Insurance: How credit card mobile device insurance works

In Quebec, the Office de la protection du consommateur reminds us that mobile devices (cell phones, tablets and laptops) are guaranteed by law on three levels:

• Warranty ;
• Reasonable warranty period (this varies according to the price paid, but should be valid for a period of two years);
• Warranty against hidden defects.

These protections concern the operation of the devices.

The retailer/manufacturer often offers to buy an extended warranty when purchasing the mobile device.

In the event of a faulty electronic device after the first warranty period has expired, this warranty provides for repair, replacement or reimbursement of the device for a longer period.

But before we pay for it, we need to understand that we’re already covered for at least another year thanks to the OPC’s legal warranty (reasonable duration).

Before accepting this extended warranty, ask the seller these questions:

• 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?

Your homeowner’s or tenant’s insurance policy covers your property. Check whether your electronic/computer equipment is included and what amount or percentage is covered.

Often, when we go out and have an accident with our device, it can be protected against theft, breakage or loss by home insurance.

The cost of insuring them is estimated at between $2.50 and $4 per $100, depending on the deductible. So, we estimate that it costs between $25 and $40 for a $1,000 laptop. This amount is added to the cost of the home insurance policy.

The main disadvantage of this insurance is that after a claim that counts as a “loss”, the premium can increase the following year.

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Some credit cards in Canada offer mobile device insurance. Some credit cards even come with no annual fee!

One of the advantages of these credit cards is that they double or even triple the manufacturer’s warranty:

• The purchase of the smartphone, tablet, computer has been charged in full or is paid by recurring pre-authorized payments with the supplier, on this credit card;
• The credit card is still active at the time of the claim.

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

At last, there’s inexpensive coverage for property damage, like when you forget to take your cell phone out of your pocket before getting into the pool. It generally covers up to a maximum of $1,000.

A few rare credit cards offer up to $1,500, such as :

• RBC Avion Visa Infinite Card
• RBC^® Avion^® Visa Infinite Privilege* Card
• TD^® Aeroplan^® Visa Infinite Privilege* Credit Card

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

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

All Desjardins credit cards 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 purchase protection (180 days), but the extension tripling the coverage period still applies to mobile devices.

The vast majority of us own expensive mobile electronic devices such as cell phones, tablets and laptops, which we are keen to protect against loss, minor accidents, theft and breakage.

For the first year, legal, manufacturer and credit card warranties are sufficient. But for the rest, credit card mobile device insurance, like that on the National Bank Mastercard, is very practical because it’s so easy to claim. The NBC mycredit Mastercard or the Tangerine World Mastercard can be interesting, especially as they cost nothing in annual fees!