Homeowners are being urged to check their home contents insurance cover to find out if their digital assets are adequately covered.
Comparethemarket.com has warned that many home insurance providers are being unclear as to whether music, videos and photographs stored online are covered in their policies.
Its research discovered that while more and more household assets are held online, the insurance industry has not adjusted to meet our increasing dependency on digital possessions.
Chris King, head of home insurance at comparethemarket.com said: “Many people have no idea how much their digital assets are worth but would be devastated if they lost expensive games, files or precious photographs.
“In an age of big data, when more and more of our ‘contents’ are stored online, it seems the insurance industry has not yet adapted to keep up with the times.
“If there is a fire in the house and your CD collection is destroyed, you are reimbursed for the cumulative loss of these items. Why should it not be the same for your digital music library?”
Vague or inconsistent wording
Researchers at the price comparison site analysed the policy wording of 26 home insurers as part of its investigation to find out more about the cover they provide for digital assets.
They discovered most of the policies – 20 out of 26 (77%) – specified they offered some kind of protection for loss or damage of digital assets. However, the definitions were often vague or inconsistent, referring only to ‘electronic data’ or ‘downloaded content’. Just five were specific about digital assets as music or videos and only two mentioned digital photographs.
There were also variations around the types of digital assets which were covered, and some insurers required receipts in order to receive compensation.
The average pay-out for digital loss or damage was £1,000 with policies ranging wildly from £500 to £10,000.
When it came to exclusions and pay-outs for digital damage, however, insurers were clearer, comparethemarket.com discovered.
Advice to policyholders
King added: “There will always be differences between policies, which is why it is always advisable to read your terms and conditions.
“However, with digital assets in particular, there needs to be more standardisation and clarity across the industry, just as consumers expect from all other insurance products.
“Levels of cover vary wildly between different policies so, if you have a lot of digital assets, it’s worth checking your policy and shopping around if you don’t feel your current one meets your needs.”
He also advised ensuring assets are protected with strong passwords and high quality antivirus software and were backed up in the cloud.
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