Johannesburg - Did you sign up for the cellphone insurance you were offered when you got a new phone with your “upgrade”?
And do you know the insurance policy will “pay out”only if the original SIM was in the phone at the time it was lost, stolen or damaged?
If not, you are by no means alone. Perhaps you didn’t read the small print of your policy document – many consumers are guilty of that.
But often those terms and conditions aren’t worded in a way that can be easily or fully understood by the average consumer. Or printed in a way which is designed to catch the eye.
I put this to Vodacom recently while investigating a case, and went as far as suggesting a better way to word that all-important disclosure about the need for the SIM card to be “married to” the contract phone.
I’m happy to report that the network has listened. First, some background…
A businesswoman, a longstanding Vodacom subscriber with several contracts, acquired a Samsung smartphone when upgrading one of her contracts. She accepted the consultant’s offer of Vodacom’s cellphone insurance, and not long afterwards the phone was stolen out of her bag in a shopping centre.
She duly claimed on the policy, but Vodacom Insurance, administered by Cellsure, had bad news – her claim was rejected because the original SIM, issued with her contract, was not in the smartphone at the time of the theft, as required by the policy.
Soon after getting the smartphone, she realised that she preferred her old handset as her primary phone. But she couldn’t simply remove the SIM from the smartphone and pop it into her old Nokia, as the Samsung takes a micro SIM and she needed a regular one for her old Nokia.
She insisted that no one in the branch explained the insurance implications to her when the SIM swop was being done.
Essentially, and this is true of all cellphone insurance policies offered by the networks, if you put a SIM from another network into your phone to get better reception in a certain area, for example, or you do what that businesswoman did and permanently put another SIM – even with the same network – into your phone, the phone won’t be covered if it’s lost, stolen or damaged.
Vodacom’s executive head of media, Nomsa Thusi, said it was standard practice in the cellphone insurance industry to insure the handset “together with the SIM card which is listed in the contract”.
“For a claim to be valid,” she said, “the listed SIM must be in the cellphone at the time of loss, damage or theft.”
Apparently, this is to mitigate the risk of fraud, since the network is able to track the location and the activity on the lost SIM card and cellphone. “Being able to track the cellphone helps to reduce the underwriting risk,” Thusi said.
If the cellphone was not linked to the SIM card, the risk would increase, which would increase the insurance premium. And so to the issue of declaration. When the businesswoman took out the Vodacom handset insurance policy, the following was included in the policy document, high up but not in a manner which stood out: “This product covers theft or sudden and unforeseen physical loss or damage to the handset used together with the SIM card listed on the attached schedule during the period of insurance.”
At the time, I voiced the opinion that the warning could be made a lot clearer, if put in capitals and worded something like: “Insurance cover valid only if the listed SIM is used in the handset.”
The businesswoman’s claim was subsequently paid out as a goodwill gesture, “based on her longstanding relationship with the network”.
I thought that was the end of it, until I heard by chance that the wording of the Vodacom Insurance clause had been revised.
Right at the top of the new policy document, in capital letters, the following now appears: “It is very important to note that: your insurance cover is only valid if the listed SIM is used in the insured handset at the time of loss, damage or theft.”
That’s more like it. Well done, Vodacom.
Oh, and the network recently started sending SMSes to customers when they sign up for the insurance cover, to reinforce the message. - The Star