Replacement Value - How are these settled.

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marej

186 posts

Master Geek

#208948 6-Mar-2017 14:12

I have had a claim accepted for a smartphone by tower. The phone is under 5 years old so it falls under replacement value. The actual phone - Windows Lumia 800 is no longer around and they have stipulated that they will replace with a huawei 9 Lite which has a retail value at Noel Leeming of $350. Now I do not want the Huawei so I asked if they could pay me the money, and they won't. My options are - I am told:

Pay excess of $100 and take the huawei

Take a store credit of 250 less the excess - so basically I have to buy something.

Policy wording says "We will arrange for the repair, replacement or payment for the loss, once your claim has been accepted."

When talking with them, i sounded like the calculation of a store credit is based on their cost rather than the cost to me if I were to buy the huawei. I have asked to clarify whether the 250 has the excess accounted for - I am a bit confused on that.

I havent had a claim in a long while and not for a smartphone. Is this what I can expect from having insurance.

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20580 posts

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Lifetime subscriber

#1730945 6-Mar-2017 14:17

Offering you $250 (price less excess) as the value is reasonable. Forcing you to take store credit rather than a specific phone is less reasonable, it sounds reasonable to ask for cash payment so you can buy a phone of your choice.

Speak nicely to insurance companies, get them on your site, don't be a complainer who they want to get rid of.

marej

186 posts

Master Geek

#1730956 6-Mar-2017 14:28

Thanks Timmmay. I get what your saying about being nice, but they are forcing me to take a store credit which I find completely odd. Right now my instinct is to change insurance companies, but if they are all like this, then no point.

Oblivian

7297 posts

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ID Verified

#1730960 6-Mar-2017 14:46

It's the old adage where we perceive replacement cost to mean like for like. Biiigggg headache post quake for most people making claims. (depending on covering company) Replacement value tends to take the specifications of the original device. Compares it to market devices and finds the closest match. This may mean the most basic of replacements compared to the same original VALUED device.

You pay $5k for a TV 3 years ago? big deal. Doesn't matter than 5K today will get you one twice the size with more smarts now. They depreciate, so You'll usually get the lowest size closest to original with the same features set.

Also why people go into battle when cars are written off with market valuation..

mattwnz

20155 posts

Uber Geek

#1730987 6-Mar-2017 15:10

Why are they offering a store credit if the policy says they will provide a part refund? I wouldn't accept a credit as from my experience retailer don't usually allow you to negotiate if you want them to match a price etc.

mattwnz

20155 posts

Uber Geek

#1730990 6-Mar-2017 15:12

Oblivian:
It's the old adage where we perceive replacement cost to mean like for like. Biiigggg headache post quake for most people making claims. (depending on covering company) Replacement value tends to take the specifications of the original device. Compares it to market devices and finds the closest match. This may mean the most basic of replacements compared to the same original VALUED device.

You pay $5k for a TV 3 years ago? big deal. Doesn't matter than 5K today will get you one twice the size with more smarts now. They depreciate, so You'll usually get the lowest size closest to original with the same features set.

Also why people go into battle when cars are written off with market valuation..

Many things though do increase in price. TVs are an exception. But things like fridge freezers tend to go up in price apart from possibly the low models

marej

186 posts

Master Geek

#1730992 6-Mar-2017 15:12

Ok, I accept the value. I do not accept that a store credit is a 'payment' per the terms and conditions. I do not think this is fair. They have just rung me and insist that the phrase "We will arrange for the repair, replacement or payment for
the loss, once your claim has been accepted" is only for loss or accidental damage but not for burglaries which this is.

I just find this deceptive behaviour from Tower actually.

MikeAqua

7779 posts

Uber Geek

#1731001 6-Mar-2017 15:22

Store credit is being offered because insurers do deals with stores, whereby they pay less then face value for store credit.

If the policy says 'refund' insist on money. Store credit is not legal tender ...

Mike

Equinox IT

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mattwnz

20155 posts

Uber Geek

#1731006 6-Mar-2017 15:26

Since when is store credit considered payment.? Payment to me infers cash or money in your account as legal tender. Store credit can't usually be exchanged for cash.

What are their remedy terms for burglaries if they are saying that term doesn't apply?

marej

186 posts

Master Geek

#1731041 6-Mar-2017 15:50

I think they are making this up as they go along frankly. I have asked they pay me by direct credit.

I did infer they are trying to retain their discount with Noel Leemings but I can't make accusations.

marej

186 posts

Master Geek

#1731099 6-Mar-2017 16:53

On the tower website - FAQs

"If a stolen item is eligible for replacement, we will arrange for it to be replaced through our network of preferred suppliers.

Due to our buying power with these providers we can access better rates for many of these items, which helps save you money and keeps your premiums down.

In instances where it is not possible to replace an item through our supplier network we will either make a payment to you equivalent to the replacement cost or replace it through an alternative source."

They are settling this claim using the replacement but because I am not agreeing to the replacement (huawei), they are saying store credit applies.

Still not changed my view. Store credit should be stated in terms and conditions.

dejadeadnz

2394 posts

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Inactive user

#1731150 6-Mar-2017 19:43

The insurance company is on very shaky ground when insisting to "pay" the OP using store credit. I don't see how that can fly (I'm a lawyer/risk and compliance guy). However, I'll say that offering you a phone that retails for $350 in exchange for a 5 year old broken phone is pretty generous. Unless you really hate the Huawei or just can't bear the thought of taking it and then selling it, I suspect you will be better off accepting that.

mattwnz

20155 posts

Uber Geek

#1731154 6-Mar-2017 19:53

They did say less than 5 years, so it could only be a couple of years old. I don't think they said the original cost of the phone. But it does sound like a reasonable deal in terms of the product and how new it is, and these android phones do depreciate and get outdated very quickly. So if it was 5 years old, it probably had no paper value anyway. Why not ask them for an alternative brand?

marej

186 posts

Master Geek

#1731156 6-Mar-2017 20:00

The original cost of the phone was $799. My point is, based on the policy I have with tower, computers and phones under 5 years old are subject to replacement value....so to that extent I now understand they are honoring that correctly.

The issue now is how they want to settle that obligation. I do not want the huawei ( I would not be better taking it and selling on trademe- they are selling for 350, so I am no better off once you account for excess of $100). I would rather spend more on a phone that I want and put the settlement towards that and be able to shop around instead of being limited to Noel Leeming and their prices.

timmmay

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#1732139 6-Mar-2017 20:22

I think you need to read your policy wording.

mattwnz

20155 posts

Uber Geek

#1732149 6-Mar-2017 20:48

marej:
The original cost of the phone was $799. My point is, based on the policy I have with tower, computers and phones under 5 years old are subject to replacement value....so to that extent I now understand they are honoring that correctly.

The issue now is how they want to settle that obligation. I do not want the huawei ( I would not be better taking it and selling on trademe- they are selling for 350, so I am no better off once you account for excess of $100). I would rather spend more on a phone that I want and put the settlement towards that and be able to shop around instead of being limited to Noel Leeming and their prices.

How have they worked out that a 350 dollar phone and a huiwai brand is a fair replacement? The Microsoft / Nokia phones are potentially seen as a premium brand with a good reputation for reliability. Where huiwai are seen as a cheaper Chinese brand. . Why do they even consider android is a fair replacement for a windows phone? Wouldn't an iOS device a closer? Just interested in their reasoning. I mean why haven't they offered say a Sony XA android phone, which is a premium brand, or even Samsung?

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