Got an expensive tech gadget for Christmas? You may want to consider insurance

It’s always a good idea to insure them given the high cost, but what’s the best way to go about it? It can be confusing and many people just don’t know what insurance they have, what it does and doesn’t cover and how to make a claim.

Central bank research on the matter found that companies need to be much better at giving consumers information before selling gadget insurance. For example, every fifth customer does not cancel their old contract after concluding a new one. That could mean they are double insured but not getting double entitlement.

Cell phone insurance is the most common type. But the regulator found “inadequate” information on policies, particularly around exclusions and the total cost of premiums. It’s often sold as a monthly bill add-on, but over a few years the insurance can cost as much as the device, which isn’t a savings at all.

The good news, however, is that the claims acceptance rate has been high – 91.6 per cent – and where claims have not been successful it has usually been because the thefts have not been reported – a Garda declaration is required – or a proper one documentation was available. t completed (see below).

Warranty v Guarantee

You buy a new device and are asked if you want a “guarantee”. Does it come with a guarantee? What is the difference?

The manufacturer gives a guarantee free of charge. This means if something goes wrong your rights are covered for a certain period of time, say 12 months. They are subject to EU legislation anyway, but it is an extra promise from the product manufacturer and gives you peace of mind that they take complaints seriously.

A warranty is a form of insurance, usually sold by the store, that covers the item after the warranty has expired. It’s optional and you shouldn’t feel pressured into buying it. Consumer rights are already very strong when goods are faulty or need to be repaired. It can only cover parts, not labor or postage, and it can only last another 12 months anyway.

Advice: add up the total cost of the warranty. Buy it only if repairing or replacing the item would cost much more and check everything you need to register.

Store/Product Insurance

This is an externally supplied insurance policy – you will see it underwritten on the contract by a leading insurer – which you can easily buy yourself. A store acts as an intermediary in this case, and sellers receive a commission for the sale.

Advice: Ask what it actually does and what it costs over the contract period. Then you see, you can just buy it yourself, for less.

Gadget Insurance

This form of insurance is relatively new as insurance companies have discovered a niche in the market for expensive, portable items that can easily be lost or stolen. Cue complex contracts and high premiums.

The Competition and Consumer Protection Commission says you should first ask yourself if you even need it. The premium is based on the replacement value. So insuring the latest iPhone could be €15 a month. For something that has a rapidly deteriorating lifespan of maybe three years, that’s £540. Would it be cheaper to put the money in and insure yourself if necessary?

The deductible can be up to €75. That already reduces the value of the insurance. If you already have home insurance, it may already be covered.

Insurance only covers gadgets purchased from authorized sellers, so forget about those purchased on eBay or directly from an individual. If repaired, it may not be insurable.

Most policies only cover gadgets that are new or nearly new.

Pay-as-you-go phones are difficult to insure because you have to show “proof of use” with a claim.

Finally, device insurance often claims to cover “up to five devices” in a household, but if you read the fine print you might find that only one of those can be a phone. That won’t work in a family of teenagers with expensive cell phones.

Advice: Get the cost over the lifetime of the item. Ask about the exclusions.

home insurance

Your gadget may already be covered. Most home insurance policies cover stolen or lost items outside of the home. However, these policies usually come with a deductible of at least €250 and your premium could go up after a claim is made.

It may well be part of a broader claim — say, a home invasion — but claiming just a single device theft may not be worth it.

Advice: Call your insurer and find out exactly what your device is covered for and under what circumstances.

Claim successfully

You bought that expensive device and expensive insurance policy, but did you read the fine print?

If you have an ‘insurable event’, whether it was dropped in the toilet or stolen from your pocket while going out, there are certain things you need to do to increase your chances of a successful claim.

These will be written into your contract, so it’s worth checking it first.

• You can usually only make a claim after the first 14 days after the cover is taken out – this is to prevent people from buying a policy after something happens to the gadget. So be very careful with it early on!
• Check the deductible and calculate how much it would reduce the value of the claim. This amount will be deducted from the amount you receive.
• Contact your insurer as soon as possible after the event. Ask them what your next steps are. Some insurers insist that you have to report a claim within a certain time limit.
• Claims of theft must be supported by a formal report to An Garda Síochána. Failure to do so, even if you believe it is pointless, may void the claim.
• You must provide documentation, including proof of purchase (receipt), proof of use (invoice), in addition to completing a claim form.
• The insurer must give you 10 days to accept or decline the claim and pay out within 10 days if accepted. If they refuse, they must state their reasons in writing.

Courtesy: Competition and Consumer Protection Commission