"Insurable Interest" and IPhone Contract

[rayray]

Hi!

Wondering if anyone has had a similar issue to this. I upgraded my iPhone in February and like most normal people am paying off the balance of the handset in monthly installments along with my service charges.

My phone was stolen last week and when I tried to make a claim under renter's insurance they told me that they would only pay out my insurable interest in the device, i.e. what I have paid off so far, around $40 (my deductible is $250). Obviously I did not proceed with the claim.

Maybe I'm wrong but this strikes me as especially shady. If my house that I have a mortgage on burns down, do I only receive what I paid off my 30-year mortgage so far? I am still liable to the phone company for $700 so it's not as if they even retain an insurable interest in the device.

Any thoughts/comments appreciated -- just trying to wrap my head around this.

Thanks!

 

[Tkruger]

First off why didn't you have the insurance offered by the carrier?

Secondly renters insurance has nothing to do with homeowners insurance. Renters insurance covers items in the residence while Homeowners insurance covers the structure or home itself.

Generally if you had opted for the carrier provided coverage then it would be a moot point...pay the $ 100 and get a referbed phone and continue making your monthly installments.

 

[scagnt83]

Renters insurance is not phone insurance and its not home owners insurance.

Also, some renters policies cover "actual value" of what you originally paid out of pocket... and others cover "replacement value" of what it actually would cost to replace that item.

It sounds like you have an "actual value" policy. So they are only going to reimburse you for what you paid out of pocket. If you had a "replacement value" policy, then it would likely pay for the actual cost of a refurbished iphone of the same model.


Also, if you have a mortgage and your house burns down you do get the full value for the house.... but you have to use those funds to then pay off whats left of the mortgage to the bank. So after its all said and done you walk away with your equity.

If you had actual cell phone insurance it would be totally replaced. If you are unable to afford to pay in cash then I would suggest going with a refurbished or used phone... or last years model. Also, anytime you buy something on a payment plan you better be certain that the item is FULLY insured OR that you have the cash in the bank to pay it all off plus buy a new one. Especially when it is an essential item.


I would never ever do a payment plan for a cell phone. For personal items that are under $5k, if you cant afford to pay cash then you cant afford it period. jmho

 

[InsCommentary]

For most carriers, a "renters" policy IS a type of homeowners policy. The ISO HO program includes forms 2, 3, 4, 5, 6, and 8. Form HO 00 04 is a tenant's policy.