Mobile phones: FCA says almost impossible to claim for losses

mobile phone
Image caption Insurance policies for mobiles are often unclear

Making a successful insurance claim for a lost mobile phone can be virtually impossible, a financial regulator has said.

The Financial Conduct Authority (FCA) has found widespread poor practice in mobile insurance policies.

It said some policies were not designed to meet customers' needs, and some terms and conditions were "unclear and unfair".

The FCA said it would impose a fine on one insurance provider next month.

In one case it said an insurance claim was turned down because a customer knew where they had left their phone.

Another claim for a lost phone was rejected because a woman had left hers in a hotel room. Since she had checked out, that was deemed to be a public place, which was excluded from cover.

"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," said Clive Adamson, the FCA's director of supervision.

Clearer policies

In total there are more than 10 million such policies in existence in the UK, making it one of the most popular insurance products.

In its review of the nine biggest providers of mobile phone insurance, the FCA found that:

  • some firms were not thinking through why so many claims were being rejected
  • products were not always designed to meet customers' needs
  • policies were designed to cover loss, but in practice did not cover instances where customers leave a phone somewhere accidentally
  • descriptions of cover were too broad and ambiguous

The FCA said that the firms involved had already agreed to make changes to their policies.

They have promised to be clearer about when and where consumers are covered.

They have also agreed to handle claims faster, and to increase the amount of time customers have to make a claim.

"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," said Mr Adamson.

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