Expensive gadgets and toys – the insurance implications

Personal technologies such as drones, gadgets, consoles, video games, GoPros and smartwatches have gained popularity, however, it raises many questions when it comes to insurance. Specifically, under which section of your policy are they insured?

As with most things that you have insured, it is important to provide your insurance provider with as much information as possible and specify which personal technology you have. This will ensure that should any gadget get damaged or even worse, stolen, it will be covered and replaced.

Drones and quadcopters

Items such as drones and quadcopters will be considered part of your contents that are covered under the Household Goods section, meaning they are covered inside your home against the defined events listed in the policy wording.

However, the very reason for owning these items is to use them outside, which significantly raises the chances of them getting damaged. For example, one gust of wind could shift your drone off course and into a tree. Because of this, it is imperative that these items are specified under the All Risks section of your policy, which will provide adequate cover outside of your home.

If the drone or quadcopter is specified under the All Risks section, it is important to understand that not everything is covered. For example, should a drone get damaged while it is being used for racing purposes, it will not be insured.

Moreover, any damage to third party property or injury to third parties caused by the drone will be covered under the Personal Liability section.

GoPros and other action cameras

Photographic equipment has made many significant technological advances throughout the years. You are now able to take high-definition videos or photographs from a device that is small enough to fit in your pocket. This has increased the likelihood of these devices being used outside of your home.

At home, they will be covered by the defined events listed in the policy wording. However, they will not be covered away from the home (even outside), unless they are specified under the All Risks section.

If specified, they will be covered anywhere in the world, even while they are used. Remember that they will not be covered by mechanical, electrical or electronic breakdown or failure, unless you specifically include them under the mechanical and electrical breakdown section.

As with any Personal Lines policy, these cameras must only be used for private purposes.

Smartwatches and Fitbits

Smartwatches continue to grow in popularity.  The question is whether these smartwatches are watches or whether they are mobile communication devices, which will determine how they must be insured.

There are two classes of smartwatches: those that interact with your mobile device and those that are mobile devices on their own.

If your smartwatch interacts with your cellphone, we will consider it to be a watch. As such it will be covered at home against the defined events listed in the policy wording. Away from the private home, they will be covered under the All Risks section as general all risk items. General All Risks items include personal items that a person would normally wear or carry.

However, if your smartwatch also acts as a mobile communication device (ie, you can make calls from the smartwatch) it will be considered a mobile communication device, which will not be covered under either the Household Goods section (which covers your contents) or as general all risks under the All Risks section. These smartwatches must be specified under the All Risks section.

Tech toys inside your home

Typically these items are not normally removed from your private home and therefore they can be safely insured with the rest of your contents under the Household Goods section, where they will be covered against the defined events listed in the policy wording.

If the insured has Accidental Damage cover, they will also be covered against accidental damage and most importantly against damage caused by power surges. It is therefore very important for policyholders to ensure that their Accidental Damage cover is sufficient to cover these tech toys against power surge damages while they are charging.

Tarina Vlok is a senior manager for UMA’s at Old Mutual Insure.

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