Insurance: How credit card mobile device insurance works

First, let’s remember that in Quebec, the Office de la protection du consommateur informs us that mobile devices (cell phones, tablets and laptops) are guaranteed by law on three levels:

• normal use warranties;
• reasonable durability warranties: this varies according to the price paid but should be valid for a period of two years. However, the claims process is sometimes difficult.
• warranties against hidden defects

These protections concern the operation of the devices.

The manufacturer often offers to purchase an extended warranty following our purchase.

If the electronic device becomes defective after the first warranty period has expired, this warranty provides for the repair, replacement, or refund of the device for a more extended period.

But before accepting, let’s think about it. Aren’t we already covered for at least one more year with the legal (reasonable length) warranty of the OPC?

Let’s also ask the seller the right questions. For example:

• Is there a deductible to pay?
• Does the warranty include parts AND labour?
• If it can’t be fixed, will it be replaced?
• Does the extended warranty come into effect at the same time as the basic warranty (payment of the extended warranty unnecessarily) or when the basic warranty expires?
  

Whether we are homeowners or renters, we have home insurance that covers our physical assets. Did you check if your electronic/computer devices were included?

If so, how much is covered? And are the items covered outside your home? You know, when we go on a trip, whether we choose a hotel or a tent, our cell phones follow us.

If your devices are not covered, have you asked yourself how much it would cost to protect them in case of theft, breakage or loss?

We estimate the cost of insuring them to be between $2.50 and $4.00 per $100, so between $25.00 and $40.00, say, for a $1,000 laptop. This amount is added to the cost of the home insurance policy.

Finally, what is the deductible you will have to pay on your insurance policy before you can replace or repair your device?

I went back and reread the terms of my insurance policy. No problem, I’m covered for my mobile devices, but only for a third of the cost if the event occurs outside my home. Also, my deductible is $300 and a claim would count as a “loss”, which would increase my policy fees the following year.

We must consider it carefully. Let’s take a look at credit card mobile device insurance.

Most credit cards in Canada come with mobile device insurance. Even some credit cards with no annual fee.

Some credit cards offer, among their benefits, to double and even triple the manufacturer’s warranty as long as:

• The purchase of the smartphone, tablet, or computer was charged in full to this credit card
• The credit card is still active when claims are made

In addition, most purchases are protected against theft and property damage for 90 to 180 days.

At last, there is good coverage for property damage such as coffee spilled on the precious object, at low cost. It usually covers up to a maximum of $1,000 and is quick to use.

Here is a selection of credit cards in Canada, with or without an annual fee, that explicitly offer Mobile Device Insurance:

• American Express Cobalt^® Card
• NBC mycredit Mastercard
• CIBC Aventura^® Visa Infinite* Card
• Tangerine World Mastercard

You should also know that all credit cards offered by Desjardins offer this coverage.

Attention: check the exclusions in your credit card insurance contract. For example, for the National Bank World Elite Mastercard, mobile devices are excluded from the purchase protection (180 days), but the three-fold extension of the coverage period still applies to mobile devices.

Mobile devices such as cell phones, tablets and laptops are items that a large majority of Canadians own. We have bought them at a high price and hold them as dear as the apple of our eye. However, they are not immune to loss, theft and breakage.

We have reviewed the various protections and insurances that exist and conclude that the legal warranty, the manufacturer’s warranty and the credit card warranty, all free of charge, are sufficient for the first year following the purchase of the device.

The mobile device insurance of the credit card with which the item was paid seems to be the best option to take over afterwards because of how easy making a claim is vs. the legal protection. And it lasts for one or two+ years, depending on the credit card.

So it may make sense to have the right credit card on hand (and why not a no-annual-fee credit card on which you make your mobile device purchases)! The National Bank Mastercard may be of interest for this purpose.