At the close of a recent “girls’ night out,” a friend of mine made the horrifying discovery that her prized new smart phone had slipped from her purse into the ladies’ room toilet. What to do?!! While some of us would have sadly walked away, Jen retrieved it, took it home, and did something involving putting the phone into a bowl of uncooked rice and her microwave oven. (I assume that she also wiped it down with a gallon or 2 of sanitizer.) She claims that the rice absorbed all of the moisture and that her phone was saved. This sounds dubious to me and I would not recommend trying it at home. While that is one potential solution to the problem of ruining an expensive new cell phone, a more reliable approach is to have insurance coverage.
Many states have enacted portable electronics insurance regulation in the past year, including Maryland , Minnesota , Nebraska , West Virginia , Kansas , New Mexico , Oklahoma , Virginia and Arkansas . This coverage differs from the extended manufacturer warranty or service contract offered when consumers purchase a cell phone, laptop, GPS or portable media device at the big box store. Typically, under the terms of a Portable Electronics Insurance Act, insurance is offered to the consumer by a vendor authorized under the Act to hold a limited lines insurance license. At the time of sale or lease of the portable electronic device, the vendor must disclose information including the identity of the insurer underwriting the coverage, key terms and conditions of coverage, claims filing information, and a statement that the insurance purchase is not a requirement of the sale or lease of the device and that coverage may duplicate existing coverage under a personal homeowners’ or renters’ policy.
An insurer may write the coverage as a group or master commercial inland marine policy issued to the vendor with consumers as covered customers; consumers purchasing the coverage then receive certificates of insurance as covered customers. The insurer remains responsible for providing compliant consumer disclosures and supervising program administration, which must include a training program for employees and authorized representatives of the vendor.
The coverage may be cancelled upon request by the consumer but termination can be trickier if the insurer wishes to cancel prior to expiration of the policy period. Some statutes mandate an extended advance days’ notice period (60 days is common) before a midterm cancellation can become effective, with shorter notice periods permitted for reasons such as the customer’s nonpayment of premium, fraud or misrepresentation upon obtaining the coverage or submitting a claim, cessation of active service or exhaustion of the aggregate limit of liability under the policy (parents of teens will want to pay attention to this policy provision). Given consumers’ endless fascination with owning the latest and greatest gadgets, more state legislatures are likely to turn to regulating portable electronics coverage.
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