How a wrong SIM card could cost you your insurance claim

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Your cellphone may be your bank, photo album, social lifeline and connection to the world — but having insurance does not automatically mean you will be paid when it disappears.

Consumers are being warned to check that the correct SIM card is linked to their insured cellphone, as using another SIM could result in a rejected insurance claim. The National Financial Ombud Scheme (NFO) says most of the complaints it receives about cellphone insurance involve claims rejected because the device was not being used with the specified SIM card.

Cellphones can be insured through a standalone policy or under a household contents policy. Most standalone cellphone policies cover the device only when it is used with a specified SIM card. This helps prevent fraud by allowing insurers to reject claims for devices that may not actually have been lost.

Standalone policies can also have lower premiums because the cost of the device is subsidised by the network provider.

The Regulation of Interception of Communications Act (Rica) requires SIM cards to be formally registered to a verified person’s identity and address.

But consumers can easily fall into trouble if they change SIM cards, replace their phones or fail to understand the conditions of their policy.

The NFO’s lead ombud of the non-life insurance division, Edite Teixeira-McKinon, said an insurer cannot simply reject a claim because the wrong SIM was used. The insurer must show that the consumer was told about the requirement before the policy started and that the phone was not being used with the specified SIM card.

“In a matter dealt with by our division, the complainant submitted a claim for a tablet that was snatched from his toddler through an open car window. The insurer rejected the claim on the grounds that the SIM card was not blacklisted after the robbery,” Teixeira-McKinon said.

The complainant said he had not been told when the policy started that the SIM card had to be registered in accordance with Rica. There was also no SIM card in the tablet because the toddler used it only through wi-fi. Because the SIM card was not registered under Rica, it could not be blacklisted.

“The insurer acknowledged that the SIM card could not be blacklisted due to the complainant’s unique usage of the tablet and agreed to abide by the NFO’s recommendation to settle the claim,” Teixeira-McKinon said.

The warning does not stop with SIM cards.

Consumers who insure their phones under household contents policies must specify the device under the portable possessions section and pay the additional premium.

One consumer learnt this the hard way after her Huawei smartphone was stolen.

Her claim was rejected because the phone was not covered.

She had replaced her Samsung phone with the Huawei after taking out the policy but failed to tell the insurer to amend the policy, said Teixeira-McKinon.

“It was pointed out to the complainant that she had not brought the claim within the ambit of the policy wording by demonstrating that the stolen device was on cover,” Teixeira-McKinon said.

Consumers should also be careful about leaving their phones in unattended vehicles. Teixeira-McKinon said many policies exclude theft when a device is left unattended and the theft is not accompanied by force.

She warned consumers to regularly review their cover.