So you think your cellphone is insured?



So you think your cellphone is insured?

Think again. Your policy might still only cover one of your old phones that is no longer in use

Consumer journalist

Is your cellphone insured?  Are you absolutely sure that the handset you are using is the one that’s listed on your policy?
I’m asking because I’m certain that many of the cellphone insurance premiums being paid by consumers are a total waste of money because the phones are no longer in use, meaning there could never be a successful claim.
Given that most contract subscribers “upgrade” their contracts every two years, and acquire new phones, you’d think that cellphone insurers and their brokers would red flag policies with phones older than two or three years listed on them.
There’s apparently no law compelling them to do so, but if they cared about their clients, as they all profess to, surely they would send an SMS to those whose policies were taken out more than two years previously, asking: “Are you still using your Blackberry 9900? If not, please update or cancel your policy”?No, it’s seemingly far better to just keep taking the premiums month after month, year after year, happy in the knowledge that it’s the consumer’s responsibility to update their policies.
Two years ago I heard from a Port Elizabeth man who had bought a Motorola cellphone from Edgars in August 2004 and insured it with Finite. In January 2016 he noticed an R80 deduction on his statement, a premium he’d been paying all those years. When he queried it he was given the “it’s your responsibility to cancel” line. 
“How can a company deduct insurance for 12 years for the same phone?” he asked. “Who uses the same phone for 12 years?”
Well, exactly. But they can keep deducting every year, without notification, and they do.
When Wendy Coetzer of Cape Town upgraded her cellphone contract with MTN’s Tableview store in April 2012, the package came with a Blackberry 9900 phone for which she took out a “24-hour Mobility” cellphone insurance policy via brokers Pinnacle Marketing.She stopped using that Blackberry in April 2014 when she upgraded her contract. The original reference on her bank account statement was “24Hr” and in March 2014 that changed to “monitor” when Pinnacle switched to a new underwriter.
No wonder that deduction didn’t leap out at Coetzer as an insurance premium for a cellphone she stopped using in March 2014.
“It took me a while to find out what the deduction was for, but my bank finally gave me a phone number for Pinnacle Marketing in April,” Coetzer told In Your Corner. 
She’d been paying a premium of R97 a month – in total she paid about R4,600 on premiums after April 2014 on a cellphone she wasn’t using.
“I was told that policies remain active until cancellation is requested, so I could have carried on paying for another 10 years!” she said. “When I asked why I didn’t get policy details or any correspondence at all, they advised me that the last SMS was sent to me in September 2015.”
Pinnacle Marketing’s compliance administrator Ruark Jewell told me that Coetzer was sent two SMSs – one in July 2014 stating: “After a 14-year increase-free period your device insurance premium will increase on average, approximately 15% from 1 August 2014”, and a second in September 2015: “It is important to ensure that you read your policy documents as it contains important information about your Cellphone insurance cover. Please click on … for all the information.”So the premium on the phone she was no longer using went up by 15%, after she’d upgraded to another phone.
I asked: “I’m pretty sure that the chances of Ms Coetzer or anyone else still using that phone six years later are extremely low, so why were there no more attempts to discover whether or not she was still using that Blackberry, in the interests of Treating Customers Fairly?”
Jewell's very detailed answer can be summarised thus: Pinnacle Marketing is a direct marketer in terms of the Policy Holder Protection rules (PPR), and because Coetzer’s policy hadn’t changed in any way, except for that premium increase, the company was not obliged to provide her with a letter of renewal, ever.  In other words, those policies can run indefinitely with no notification whatsover.
I asked how many cellphones five years or older were still on Premium’s books. Jewell said the Protection of Personal Information Act precluded him from divulging that.
But I think it’s safe to say that a significant number of the handsets listed on those policies are no longer in use – in other words the premiums being deducted are wasted spending on the part of those cellphone subscribers. Spread the word!
Coetzer’s request for a refund would be escalated to the insurer if she put it in writing, Jewell said.
If you call Pinnacle Marketing a recorded message played while you hold gives you great advice, advice which would no doubt help many of their clients if it was sent to them proactively:

If you upgrade your cellphone, or have it swapped out as an “out of box failure” or get a new phone after an insurance claim, make sure that that cellphone’s IMEI number is recorded on your policy. If you don’t your claim will be rejected.
Cellphones’ replacement values fluctuate so contact your insurer at least every six months to make sure your phone is insured for the correct amount. 
Do not put another SIM into your insured cellphone or your claim will be rejected. For a claim to be valid, the listed SIM must be in the cellphone at the time of loss, damage or theft.

Facebook: wendyknowlerconsumer
Twitter: @wendyknowler
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