Today the FCA (Financial Conduct Authority) found evidence of unclear terms, poor product design and inadequate claims and complaints handling according to their review published looking into mobile phone insurance. They concluded that while mobile phone insurance can be very useful, it warned insurance policies need to provide the level of protection they purport to promise and effect fair claims procedures. The Financial Conduct Authority reviewed the practices of nine firms that have a majority share of the mobile phone insurance market and discovered that some firms were not always diligently thinking through why numbers of claims were being rejected and therefore not feeding that back into re-designing and streamlining their product design process. Some products were clearly not always designed to meet the needs of consumers – the majority of policies promised to cover loss – but in reality often did not cover instances, for example, where the customer accidentally leaves their phone somewhere. Descriptions of what is covered and what is not were ambiguous along with of inadequate claims and complaints handling, the report said

The FCA suggested firms adopt clearer terms and conditions, remove the two-stage claims process (where a claim might be initially rejected but where the customer is persistent and complains this is then sometimes overturned, much to the annoyance of both the customer and the Ombusdman)
The Financial Ombudsman has also revealed it tackled 615 new complaints about mobile phone insurance in the last financial year, and in seven out of 10 cases found in the favour of the consumer.

Typical complaints include, poor suitability to cover, mis-selling, onerous terms and conditions in relation to claims and changes to policies – typically this type of complaint came from policyholders who assumed that their policy would automatically update when their mobile phone was upgraded, only to find that it didn’t when they came to claim.

The Financial Conduct Authority’s director of supervision, Clive Adamson, said: “What this review shows is that sometimes there is a gap between what the customer thinks they are getting, and what they are really getting. Closing this gap will lead to greater trust and confidence. “We have begun communicating the findings to the firms that took part in the review and they are making improvements. Mobile phone insurers need to continue in this vein and show their customers that they are putting them at the heart of their business models, and offering everyday insurance products that do what they say on the tin.”

The prudent customer would diligently ensure that their policy met there own standards including policies that there is an assumption that “all risks ” are included such as on some cheap let property insurance or a cheap unnoccupied insurance that would cover mobile phones but this is never the case.