When an insurance claim just isn't worth it

I've owned a laptop for about five years now. I bought it at the top of the range, upgraded it and use it constantly for education, business trips and at home almost every day. It really has served its purpose and I cannot complain about it at all. It's gone through Windows XP, Vista and Windows 7.

By now it’s quite heavy compared to what’s on the market, but it still manages to keep up with what we do, primarily productivity software, email and browsing. I didn't expect this long out of it. I only expected 3 years - the current Australian Tax Office period for claiming its declining value.

When I damaged its housing on a business trip, I thought OK, it’s going to give up the ghost. I purchased another laptop and it’s been sitting unused for the past few weeks so I thought I better register it with the company which provides my Home and Contents insurance. At some stage during the process when I explained how the old laptop was damaged, the customer service representative on the end of the phone asked me if I was going to lodge a claim.

Lodge a claim? It was my fault it was damaged, why would I lodge a claim? She explained we had accidental damage, so we could lodge one and see if we could get reimbursed for the damage. It sounded like a good idea. We have insurance so why shouldn't we try to recoup some of the money we give to them every year?

So I was transferred - the horror. I had a much less enjoyable experience with claims. From the moment the customer service rep started lodging the claim, I felt things going wrong. Basic things like being unable to hear her properly (the previous customer service person was crystal clear) to being lectured on who to vote for in the NSW state election.

She ran through the process quickly - very quickly over the loss of discount from 25% to 15% and the substantial upfront cost I would incur with the claim. Before I knew it, I was up for around $500 upfront to cover a very old laptop, with a further loss of $100 a year because of the loss of discount for the next few years. In addition, to quote the laptop repair would cost a minimum of $160 for a one hour consultation.

Meanwhile I'm thinking to myself, “This is going to cost me a lot, can I withdraw the claim?” I rang back and they happily withdrew it, saying it would not affect my policy and that the drop in discount wouldn't occur because the claim didn’t go through to fulfilment.

I'm glad I’m not up for this amount of money any longer, but I'm angry at the system. To cover a laptop probably not worth more than $100 given its age would have cost potentially around $700 to begin with for upfront and quotes, then a further $100 a year for the next few years due to loss of discount.

What have I learnt?

• Don't insure for more than something is worth.
• Be sure that if you do lodge a claim, you are aware of the ongoing consequences and expense and weigh up what you are losing in material items.
• Finally, shop around for the best coverage. Sometimes those discounts just aren't worth it.

Have you ever lodged an insurance claim for a small item? Was it worth it? Did you change what and how you insured as a result?