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Does Your Home Insurance Cover Digital Files?

A recent survey of 26 insurance companies uncovered that more than 70% of them offered coverage to some extent on the digital content of homeowners. This would include personal photographs and videos or legally downloaded movies and music. 
Uncertain meaning of ‘digital content’
 
Various insurers differ in the extent of monetary coverage as well as their purview of “digital content” for the purpose of insurance. A challenge for both insurers as well as consumers seeking out claims is that the definition of “digital content” is inconsistent between policies and insurers. Insurance companies are typically clearer on the exclusions from the term. Most of the insurers surveyed do not cover data losses suffered as a result of a computer virus.
 
Comparethemarket.com, a website that enables consumers to compare products, said that most policies incorporate ‘electronic data’ and ‘downloaded content.’ The cause of the loss or destruction of data does play a role in a successful claim. Data destroyed in a fire or as a result of a natural disaster may be more likely to be covered by homeowners insurance. On the other hand, claims for loss of business data, even if stored on a home laptop, may not. This may only fall within the purview of business insurance.

Taking care of your digital assets
 
Presently, it appears that insurers are still ironing out the kinks in insurance of digital content. Consumers should take basic steps to protect their digital assets:
 

  1. Regular back-ups of data including offsite back-ups in case of physical damage of hardware.

 

  1. Strong passwords for your digital accounts and your system. Sensitive documents should be password protected.

 

  1. Installing antivirus and spyware programs.

 

  1. Understand the law in your state with respect to protection of your digital legacy. On 1 January 2013, only five states in the U.S. had a legal framework concerning access to social media accounts after a person’s death.

 

  1. Make a digital inventory and determine what you want done with the information, in case of a crisis. Articulate the above in writing and send it to someone trusted with clear instructions.

 
Knowing the value of digital assets can be tricky. But when they are lost or destroyed, consumers are, undoubtedly, inconvenienced. In a time when most of our data is stored online, the safety of digital data is worth considering.
 
SunGate Insurance Agency can address concerns about protection of your digital assets. Consumers are advised to read insurance policies closely as well as discuss with their insurance agents about the coverage of their digital content. 

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