Cell Phone Insurance - Is it Necessary?

More than 180 000 cell phones are stolen in South Africa every year. 100 000 Cell Phones are handed in for repair each year, 25% of these phones will be beyond repair. The cost of new cell phones keep on rising as technology improves (and inflation increases.) A cell phone nowadays, is much more than a phone, it’s a personal computer, radio, MP3 player, walkman, you name it. If you have a cell phone contract and your cell phone is stolen, lost or damaged, you remain liable for the contract until its expiry date.

To replace a stolen, lost or damaged phone does not come cheap. If you have a contract phone and you decide not to replace the phone after its being lost or stolen, you will still be liable to continue paying the monthly rental until the contract expires.

If you have householder’s insurance you may be under the impression that your cell phone is covered under the contract. Is it? Check your policy document to make sure if, when and for how much it is covered. Most often, cell phones are lost or stolen outside of the house. This means that you will not be covered unless you have specified the cell phone under the all-risks cover portion of your policy.

If you decide to add your cell phone to your household policy as a specified item, ask your insurer some questions, once you have researched what other options are available in the market. Remember to advise your insurer to change the details of your phone under the specified items on your contract when it is replaced or when you upgrade.

You also have the option of insuring your phone through your cellular dealer (where you bought the phone) or through your service provider. There are also specific cell phone insurance companies, specializing in cell phone insurance. As with any insurance, first do your homework and investigate your options. The internet is the best place to get this information.

Getting specialized insurance through your service provider could include nice extras such as, getting the phone blacklisted, reporting to the police and advice on replacement models. They can be rather pricey, about R30 per R1 000 of the insured value. So weigh up your options and get a quote from your household insurer as well.

Always read the contract. You may be so excited when buying a new phone, you agree to take insurance with the provider, but you never read the contract. There may very well be a clause stating that, unless the phone is removed from your person, you will not be compensated; or if you were negligent in any way.

Some points you may want to consider when looking at cell phone insurance:

1. A competitive price.
2. The excess payable.
3. Cover for not just theft but also loss and accidental damage.
4. Am I covered for calls made by the thief or others after the theft and until the phone company has blacklisted the phone?
5. A replacement phone until the stolen phone has been replaced, or a damaged phone repaired.
6. The length of the claim.

Some tips to look after your cell phone and what to do should you loose it:

1. Keep your cell phone serial number and IMEI number in a secure place. You need the IMEI number to request your service provider to block your number should the phone be stolen. Press *#06# to find your phone’s IMEI number.
2. Always use a PIN on your phone.
3. If your phone is stolen or lost report this to the service provider immediately so they can blacklist the phone.
4. You are obliged by law to report your lost or stolen phone to the police, even if you gave the phone away you need to advise them.
5. Keep your phone on your person, in an inner pocket or handbag (if it’s under your control), do not put your phone on the table in a restaurant, you relax and forget about it.
6. Insure your phone for its replacement value, bearing in mind that cell phone models are upgraded all the time and may cost much more than even a year ago.

For many people their cell phone has become a lifeline, one they cannot live without. We are not even talking about teenagers here, that’s another story altogether! If you are a contract subscriber you should not be without the peace of mind that comes from having your cell phone insured.

Happy chatting and look after that phone!