Maryland AG Notes Cell Phone Insurance Agreement

Maryland Attorney General Douglas Gansler announced an agreement with all of the major United States wireless carriers as well as Asurion Protection Services, a provider of cell phone insurance protection policies to the customers of the carriers.

Under the agreement, Asurion will more clearly disclose key terms of its insurance policies in the materials that it provides to the wireless carriers. AT&T Mobility, Sprint Nextel, T-Mobile USA and Verizon Wireless will ensure consumers are provided with the key terms when they enroll customers in the insurance plans administered by Asurion. Although the agreement applies solely to Maryland, it is expected that the carriers and Asurion will make similar changes in other states.

Under the agreement consumers will be informed specifically of the following terms at the point of sale:

• the monthly fee;
  
• the amount of any deductible;
  
• the replacement equipment that may be provided (e.g., new or refurbished equipment, and either the same as or different than the customer’s original equipment);
  
• applicable limits on the number or value of claims; and
  
• the cancellation policy.

While prior company materials contained all the terms of the policy in the information provided to consumers, Gansler strongly believed that Maryland consumers were not fully aware of the key terms. As a result of the agreement, these terms will be prominently highlighted, including in the brochure provided to customers who purchase wireless phone insurance.

Additionally, the wireless carriers have agreed to institute measures to demonstrate the customer has had a reasonable opportunity to review these terms, such as obtaining the customer’s signature at a retail store or providing the customer with post-sale notification of both the insurance plan’s key terms and the customer’s option to cancel immediately without penalty.