Your high-end smartphone may be inadequately insured
With expensive, high-end technology such as tablets and smartphones more popular than ever before, South African consumers may be blissfully unaware that their favourite electronic devices are grossly underinsured – only realising too late when they claim for theft or damage.
This is according to Dawie Loots, CEO of MUA Insurance Acceptance, who notes that the recent launches of luxury smartphone devices such as the Samsung Galaxy S9 and iPhone X, priced at around R15 499 and R20 499 respectively, shows that there is a growing global demand for the adoption of high-end devices.
“This popularity trend is sure to continue locally and, due to the high cost of these luxury devices, it is vital for consumers to insure their technology against theft or damages to safeguard themselves financially.
“It is also important for consumers to know that there are different options to keep in mind when choosing cover for a luxury or high-end device, and make sure that they fully understand the terms of their particular cover.”
How to choose the right insurance
Loots explains that consumers should start by determining whether their insurer will cover the device on an unspecified basis, or whether the device needs to be specified at an additional cost.
“Including one’s device on an unspecified basis can be the most cost-effective option, but it is important to keep in mind that the insurer might impose certain limits in the event of a claim. For example, the policyholder might only be able to claim a specified percentage of the total cost for any one item. It is not uncommon to only be able to claim 25% of the value that you are insured for on an unspecified basis for any one item.”
He adds that a policyholder also needs to understand whether a device is covered under an indemnity or replacement policy.
“An indemnity policy will repay the client the purchase value of the device in cash. A replacement policy may be the better choice in certain circumstances. If the retail price of the covered device increases, or if the device becomes obsolete and needs to be replaced with a newer model, the insurer will then pay the amount required to buy a new device at the current retail value.”
Proper risk management
Loots says that proper risk management is always important.
“An insurer will want to know that the policyholder did everything in his or her power to avoid losing the insured device. With this in mind, keep the device on you as much as possible, do not leave it in plain sight when using it in public spaces and never leave the item in clear view in an unoccupied vehicle. It can also count in your favour if you use a phone cover and screen protector to minimise the risk of damage.”
Lastly, Loots points out that receiving the right advice about which policy to choose, can prove to be incredibly valuable.
“Having to replace a R15 000 or R20 000 device out of one’s own pocket is a major loss, and consulting a knowledgeable broker on the available insurance options, may prove to be one of the best financial choices that one can make,”
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