
Mysterious disappearance
Theft from unattended vehicles, except from fully enclosed car that is securely locked
Theft, loss or damage during the hire or loan to a third party
Mechanical and electronic breakdown or derangement
Overloading and experimentation involving imposition of any abnormal conditions
Damage by wear and tear, vermin, atmospheric or climatic condition or gradual deterioration, inherent defect or from any process of cleaning, repairing or maintenance
Loss or damage due to war or nuclear perils, loss by water or from any water borne craft
Intentional or willful act of the insured party

Companies insist that in case of damage the repair has to be done at an authorised service centre and in case of theft a police complaint has to be filed, within 48 hours.

Depreciation

The biggest surprise for customers, at the time of claiming, is the fact that they will get only depreciated value of the product. The depreciation values are usually as follows:
0 to 3 months-20 per cent
3-6 months-30 per cent
6-12 months-50 per cent
In some cases the depreciation can be as high as 75 per cent," the official from New India says.