Be Careful When Purchasing Mobile Phone Insurance: Here is Why

Mobile-phone insurance is a sensible investment for many people, since receiving a free handset as part of a fixed-term tariff can become a problem if the device is damaged, stolen or ceases to work and you cannot afford to repair or replace it.

However, new evidence suggests that consumers need to be careful about mobile-phone insurance and the issue has been highlighted by the increasing number of complaints received by the Financial Ombudsman Service (FOS).

Growing Problem
The FOS reported that in 2011 around 3000 consumers got in touch in order to discuss issues with mobile-phone insurance and the rate of complaints seems to be rising in 2012.

While the complaint figure is significant in itself, it is the number of instances in which the FOS is upholding the claims and coming down hard on shady insurance companies that is most noticeable. 66 per cent of complaints that it investigates are upheld and this has resulted in the FOS creating a distinct category for mobile insurance rather than dealing with it as part of other insurance cases.

It seems that the increase in the number of complaints is not a coincidence and that the mobile-phone insurance sector has more than its fair share of disreputable providers.

Complaints
The nature of the complaints varies, although people most regularly contact the FOS because they have been sold a policy without being given the full information about the type of cover that they were getting.

For example, a mobile-phone insurance policy might include restrictions or exclusions which are considered to be extreme but have been hidden from the customer until it is too late. Many consumers have stated that they would not have signed up for a particular policy if they had known all of the relevant details.

One particularly shocking trend is that insurers have inserted a clause into policies which means that they will only pay up in the event of a theft if there has been violence, or at least the threat of it, during the course of the robbery.

Advice
Consumers have a number of options available to them before they invest their money in a mobile-phone insurance policy.

The first involves checking the reputation of the firms that they are considering to see how other customers have experienced their service when they have had to make a claim.

Secondly, it is necessary to read all of the small print, taking into account the exclusions and the restrictions which apply before you commit. This may seem tedious, but it is far better to be fully aware of your rights under the terms of a particular policy before you sign up for it.

Finally, if you are trying to make a claim on a mobile-phone insurance policy and are encountering problems with your insurer, then getting in touch with the FOS is a good way of dealing with the issue. Consumers with legitimate complaints will receive help and can quickly get any issues with their insurance provider resolved.

This guest post was submitted by tony, a British blogger with an interest in personal finance and money management. He writes on behalf of SO Switch (visit their website here – http://www.soswitch.com/insurance/car-insurance/) who can help you to find the best deals on everything from insurance to holidays.

Tagged advice, complaints, insurance, mobile, phone