Consumers Regularly Underestimate Smartphone Replacement Costs

Published on: 3rd Sep 2012

­What price a gadget? Well, according to research by Assurant Solutions, many estimate it to be at least 20 percent less than it actually costs.

According to the research, consumers are drastically underestimating the price of the gadgets they use on a daily basis, and as such, get a massive shock when it comes to paying for replacements in the event these devices are lost, broken or stolen.

For example, six in ten consumers surveyed underestimated the price of an iPhone 4S when asked how much the handset cost, guessing at least 20 percent less than the ticket price of the cheapest model. To that end, nearly a third of the respondents hadn't insured their gadgets because they didn't believe they were worth enough to justify the cost of insurance.

Simon Harrison, Sales Director, UK & Ireland for Assurant Solutions, comments: "We know that consumers are clamouring to get hold of the latest gizmos and gadgets, but when they do so, they don't think about protecting their investment for the future. If it comes to having to fork out for replacements, consumers can often underestimate how much the initial financial outlay was, because they may have bought it as part of a contract/package. Consequently, they are left with a quandary about how to finance a replacement."

When questioned about what people did when a gadget was lost or stolen, the majority of respondents replied that they bought a new replacement, while others have had to rely on second hand or older generations. Some even said that they would take out a new phone contract (in instances like lost or stolen iPads) just to avoid digging into their pockets for a replacement.

Those that think they are covered on their household insurance could be in for a nasty shock. Accidental damage isn't always standard in household policies, and cover may not apply if the gadget is damaged or lost outside the home. Even if it is covered, if a larger voluntary excess has been chosen to bring the premium down, it may not be worthwhile making a claim at all.

Harrison continues: "It seems that the majority will want to replace a lost or stolen gadget with an identical model as the desire to have the latest make or model, no matter the cost, is quite strong. However, for the cost of a few pounds each month, consumers can have peace of mind that if anything happens to their gadgets, then it's easy enough to repair or replace in a relatively short amount of time."

 

Tags: [UK]