Thursday 22 March 2018

Most people buying gadget insurance don't know what they're signing up for - report

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Charlie Weston Personal Finance Editor

A new report from the Central Bank shows that most people buying insurance for their mobile phones and tablets do not know what they are signing up for.

This means many people are paying for cover they may not need, with regulators suggesting that consumers are not being treated fairly.

The findings of the report have prompted the Central Bank to carry out a probe of companies offering device insurance to ensure they are observing regulatory rules.

It comes as thousands are expected to take out cover for their devices in the run-up to Christmas.

People tend not to buy insurance for their phones, laptops or tablets unless it is sold to them, the research found.

Then were they make a claims they are surprised to find out that the insurance excess, or the amount of a claim they have to cover themselves before the insurer will pay out, tends to be more than the cost of a repair.

Consumers with insurance were not aware that they have to report the theft of a phone to gardaí before they can get a pay out.

Almost half of consumers mistakenly believe wear and tear is covered by the policy they pay for, a survey commissioned by the Central Bank as part of the research, found.

Most people expect to be offered a new device when their one needs to be replaced.

Some 440,000 consumers have gadget insurance, but double this number held the insurance in the last two years.

One in five failed to cancel a previous policy when taking out a new one.

Director general financial conduct at the Central Bank Derville Rowland warned insurers to make sure consumers know what they are signing up to when they take out gadget insurance.

“The firms who develop and sell these insurance policies have a regulatory responsibility to ensure that the products are properly designed to meet the needs of the consumers they are sold to, and that they are sold in a fair and transparent manner,” she said.

She reminded firms to ensure they have strong product oversight and governance arrangements in place for the manufacture and distribution of these insurance products, in order to ensure that the best interests of consumers are protected.

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