Optus has started offering insurance under the Optus Yes Cover banner for your precious gadgets, but does it make financial sense?
Gadget insurance is nothing new, but Optus Yes Cover, on the surface, takes a slightly different approach to most, with a no-contract month by month payment of $13 covering theft or accidental damage on an international basis. You do have to be an Optus customer covering Optus supplied devices to pay for Optus Yes Cover, however, which means that Optus is already making money from your tablet or smartphone in a contract sense.
So let’s crunch some numbers over a two year contract with Optus Yes Cover. Obviously if you’re massively accident prone it could pay out no matter what you do, and equally if you’re the very careful type you might end up paying two years of premiums for absolutely nothing at all. Let’s assume for the sake of argument that you drop and shatter your phone exactly once in that period.
There are some limitations to making a claim — you’ve got be in good credit with Optus in relation to your ongoing phone contract, and you’ll have to wait for a couple of days for a replacement handset — but there’s also the issue of the combined monthly payments and the excess fee, which for damaged devices is $50. When your device is damaged, you’ve also got to return it to Optus as part of the T&Cs.
As always, it pays to read the fine print for Optus Yes Cover, because there’s a number of situations where you might think your device was covered, only to find that it’s not. From the product disclosure statement, here’s the specific exclusions:
This Policy will not cover you for any of the following:
(a) Loss or damage to Insured Equipment caused by fire;
(b) Loss or damage as a result of mechanical breakdown or failure to the
Insured Equipment after two years after the original purchase date;
(c) Loss or corruption of any data or software stored within the Insured
Equipment resulting from any cause whatsoever;
(d) Loss of use or consequential loss (including but not limited to
expectation or profit loss, and even if such losses arise naturally,
according to the usual course of things) of any kind;
(e) Damage to Insured Equipment due to improper or abnormal use, any
process or while actually being worked upon and resulting therefrom,
including but not limited to unauthorised repairs;
(f) Wear and tear, gradual deterioration or inherent vice of Insured
Equipment;
(g) Marring or scratching of Insured Equipment;
(h) Loss or damage to Insured Equipment due to lawful seizure, including
repossession or other operation of law;
(i) Loss or damage to or malfunction of Insured Equipment where no
actual known and identifiable event can be ascribed to causing the
loss, damage or malfunction.
(j) Loss or damage to any Insured Equipment which has had its serial
number label removed, defaced or altered;
(k) Loss or damage to Insured Equipment arising from any intentional
act by you or anyone acting as your agent; and
(i) Insured Equipment for which you cannot produce proof of purchase.
I never knew that smartphones and tablets could have “inherent vice”, but that’s insurance speak for you. Also, steer clear of fires, and don’t have “unauthorised” repairs done. I wonder who decides what’s authorised or not?
Still, let’s do the sums and presume that your single accident wasn’t excluded from coverage.
Over two years, you’d pay ($13*24)+$50 for a replacement device under Optus Yes Cover for a total of $362. If your phone gets stolen the excess fee jumps up to $150, which gives you a total minimum of $462.
There’s no specified devices that are or are not covered, and that’s arguably the real crux of the value proposition with this particular policy, because it very much depends on the value of the device or devices you’re covering. If you’re heavily in the Optus camp when it comes to phones and tablets there’s some pretty clear value potential here, because even a single iPad Air 2 replacement would cost you quite a bit more, although it’s sketchier if you’re talking cheaper low-end devices.
The other observation to make is that if you’re already paying for some kind of personal insurance, it’s well worth checking what is and isn’t already covered. That’s especially true for travel insurance, which often covers personal effects while travelling.
Technology is always an interesting proposition depending on your insurer, and naturally making any kind of claim will probably see your premiums rise in the following year, but if your existing policy does cover your gadgets in the places where they’re most likely to be damaged then it might not make much sense giving Optus $312 or more just for the sake of it.
Source: Optus via Gizmodo