Cellphone retailers often offer cellphone insurance as part of the sale or upgrade of new devices, and it can be very useful if a consumer’s expensive new device is stolen or damaged.
However, the terms and conditions of the policy document can be very complex, and the material aspects of the policy must be explained to consumers. A lack of transparency can result in consumers not fully understanding the coverage provided by their policy, leading to problems during the claim stage.
In a case dealt with by the FAIS Ombud, the Complainant, Ms S, had her insurance claim rejected due to the insured device not being used with the listed SIM card.
In rejecting the claim, the insurer specifically relied on the following clause in the Terms and Conditions in the policy wording:
SPECIAL NOTE APPLICABLE TO ALL SECTIONS OF THE POLICY:
“It is important to note that the MOBILE DEVICE is only covered whilst being used with the SIM CARD encoded with telephone number listed on your Schedule. The policy allows for up to 2 (named service provider) numbers to be listed on the Schedule. Either one of these listed numbers must be used in the insured device at all times. You can change your cell phone number at any time, but the MOBILE DEVICE will only be covered if your broker, XYZ (Pty) Ltd has been notified of the change.
Failure to comply with this condition renders the claim ineligible for coverage, as stated in the terms and conditions.”
The complainant stated that she specifically disclosed to the consultant during the device upgrade that her son would be using the new device with a different SIM card. She emphasised that she was advised and reassured by the consultant that the device would remain insured.
After an investigation by our Office, the insurance provider agreed to reverse their decision to reject the claim. Considering the circumstances surrounding the client's device upgrade and the advice provided by their consultant regarding SIM card usage, the Respondent agreed that the claim should be honoured.
We urge all consumers to thoroughly review their insurance policies and understand the requirements and applicable conditions. If there are any areas they don't understand, they can contact their insurance provider for clarity.
Should you believe that you have been financially prejudiced because of the financial service rendered to you with respect to a regulated financial product, please lodge a written complaint directly with the service provider. If the complaint remains unresolved after six weeks, you can visit our Complaints Portal at www.faisombud.co.za and select ‘Lodge Complaint’. Alternatively, you may submit a complaint in writing to info@faisombud.co.za. You can also call our Client Care Centre at (012) 762 5000 or Sharecall at 086 066 3274 for assistance in submitting a complaint.
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