Up to 100,000 people ‘wasting money’ on gadget insurance
Central Bank finds 21 per cent of consumers do not cancel device policies
The Central Bank said the overall price of gadget insurance was not clearly presented
Up to 100,000 people are likely to be paying in excess of €100 a year on insurance cover for mobile phones and other devices which they no longer use, a report from the Central Bank has revealed.
The regulator’s inspection of firms selling gadget insurance has questioned the clarity and quality of information given to consumers on what polices cover and what steps must be taken to make claims.
The Central Bank research shows 21 per cent of consumers do not cancel existing gadget insurance policies after taking out new ones, which means tens of thousands of Irish consumers are wasting millions of euro collectively each year on insurance cover which they no longer need and can never claim on.
The inspections at insurance firms selling gadget insurance to over 80 per cent of the market also found that, in certain circumstances, product details given to consumers were insufficient and inadequate information was given at point of sale and over the course of policies, which can last up to five years.
The bank said the overall price of gadget insurance was not clearly presented to consumers, and although claims acceptance rates are high, at an average of 91.6 per cent across the firms inspected, there were recurring and easily avoidable reasons for declined claims.
Among those reasons were the failure of consumers to report losses or thefts to a mobile phone provider, the gardaí and to the insurer within time frames specified in the policy terms and conditions.
Another recurring reason claims are rejected is because consumers fail to supply the insurance firms with all information and evidence required, for the validity of the claim to be verified.
The Central Bank has concluded firms must do more to provide clear and understandable information to consumers on the product - including key features, benefits, exclusions, how to make a claim, and the total cost of the product.
The bank said annual statements detailing policies and how claims can be made should be routinely sent to consumers, and it called on the sellers of gadget insurance to consider any relevant pre-existing insurance cover when recommending a new policy to a consumer.
It also said people should be empowered to make more informed choices getting additional information on price.
“With the Christmas shopping period well under way, many people will be making practical decisions to buy gadget insurance for their new phones,” said the Central Bank’s director of consumer protection, Gráinne McEvoy. “Our inspections and consumer research show that there is a gap between what most consumers believe their gadget insurance covers and what it actually covers.”
She said that given the popularity of this type of insurance as an add-on when buying a new mobile phone, “it is really important for sellers to ensure that the product they sell meets the consumer’s individual needs”.
She said sellers of gadget insurance need to be “very clear to consumers about the product terms, cost, conditions and limitations and inform consumers that they have a cooling-off period if they subsequently decide that they do not want to keep the insurance product.”