You’re buying a new smartphone, an expensive pair of glasses, or a laptop – and you’re offered insurance when paying or in the online store. When does it make sense, and when not?
Whether taking out additional insurance cover makes sense depends strongly on your individual circumstances and your existing insurance coverage. Even if you are offered insurance when buying something, you do not need to decide immediately. Insurance on devices can frequently be taken out separately to when buying a product. Take your time and before signing up for insurance, check whether the insurance matches your needs.
In particular, consider the following points:
What kinds of damage are insured?
The insurance cover level may vary strongly. While some insurance only cover devices being dropped, breakages and water damage, others also cover theft or technical defects. However, there is no “all-in-one” package.
TIPS:Pay particular attention to what cover excludes – insurance often excludes wear and tear or scratches. In addition, in the event of a claim, there is often an excess amount to pay. Some types of damage are often covered by your household insurance or other insurance products held.
Ask for a copy of the insurance conditions before concluding the contract, and for an explanation about the most important benefits, exclusions from cover as well as excess amounts. Also check what kinds of damage you already have insured.
How long am I bound to the contract for?
After you have had a device for a certain length of time, it no longer makes sense to insure it.
TIP:Check how long the insurance contract runs for, as well as how you can cancel it. Some insurance policies can be cancelled from one month to the next, whereas others run for several years, or are automatically extended if you fail to cancel them in time.
Do I actually need insurance?
Where a device is faulty, statutory warranty claims or a manufacturer’s guarantee may exist.
TIP:Check whether the risks that you wish to insure yourself against are not already covered in another way.
How much does the insurance really cost?
Particularly where the monthly premiums is reasonable, costs can mount up over the term of the contract.
TIP:Compare the total costs of the insurance with the value of the device that is insured.
Who do I contact when making a claim?
Even if you signed up for device insurance when buying a device, the retailer is usually only an intermediary. Depending on the insurer, you either register the claim directly with the insurer, the retailer, or through a service centre. The contract documents contain the steps to be taken when making a claim.
TIP:Find out who you need to contact for reporting a claim when you take out the insurance coverage!
Find out more:
A-Z of Finance: www.fma.gv.at > A-Z of Finance
Instagram: @redenwiruebergeld
Podcast: listen here!
Premium:
the amount you pay for your insurance cover. Depending on the contract, the premium is paid monthly, quarterly or yearly.
Exclusion from cover:
kinds of claims that the insurance does not cover. If such damage occur, you do not have any claim for an insurance benefit.
Excess:
The amount you have to pay yourself in the event of a claim.
Insurance intermediaries:
facilitate taking out of insurance, but are not the insurers themselves. They are required to hold a business licence for this brokerage activity, and are not subject to FMA supervision.