This past week legislators tabled a proposal that would have established new regulations for cell phone insurance. Bill Brauch, director of the consumer protection division in the Iowa attorney general’s office, says they get a lot of complaints.
“We know a lot of problems are out there when you buy ‘add-ons’ with retail products, so we watch them very carefully,” Brauch says.
Some retailers offer cell phone insurance when you sign up for a cell phone plan, but the clerks who handle the transaction are rarely, if ever, licensed insurance agents. That doesn’t sit well with the people who are licensed.
“This is a major insurance state. It seems like every year there are people who want to be the exception to the rule — ‘We want to sell insurance, but we don’t want to be licensed,'” says Bob Skow, CEO the Independent Insurance Agents of Iowa. “It’s a fine line between not being regulated and then running rough-shod over consumers.”
Representative Rob Taylor, a Republican from West Des Moines who worked on the issue this year, says a compromise may be developing.
“I think the groundwork is laid for it to come up next year and both sides continue to talk,” Taylor says.
A tentative compromise does not call for every employee in a cell phone store to be a licensed insurance agent. Instead, the idea is to have the cell phone retailer pay a licensing fee to cover all the policies sold in their store and be responsible for training employees who sell the policies.
The attorney general’s consumer protection chief says he wants to more closely examine whether cell phone insurance policies fill a need or whether replacement cell phones already are covered by the phone’s warranty or homeowner’s policy. Those who sell cell phone insurance policies say they are geared to get a replacement phone in the consumer’s hands right away, which is what most customers want if their phone is lost or broken.