Last year the Financial Ombudsman Service received 600 complaints about mobile phone insurance coverage that didn’t pay out for a claim, and they expect that number to rise this year to 750.
Mobile phone insurance is usually offered at the time a mobile phone is purchased, but can be bought later on. The insurance is to cover your mobile phone should it be lost, stolen or damaged, and with the cost of replacing a mobile phone these days, the insurance can be a good idea.
Of the complaints the FOS received last year, more than two-thirds were upheld.
The complaints stem from the insurer refusing to pay a claim, and the reasons given by the insurance companies were that customers failed to “properly protect their phones” if the phone was damaged, or the customer’s hand was not on the phone at the time the phone was stolen; this is the case of a mobile being stolen.
If someone’s hand had been on their phone, odds are it could not be or would not be stolen. A bit of flawed logic there.
Another excuse given by an insurance company was that a customer was not harmed when the phone was stolen. That’s just poor if you ask me. Would you rather they were injured.
The complaints seem to be based on the fact the insurers have been applying tight terms and conditions and rejecting claims based on these terms and conditions; even if they are a bit far fetched.
But again, the FOS upheld the majority of the complaints, so the consumer wins.
Currently insurance companies sell around seven (7) million policies each year which generates around £475 million.