FOS found in some cases the terms in the contract had been applied unfairly

customer complaint

The Financial Ombudsman Service (FOS) says it has seen a significant increase in the number of gadget insurance complaints it has received over the past year.

The Ombudsman said a few years ago it only received a handful of complaints, but last year it heard from more than a thousand people who got in touch about a problem they were having with gadget insurance.

Gadget insurance covers specific electronic devices against damage, (including the effects of water or liquids), theft and loss at home or when a person is away from their home.

The FOS said the two most common complaints resulted from a claim after the devise was stolen or accidentally damaged.

It found in some cases the terms in the contract had been applied unfairly and it was hard to see how anyone could make a successful claim.

In one example a man had his tablet stolen from a locked suitcase in a locked room while he was on holiday. The insurer rejected the claim as there was no evidence of forced entry.

But the Ombudsman ruled this unfair because it believed the man had taken enough steps to secure the tablet.

The Ombudsman said: “If an insurer turns down a claim on the basis that it was left unattended, or – in the case of damage – that it was caused deliberately, some insurers reject complaints.

“However, in these cases, we sometimes find that terms in the contract have been applied unfairly – or we argue that they’re so ambiguous it’s hard to see how anyone could make a successful claim.”

It found many people undervalued the cost of the technological items they carried and were unaware that most general contents insurance policies did not cover their items outside the home.

This has led to an increase in the number of people taking out specific gadget insurance because they are more aware that they need to purchase additional cover.

The FOS also found that warranties, insurance cover typically purchased at point of sale, were not always necessary and did not always provide a comprehensive cover.

This year the FOS formally investigated 700 individual complaints about warranties. Of these, it upheld four in ten in favour of the consumer (43%).

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