Software downloads

Home PCs often house hundreds if not thousands of dollars of software - some of it bought on disk and more downloaded perfectly legally from the internet. Few people have any idea whether their contents insurance covers it.

Downloaded software is often cheaper than the disk-based version and has other advantages - for example, you can start using it straight away, without having to go shopping or waiting for it to be delivered. Adobe Photoshop CS3 photo-editing software, described as suited to "keen amateur photographers", costs US$649 (NZ$875) downloaded compared with $1399 from Dick Smith Electronics. So it's not surprising that people download their software.

If your computer is stolen then that loss can be extremely expensive unless you've kept the purchase receipts and serial numbers for your software packages, says Keith Davidson, Chief Executive of the Internet Society of New Zealand.

The software serial number should allow you to download the software again or get a replacement disk from the supplier, for a nominal fee. But this might not be the case for all companies - such as Apple. Fiona Martin, public relations manager for Apple, made it clear that having a receipt didn't automatically allow you to download Apple's data again. You'll need to check before you download about what happens if your data is lost or stolen.

Gaps in the cover

Most insurers do cover the loss of legally downloaded software. But there's usually no cover for re-installing the software. Unless you can do it yourself, installation can be time-consuming and expensive.

What's more, even when software is included in a policy it may only be covered for its current value (after depreciation) - not its replacement cost. As IAG points out: "software depreciates or becomes obsolete or superseded very quickly." That's tough, if you prefer the version you've got.

IAG's cover, however, is better than that of AMI, which provides cover only for "operating software" (such as Microsoft Windows) that allows your computer to function.

AMI's policy goes on to say: "Optionally installed software to carry out activities (and for which the customer will hold the programme disks) is not covered. However, should the programme disks themselves be damaged or destroyed they would be covered, as the disks are physical items." That's very limited cover indeed - and doesn't relate to the increasing use of the internet for downloading software of all kinds.