December 2005

NIG a leading UK insurance company is warning music lovers that millions of songs that they have downloaded legally from the Internet may not be covered under their household insurance if their iPod or MP3 player is lost or stolen.

Under the vast majority of household insurance policies, digital music is only covered if buyers can provide receipts to prove their purchases, but research conducted by insurance company NIG shows that most people fail to retain this paperwork.

In a national survey conducted by GfK NOP on behalf of NIG, of those people that download music, 84% are unable to provide accurate proof of the value of the music they've downloaded.

Buyers can store their receipts electronically, but insurance company NIG, part of The Royal Bank of Scotland Group, says that this may not be enough.

"The days of the 'receipt drawer' are fast disappearing as we increasingly become a paperless society, transferring and storing receipts electronically," says Adrian Harris, NIG's Director of Personal Lines.

"When claiming on their household insurance, more and more people are printing off proof of payment or ownership from their household computer. But it's when the computer is one of the items that have been lost, broken or stolen when the problems really start.

"We will do our best to accept photographic proof for physical items such as large CD collections, but this would not work for downloadable items, such as music and films.

"With no physical proof of ownership insurers have little option but to dismiss some claims.

"And with the increase of broadband and high-speed internet connections, more and more people will be downloading music and films and the problem could get worse."

Mr Harris says that the solution is incredibly simple.

"All we ask is that people print all their electronic receipts and store them safely. With this physical proof of ownership, we can process claims quickly and ensure that the householder receives back the amount that they are claiming."

The level of legal music downloads from the Internet has tripled during 2005, reaching some 10 million songs in the first half of this year. According to GfK NOP's survey for NIG, just under 42% of the UK's population has downloaded music from the internet.

One concerned music fan is Kelly Pullen from Greenwich in London. The 34-year old marketing executive has invested thousands of pounds in entertainment downloads since she turned to broadband five years.

"All we hear about is illegal downloads from the Internet, but this is the first time I have thought about insurance before. But it is actually quite obvious and I am pretty shocked by the implications," she says.

"I probably have three to four thousands pounds worth of music and films on my hard drive and iPod and I thought I was saving a few pounds by not printing off my receipts.

"It seems that this could be costly if something goes wrong."