Details about Device Protection Insurance on Canadian Credit Cards. Everything that you need to know!
Simple Money Podcast – Canada’s Own Personal Finance Podcast
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Another Brand New Episode!
Hello and welcome back to Simple Money Podcast, Canada’s own personal finance podcast about those burning questions that are important to you and your family. I’m your host, Matthew Siwiec, also known as the friendly financial coach.
Today we cover a topic that’s often asked about – which is about an insurance that many people don’t even know that they may have…This topic, mobile device protection insurance on credit cards.
What is Device Protection Insurance?
The fairly new insurance coverage applies to Smartphones, tablets, and select cellphones in cases of loss, theft, and accidentally damage. Coverage is also worldwide, so are eligible to be reimbursed if your phone is accidentally damaged or stolen during a vacation.
A growing number of premium credit cards are beginning to offer this helpful feature and it’s helpful to understand the fine details of the plan if it applies to you or if may apply in the future. One of the biggest conditions is that devices are only covered if they are fully purchased on the credit card or when all or any portion of the purchase price is financed through a wireless provider on your card.
When Does Coverage Begin?
Coverage begins either at – 91 days if you fully purchase the device or when the first transaction is charged if the device is paid through a wireless provider. This coverage then ends on the earliest of
- Two years from the purchase date or date of first transaction
- Date that the credit card is no longer in good standings
- Date that policy is terminated
- Or date when a regular transactions are no longer charged by the wireless provider before it’s the device is fully paid.
How Much Could You Receive?
So how much can you actually receive if something happens to your device? If the device is stolen, the you are paid the full purchase price with taxes minus a depreciated amount and a deductible. Up to a policy maximum of amount $1,000 to $1,500.
The depreciated value is the purchase price after taxes multipled by 2% – which is then multiplied by the number of completed months since your policy began. The amount after depreciation is then reduced by a 10% deductible.
So for example, you purchased a new iPhone XR 12 months ago and paid $1,163 after taxes. Unfortunately, your phone was stolen from your bag on the way home from work. The depreciation would be $279, meaning that the depreciated device value would be $884. The Replacement amount would be $796 after the 10% deduction is removed. So that is the most that you can receive.
In cases of repair, the amount provided depends on the policy that you have. Some allow repair costs to not exceed the depreciated replacement amount, while other will allow the full repair cost minus 10% deduction. If you broke the glass back of that hypothetical iPhone, you would receive $180 provided for a $200 repair with a 10% deductible and the full $200 if the policy has no deductible.
Device Protection Exclusions
The insurance policy has a quite a few exclusions and it’s important to make sure that you’re eligible before you make a claim. Some of the common exclusions include
- Damage from wear and tear
- Damage to batteries
- Exclusions of refurbished or resold devices
- Situations where a device is stolen from a bag that is not hand carried and under direct supervision
- Devices lost under mysterious circumstances
Also, policies typically limit one claim every 12 months and 2 every 48 months.
Making A Claim
To make the claim itself it’s very important that you follow the steps listed in your policy contract and fill out the appropriate paperwork. For example, typically the insurer must approve any repair or claim before you proceed with it. Anyone making a claim must contact the number in the insurance policy as soon as possible.
Often you will need to report any damage within 90 days of the instance and provide a receipt from a qualified repair location.
In cases of loss or theft, you also immediately need to contact your service provider and police.
So that’s it for today, thank you so much for joining into our podcast today. If you’re enjoying the show, you can support the show by rating or sharing the show with anyone that you may think that it will benefit.
You can also contact me at firstname.lastname@example.org or find me on Twitter at F_FCOACH Take care and talk to you soon!