A few years ago, you probably wouldn’t have heard too much about insuring your cell phone. But as the cost of smartphones has increased, many people are now looking for ways to protect their devices. Fortunately, credit card providers have recognized that mobile device insurance is something consumers are interested in.
Mobile device insurance will cover you in the event that your phone is lost, stolen, or damaged, but you won’t necessarily be reimbursed for the full amount you paid for the device. There’s depreciation to consider and a deductible to pay, which is why you need to understand what mobile device insurance covers you for how to make a claim and which credit cards offer this product
What you’re covered for
Currently, mobile device insurance covers you only up to a maximum value of $1,000. And, to be eligible, you need to pay for the device with a credit card that offers mobile device insurance. If your device is subsidized by your carrier (meaning you paid $0 upfront and are on a plan), then you need to pay your monthly cell phone bill with that credit card.
It’s important to note, too, that your mobile device insurance also doesn’t kick in right away. Your coverage takes effect after a certain number of days from the purchase date or after a certain number of billing cycles (whichever comes first). For example, your policy might state that your insurance applies from the later of 90 days from the date you purchased your mobile device or after your second billing cycle.
How to make a claim
When you make a mobile device insurance claim, you will need to pay a deductible. The deductible is based on either the purchase price of your phone or a set percentage e.g. it could be $25-100 or 10%. The amount you’ll pay depends on the credit card you’re using, which we’ll go over shortly.
As well, your phone will have depreciated since you first bought it (generally speaking, a phone’s value depreciates by about 2% every month), so the total depreciation amount will also be subtracted from the purchase price, and this will determine the final payout.
It’s important to read the details of your mobile device insurance. In some cases, you’re only allowed to make a certain number of claims in a set period of time. There are also limitations and exclusions to claims, such as batteries, used devices, and devices used for commercial purposes.
To make a claim, you need to let your cell phone provider know about the loss within 48 hours. If your phone was stolen, you’ll also need to file a police report within seven days. You’ll want to notify your insurer (credit card provider) right away when making a claim but you usually have up to 14 days to do so.
If mobile device insurance is important to you, you’ll want to take a look at the following credit cards that boast this feature:
The Meridian Visa Infinite Cash Back Card was the first Canadian credit card to introduce mobile device insurance and was likely the catalyst for other credit cards starting to add it as a standard benefit.
With the Meridian Visa Infinite Cash Back Card, your insurance kicks in the later of 90 days from the date you purchased your mobile device or when your second monthly wireless bill is charged to your account.
Depreciation is set at 2% per month for each completed month of service from the date you purchased your phone. The deductible is determined on a sliding scale based on how much you paid for your device less any taxes.
|Purchase price||Deductible amount|
So, let’s say your phone cost you $700 before tax and you’d had it for eight months when it got stolen. Your depreciation would be $112(2% X 8 months X $700) and your deductible would be $100 so you would be paid out $488 ($700 - $112 - $100).
You can read the Meridian Visa Infinite Cash Back Card insurance policy here.
The Scotia Momentum Visa Infinite Card recently went through some changes and added mobile device insurance as a standard benefit. What makes this card stand out from the rest on this list is the insurance kicks in after just 30 days from the date of purchase or when the first monthly statement is billed to your account.
The deductible and depreciation figures on this card are exactly the same as the Meridian Visa Infinite Cash Back Card so you can use the above chart for reference. The maximum value you can claim is $1,000.
You can read the Scotia Momentum Visa Infinite Card insurance policy here.
Rounding out our list of credit cards that offer mobile device insurance is the CIBC Aventura Visa Infinite Card. Like the above two cards, CIBC Aventura’s mobile device insurance has a maximum value of $1,000 but the deductible is determined a bit differently. Your deductible is based on 10% of the value of your phone after factoring in the 2% per month depreciation.
For example, if your phone cost you $900 before tax and you make a claim 10 months after you purchased it, here’s how your payout would break down:
$900 - $180 depreciation (2% X 10 months X $900) = $720. That’s what your phone is worth post-depreciation. So, you take 10% of $720 to get your deductible of $72.
$900 - $180 - $72, and you’d get paid out $648.