One of the most common electronic gadgets owned and / or accessible to most people is the mobile telephone handset. Until the late 2000’s or so, not many people could use the mobile phone to do all kinds of businesses apart from making and receiving calls, as well as text messaging.
The use of mobile phones has become so widespread that it is considered ‘abnormal’ not to own one! One cannot live without a mobile phone for both socio-economic and other financial transactions.
Mobile phones have evolved from being just an electronic gadget to a complete business solution centre. There have been times I wonder how we even existed without mobile phones 20 years ago!
From various applications and other services the mobile phone can provide, it is little wonder how heartbroken one can be in the event of loss of or damage to the gadget. In spite of contacts backup, the loss of vital information, images and memorable videos make it more painful in the event of a mobile phone loss.
In fact, for many a business person, living without a mobile phone for an hour is akin to sniffing out an important ‘organ of the body’ albeit temporarily.
Is mobile phone insurable?
Yes, mobile telephone handsets are insurable. The only reason many insurance underwriters may shy away from providing insurance cover for mobile phones is the fact that the risk is very high judging from how the gadget is handled.
From the possibility of misplacing it in a public transport or public place, damaging it, falling into water and crashing of the handset accidentally, to the mobile phone’s high rate of theft in most parts of the world is incredible.
Availability of mobile phone protection insurance
Indeed this type of insurance has been made available in contemporary business times in the insurance marketplace. Patronage has been high and so is demand in especially the western world where a chunk of the people own and use mobile phones.
Modern smartphones are generally expensive and need to be protected financially; hence, the emergence of mobile phones protection insurance.
Can mobile phones be insured as stand-alone policies?
It is instructive to note that purchasing a mobile phone insurance as a stand-alone policy may not be necessary but can often be incorporated in a household policy. The ‘personal possessions’ extension to a contents policy under a household policy will usually be needed to ensure adequate cover for mobile phones both inside and outside the home for accidental damage, loss and theft.
To make this clearer, it is important to touch briefly on what personal insurances entail. Personal insurances generally refer to the types of insurances which can be purchased by individuals rather than companies. Insurers, therefore, provide a standard package of policy cover in a single policy document to encompass household insurance policies.
Apart from ‘buildings only’ policies which provide cover to the structure of a building with its fixtures and fittings, of particular relevance to the mobile phone insurance is the ‘Contents only’ policy. This covers the contents of the house which would naturally include mobile phones and personal possessions, money, credit cards, etc.
Other personal insurance products may include cover for domestic animals, caravans, small craft, personal accident, payment protection, private medical insurance etc. Here, mobile phones are easily factored alongside all the above as ‘contents only’ policy.
For contents cover and in the context of mobile phone insurance, the agreed sum insured would be a representation of the cost of replacing all items as new. However, wear and tear in respect of mobile phones which is almost always insured on an indemnity basis will be factored in. To assist the proposer in arriving at the value of the phone(s) in each room, insurers typically provide guidelines available on the proposal form.
Stand-alone mobile phone insurance
For proposers who may decide to purchase separate mobile phone insurance as a stand-alone policy, there are a number of such providers. Here, it is important to note that all the mobile phone networks in especially the western world have their own insurance arrangements. Alternatively, cover is also available through high street retailers, such as Carphone Warehouse and Phones4U, as well as through specialist insurers, intermediaries and aggregator websites.
Scope of cover
These insurance policies can be obtained for individual phones or multiple phones. Cover is provided for repair or replacement following theft, loss or accidental damage of the phones.
Generally, these policies provide an automatic extension to the cost of fraudulent calls and downloads if the phone gets stolen.
The cover is applicable anywhere in the United Kingdom (UK) and for up to 90 days globally.
Policies usually contain a limit per claim per phone. Depending on the type and value of the phone, this can vary between £750 and £2,500.
Limit of excess
An excess of between £30 and £75 typically applies. In the case of iPhones, the excess is often increased to £100. This implies that the insured will be made to bear the first £30, £75 and £100 in the event of claims and the remaining amount is paid by the insurers to the insured.
What is not covered
The following are some of the typical policy exclusions that apply to mobile phone insurance:
- one cannot make a claim within the first 14 or 21 days of cover commencing;
- the cost of unauthorised calls and downloads unless the phone is reported as missing to the network provider within 12-24 hours;
- theft of phones whilst unattended in public places;
- damage caused by a computer virus;
- damage caused by water;
- loss of pictures, audios, videos, data and contacts are not covered;
- failure to take reasonable care;
- theft unless accompanied by force or threat of violence (an exclusion generally applied by only some insurers);
The risk assessment and underwriting factors above are used by insurers to establish a flat monthly premium per phone.
The way forward
Insurance companies in Ghana have come of age and I believe they must be fast in considering the projection of the need for insurance policies of this nature as a technology-driven insurance industry is dependent on well protected gadgets such as MOBILE PHONES!
The author is an Insurance Practitioner