Your Money: Is gadget insurance worth it?
It's wise to check the small print if trying to cover phones and laptops
There's one thing every family has more of in the run up to Christmas- and it's not mince pies.
At least one person will be getting a gadget, phone, laptop, e-reader or some other device from Cyber Santa and they'll want to make sure nothing happens it.
While house insurance policies cover some hi-tech items, some of the time, they often don't come up to scratch and people shop around instead for specialist gadget cover. This week I'm looking at what's out there, and how effective, and expensive, these policies are.
Insurers really don't like providing cover for small, light-weight expensive items - they're the most attractive to a burglar and easily get damaged too, so premiums can be very expensive.
As a result, many end up with insurance that may overlap with what they already have, a consequence of policy life.
While your regular house insurance policy covers 'contents' in your home, many carry a 'per item' limit, which might be just €750, or curtail that cover once the items are taken out of the house.
That's not much use for your mobile phone, or laptop which could be specifically excluded, or may need an 'All Risks' or 'Specified Possessions' listing on your plan, carrying a hefty extra premium. It's worth first check exactly what your home insurance covers, so at least you know what you have.
Recent research from the Central Bank found disturbing evidence that consumers are bewildered by how gadget insurance works, and in some cases were pressured into buying products they didn't need. The majority tested did not understand the insurance policy, and thought it covered more than it does.
Some 43pc of customers read the policy terms and conditions but the majority didn't understand them; 29pc didn't realise a theft or loss had to be reported to Gardai for a claim to be valid; while 45pc expected 'wear and tear' to be covered. A massive 77pc thought they'd be automatically offered a replacement device if theirs was stolen or lost, which is not the case.
The Bank also took exception to providers of these policies, saying some terms were unfair, such as the excess (the part of a claim the customer pays first), often costing more than the actual repairs, and that children under 18 couldn't have their devices insured.
But it also found sinister evidence that many customers had not intentionally sought out gadget insurance, but were flogged it while buying their device.
The problem is that some of these consumers were already covered on different policies and didn't realise they had to cancel them first, thus over-paying for cover they couldn't ever claim on.
Shortcuts What’s covered and what’s not
• Repairs due to accidental damage, or replacement if necessary
• Refund of loss after fraudulent use (eg, data to a financial limit).
• Normal wear and tear
• Theft from parked car (unless item concealed in boot)
The average cost of specific gadget insurance is €4-15 per month. Price depends on the device, so the latest iPhone will cost more to cover than last year’s Android.
Most policies cover theft or damage, as you would expect, but you may have to pay extra for ‘loss’, which includes dropping it down the loo, or forgetting where you left it.
You can buy a policy which covers multiple gadgets, but be very careful about reading the context. It will not, for instance, insure everyone’s phones, laptops and fitbits. It may just cover say, five items, and only one of them a phone.