Loud and Clear on Cell Insurance

Sometimes a problem has to hit home to trigger change. For Maryland Attorney General Douglas F. Gansler, that happened when his 13-year-old son lost his cellphone.

Gansler had bought a cellphone-insurance policy intended to replace lost, stolen or broken cellphones. Under the plan, the Ganslers paid a monthly fee of about $5. But when his wife called the insurance company, Asurion Protection Services, to request a replacement phone, she was told she would have to pay a $50 deductible. She also learned the replacement phone might not be new, but refurbished.

Gansler said he wasn't aware of the policy terms, and he began an eight-month negotiation with the four major wireless carriers. AT&T, Verizon Wireless, Sprint Nextel and T-Mobile, who provide insurance through Asurion, said they would give consumers more information about the policies before those people agreed to buy the service.

"If the customer was actually aware of what they're purchasing, they would not purchase it," Gansler said on a cellphone after hosting a news conference yesterday in Rockville.

He said he wasn't sure how many formal complaints his office had received about problems with cellphone insurance, but "everyone I talk to has dealt with this."

Gansler went on to say that Asurion does disclose the terms in a brochure given to customers when they buy the policy, but he never got around to reading it.

"I'm 45 years old, and I've never read through one of these 35-page pamphlets with fine print," he said.

Asurion, which handles the premiums and claims for underwriter CNA, said its policy terms, such as the monthly fee, the deductible amount and the condition of the replacement phones, have always been disclosed, either by a brochure at the point of sale or a follow-up postcard sent to new customers.

Gansler "has stated on many occasions that when he purchased a cellphone, he never read the brochure that he is complaining about, which fully disclosed all the key terms of the policy," said Lanny Davis, an attorney for Asurion. "In fact, he has repeatedly said, 'I never read brochures.' The brochure he used at the press conference was not the one made available to consumers, which he probably did not realize because, as he says, he doesn't read brochures."

The agreement Gansler secured with the wireless companies will provide more prominent notice of the policy terms in stores and on Web sites. Customers will also sign an acknowledgment that they've seen the terms. Some salespeople will be retrained. The agreement is effective in Maryland only, but Asurion said it will take similar actions nationwide.

I asked Gansler if he has a particular interest in other wireless consumer issues. He said there were no plans in place.

"This is the biggest issue that has come to our attention," he said.

-- Kim Hart

Excerpted and adapted from the Post I.T. blog. For more from the blog, visithttp://www.washingtonpost.com/technology.