Take Caution When Choosing Cell Phone Insurance

"Estimates indicate that almost 1 in 4 phones in the United States will be lost, stolen or damaged over the next twelve months" This is the first line on the FAQ page of the National Cellular Owner's Association (NCOA) website. The next sentence says "Protect yourself from the cost of replacement of a lost or stolen phone, which can cost you up to $350.00." What many customers of NCOA and other third party cell phone insurance companies are finding out is that they may need protection from their protection.

When purchasing a cell phone online you'll like find that you are likely to get a better deal not buying from a cell phone service provider directly but rather a broker-dealer that can offer you the lowest priced choice from a number of cell phone service providers like Verizon, T-Mobile, or Sprint. With broker-dealers you have the ability to compare pricing, features, and other options between different cell phone service providers and choose the company, plan, and phone that bets suits your purpose. Cell phone insurance from a third party company will be most likely offered at the time of purchasing your phone at a one time charge as opposed to a monthly charge when you are insured through your cell phone service provider direct.

What's the difference between direct cell phone service provider coverage and coverage from a third party? On the business end of things cell phone broker-dealers often have contracts with third party insurance companies and earn commissions when a buyer buys protection from them rather than direct from the cell phone service provider itself. Third party companies only charge a one time fee to cover you where as coverage provided by your cell phone company is billed monthly. Coverage time from third party companies only last for a limited time, most likely a year or less, where as your monthly paid coverage through your cell company lasts as long as you're paying the monthly fee. The big difference comes when its actually time to use your cell phone insurance.

We're going to pick on NCOA for reference from here on. From my own experience and viewing many complaints of others it might be much more difficult dealing with third party cell phone protection companies when your phone is damaged, lost, or stolen. NCOA for instance, has had over 150 complaints in the last year with the Better Business Bureau and more than 300 in the last 3 years. Complaints range from NCOA denying just about every claim to not responding to customers at all, and/or sending nonworking phones as replacements. In my case my claim was denied after I reported my phone lost (and most likely stolen) after a night at the movies. Their reason for denial was that my phone was lost due to "unexplained loss/negligence".

How can you avoid this disaster? The best way is to always do your due diligence and research the company for complaints and the details of the coverage like what is covered, not covered, and how long does the coverage last. Another point is to find out the procedure to file a claim and make sure you can talk to a person. Most third party companies like to avoid person to person contact making it easier to take your money and run. If you find yourself denied service by a third party coverage company try to get in touch with a live person at the company's office. It may take some digging buy they know if you're willing put in the effort to find them, you're probably willing to do everything in your power to get what you're claim handled or your money back. If that doesn't work you can file a complaint with the Better Business Bureau and/or pursue a lawsuit. If you are able to get a hold of a real person be sure to let them know that you are planning take further actions if they continue to refuse your claim.

In my case, after doing a considerable amount of digging I was able to get a rep on the phone. I was actually shocked when the rep told that a replacement phone had been ordered and should reach me in a few days. I made sure to get her name and it turned out to be the same rep that sent me the email denying my claim. Not only that, to my delight a day later I received an email from the company stating that my claim was approved and my replacement phone will be arriving. I'm left thinking back to a phone I lost before when I had Verizon service and protection. Upon reporting my phone lost I ended up paying a $50 deductible but I was able to speak immediately with a real person and without saying much I was assured that I would have a replacement within 2 business days (which I did). In conclusion you can derive to the fact that cell phone service providers want to keep your business while third party insurance companies want to keep your money.