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Cell Phone Insurance?

October 10, 2011

Chris Garlasco, Owner & Managing Partner - Founders Insurance Group

I stopped by my cell phone service provider tonight because my smart phone suddenly wasn’t acting so smart. Actually, the phone seemed to be struggling with a full blown personality disorder! The staff at the cell phone store took a quick look at the phone and declared that even though the phone still had power, it was most likely a battery problem.

With a hint of sarcasm they told me that since I had never purchased “insurance” for my phone that I would need to bear the full cost of a new battery, but since my phone was the ripe old age of twenty one months, it might take some time to get a new battery. They explained that it simply was too old for them to stock in the store and there would be at least a fifty dollar cost for the battery if they could locate one and it might not solve the problem anyway. The two clerks and store manager reminded me again that if I had purchased the “insurance” it wouldn’t be a problem.

I humored them and asked the cost of the insurance. They explained it was a great deal and for just $5 per month or for a total cost of $90 I could obtain the “coverage” for two years. Of course the phone would be subject to a $50 deductible and a replacement phone would be a “refurbished” phone.

I looked at their smirking faces and as an insurance guy, I couldn’t contain myself. “So, let me get this straight,” I said, “for a total of $140 I could insure my $300 phone and receive a refurbished, not new, phone.” I exclaimed to their complete surprise, “That gentlemen and lady, is a total rip off!” They looked to be dumbfounded by my terse response. The store manager stepped in and tried to correct me of my misguided ways explaining that most people found the coverage to be a great deal. Undaunted, I asked him if he owned a home. I went on by saying, “If I were to compare the cost of your so called “insurance,” to the cost of your homeowner’s insurance it would look something like this; ” to insure your $300,000 home at the same rate as you are charging folks for cell phone “insurance” coverage, the annual premium would be $140,000 per year. Does that sound like a fair rate? “The manager wasn’t swayed. He responded by saying that many people couldn’t afford to buy a new phone at full price so their premium was a good deal and he went on to explain that a home and a phone were not comparable. The only other customer in the store understood what I was now saying and was becoming as exasperated as I was. I was on a roll and with the support of the other customer I felt as if I may have just started a “movement.”

I then felt a small tug on my sleeve from my wife. It’s the tug that says, “They won’t get it and you are wasting your time and mine!” The second tug, a little firmer, was more of a “can we leave now?” But, I bravely soldiered on using the manager’s example, “Most people don’t have an extra $300,000 laying around so they too would find an ever greater need for coverage so that would be a sound reason for my $140,000 premium.” Out of the corner of my eye, I could clearly see that the clerk, willing to let this complex debate be handled by her manager, had a glazed look in her eyes. I am certain that it wasn’t a result of boredom, but rather she appeared to be suffering from processing overload. The manager stood his ground, my wife’s tug could now be classified as a full blown “yank” and the customer looked to be interested in taking his protest to the streets!

My point had been made, and my work here was done. Of course, I did have to purchase a new phone. I used that time to begin a conversation about the injustice of insurance sold by rental car companies but quickly gave up as the thought of sleeping on the living room couch flashed before my eyes.

I will however continue, my wife permitting, to fight tirelessly for freedom and your right to ethical insurance. I bid you a good day!

Chris Garlasco

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