When Mumbai-based Gautam Raiker purchased a new mobile phone in April, he also purchased insurance with it. The insurance was from New India Assurance Company, the largest general insurance company. The cost of the phone was Rs 12,000 and the premium for the insurance was Rs 1,500 for a year. Since the insurance was sold by the store from where he purchased the phone, documentation was easy. Besides, it was not very expensive. "As I had lost my previous phone, I thought it was a good idea to purchase insurance," he says. Unfortunately, Raiker lost his second phone too within three to four months. It was stolen while he was travelling in the bus. When he went to the store to claim insurance, he was told that along with the claim documents, he would have to submit a copy of the police complaint. But filing a police complaint proved very difficult. "The police refused to file a complaint saying the mobile was stolen. They asked me how I could prove that it was stolen. Instead they just gave me a letter saying the phone was misplaced. But this was not accepted by the insurance company. After that I did not purse the matter," says Raiker who has since then moved to Pune. In another incident, a customer purchased a mobile worth Rs 14,000, which also included the insurance cost of Rs 1,500 from National India Insurance Company, another public sector general insurance company. Here, too, the insurance was bundled with the phone. When the screen developed a crack, he tried to claim accidental damage. But he was told to first get the phone repaired at an authorised dealer and submit the bill to claim reimbursement. And he would get only 50 per cent of the value, because depreciation would get deducted. "Repairs at an authorised dealer would cost about Rs 7,000 while another store was willing to do it for around Rs 3,000. So, now I am wondering if it makes sense to claim insurance," says the customer. As the penetration of electronic gadgets like mobile phones, tablets and laptops increases, insurance for such products is also catching on. In some cases, the store may insist that the gadget cannot be purchased without the insurance, while some offer it as an option.
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Also, they are available only for new products, not second hand ones. For this insurance companies have tie-ups with retail stores. "Between the time of purchase and the customer coming to us for purchasing insurance there could be some damage to the gadget. Since it is a small ticket item, there is no point in getting it inspected. So, we insist on the insurance being purchased with the gadget," says an official from New India Assurance Company. The premium depends on the coverage offered - damage, theft or both. It is calculated as a percentage of the gadget. "Currently, the policies are sold only with gadgets sold at physical stores, though we are receiving enquiries for gadgets sold online. Going ahead we may tie-up with online retailers as well," says the official from New India. Coverage You can claim insurance if your gadget:
- Suffers accidental damage and such damage causes the gadget to stop working
- Fails to work because accidentally fluid has entered its internal circuitry, resulting into stoppage of the insured equipment.
- Is stolen in burglary including theft and housebreaking
- Is stolen from a locked building/room/vehicle
- Is damaged due to fire, lightening and explosion.
- Is damaged by act of god perils
- Suffers damage or theft during riot, strike and malicious damage
- Mysterious disappearance
- Theft from unattended vehicles, except from fully enclosed car that is securely locked
- Theft, loss or damage during the hire or loan to a third party
- Mechanical and electronic breakdown or derangement
- Overloading and experimentation involving imposition of any abnormal conditions
- Damage by wear and tear, vermin, atmospheric or climatic condition or gradual deterioration, inherent defect or from any process of cleaning, repairing or maintenance
- Loss or damage due to war or nuclear perils, loss by water or from any water borne craft
- Intentional or willful act of the insured party
- 0 to 3 months-20 per cent
- 3-6 months-30 per cent
- 6-12 months-50 per cent
- In some cases the depreciation can be as high as 75 per cent," the official from New India says.