Insurance companies shying away from mobiles

Category: General | 1 Comment | Posted on May 7, 2006

If your phone is stolen or damaged, you may not be able to stake an insurance claim anymore. Because of the rising number of claims being raised on cell phones, insurance companies are now shying away from providing insurance cover on mobile phones.

Since it’s not always possible to verify the genuineness of the claim – and it’s allegedly quite easy to procure a false FIR from a police station – insurance companies are forced to reimburse claims for phones reported stolen or damaged, regardless of the actual fate of the phone.

I am quoting from a story that appeared last year, about Comptroller and Auditor General of India seeking probe into insurance for WLL services.

Insuring mobile phones used for WLL services of Reliance Industries and Tata Teleservices by the National Insurance Company (NIC) and the Oriental Insurance Company have come under attack from the Comptroller and Auditor General (CAG).

The CAG has said that NIC has run up claims of Rs 253 crore against a premium income of only Rs 89 crore, while Oriental Insurance Company, will have to shell out Rs 33.45 crore in claims.

Bajaj Allianz General Insurance’s earlier tie-up with BPL Mobile to insure mobile phones no longer exists and HCL Infosystems, which used to arrange insurance for Nokia GSM handsets, has discontinued its scheme. Other private insurance companies like ICICI Lombard and HDFC Chubb General Insurance don’t have any policies to insure mobile phones.

However, in the public sector, National Insurance (NIC), The Oriental Insurance (OIC) and The New India Assurance (NIAC) continue to provide insurance for cell phones. The policy provides cover against theft, damage, fire and accident among others.

Meanwhile, United India Insurance (UIIC) provides insurance only to select big clients or corporates on an accommodation basis. “We don’t encourage mobile phone insurance as it’s not a profitable venture.

But we provide such cover on a case-to-case basis to clients with whom we have a good relationship,

Comments

One Response to “Insurance companies shying away from mobiles”

1. Piyush Singhal
   July 8th, 2006 @ 12:07 pm

   I am a loss assessor. You are absolutely correct. The todays situation has arisen as the system which is curropt and unresonsive and has totally failed to protect the innocent citizens. We have been experiencing lot of problems while dealing in these claims. At the same time smart try to take advantage of this system. The purchase bills found bogus, the statement of insured is contradictory but the FIR is altogether in confirmation that phone is stolen. On top of all this there is no support from Mobile service providers. It is a known fact that every mobile phone has a IMEI number which gets flashed to the service provider once the phone is reactivated with new sim card. Thus there are fair chances of recovery of such stolen or lost mobile phone. When we tried to discuss this matter with the service providers there was no responce. They wanted us to check with the mobile manufacturer? Can you help on the matter as if such a service gets available the insurance industry would gladly be at the service to insure mobile phones.

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