Gadget owners in Ireland who purchase corresponding insurance are being provided inadequate information, the country’s Central Bank has revealed.
The financial services regulator, which conducted not only research but also a thematic inspection, found that buyers of gadget insurance are not sufficiently informed both at the point of sale and during the life of their policy, which can be up to five years. This finding runs contrary to the Central Bank’s expectation that firms offering this coverage are providing consumers annual statements so they are aware of their premiums, the policy’s benefits and exclusions, and how to make a claim.
Three gadget insurance firms, which account for over 80% of the Irish market and distribute policies through brokers and retailers, were inspected.
“With the Christmas shopping period well underway, many people will be making practical decisions to buy gadget insurance for their new phones,” commented Gráinne McEvoy, director of consumer protection at the Central Bank of Ireland. “Our inspections and consumer research show that there is a gap between what most consumers believe their gadget insurance covers and what it actually covers.
“As many consumers buy this type of insurance as an add-on when buying a new mobile phone, it is really important for sellers to ensure that the product they sell meets the consumer’s individual needs. Sellers of gadget insurance must also be very clear to consumers about the product terms, cost, conditions, and limitations and inform consumers that they have a cooling off period if they subsequently decide that they do not want to keep the insurance product.”
The watchdog’s research also found that 21% of consumers do not cancel current policies after taking out a new one. It said those who offer gadget insurance are required to consider any relevant existing cover when recommending a new policy to a consumer.