Why So Many Phone Insurance Claims Are Denied—and How to Avoid It

BZZZZT. Insurance claim denied. Paying insurance premiums only to have your claim rejected during an emergency feels horrible. A lot of denied claims stem from misunderstandings or exclusions. So what can you do to avoid claim denials?

We’re here to help. This guide will go over the main reasons phone insurance claims are denied, and how to avoid rejection.

The Fine Print Problem: What Phone Insurance Really Covers

Do you know what phone insurance policies cover? The answer is not everything phone related.

Typical coverage

Phone insurance usually covers:

Accidental damage: If you drop your phone, crack it, or otherwise damage it accidentally, the repair costs are covered by phone insurance.

Theft: If your phone gets stolen, the replacement cost is covered by insurance.

Insurance companies may be partnered with certain authorized repair and replacement shops. They can even help you quickly obtain a replacement on the same day as the loss.

Specialized or comprehensive phone insurance policies can also cover cyber crimes, data recovery, and other risks. If you need the best protection, read our guide on Modern Phone Insurance.

Common exclusions

Exclusions are situations where your phone insurance will not help you with the expenses. Some policies do cover these, but it depends on the insurer. Common exclusions of phone insurance include:

Intentional damage: If you tamper with the phone, modify it, or damage it on purpose, the phone insurance company can deny your claim.

Water damage: Liquid damage can destroy a phone thoroughly. Many policies do not cover water damage unless you buy an add-on.

Fradulent or criminal: If you’re partaking in any fraudulent or criminal activity, the phone insurance company can deny your claim. Phone insurance fraud is taken seriously by insurance companies.

Manufacturer malfunctions: Many basic phone insurance policies don’t cover manufacturer malfunctions, since this protection falls under the purview of phone warranties. Examples are screen and battery defects.

Negligence: If the phone insurance company can prove you were negligent, the repair or replacement may not be covered.

Cosmetic damage: Cosmetic flaws, like small scrapes, are not usually covered by phone insurance. You may need to argue that your phone’s damage is not superficial if it is hard to tell by the eye test.

Older devices with pre-existing damage: Refurbished or old devices may not be covered by phone insurance, especially if it has pre-existing damage. Some insurance companies, like AKKO, do cover refurbished phones.

Differences across insurers

Depending on what carrier, manufacturer, or third party you’re buying phone insurance from, coverage can vary greatly. Be sure to read your policy before purchase.

Checking out phone insurance company reviews can also tell you whether the company has smooth claims processes. Some insurance companies are notorious for denying claims.

Top Reasons Phone Insurance Claims Get Denied

Here are the top reasons phone insurance claims don’t get accepted by phone insurance companies.

Missed Deadlines

Many phone owners end up filing claims too late after the incident. This makes the claim seem more likely to be fraudulent or non-essential. Check your policy to see if there is a deadline for notifying the insurer of an issue. Some insurers require you to notify them of a phone incident within 24 hours of it happening.

Lack of Documentation

You need supporting documentation when filing a phone insurance claim. This may come in the form of:

• Receipts
• Photos of the incident
• Proof of ownership
• Police reports of theft

The insurance agent assigned to your claim may ask for more information or evidence. Keep in touch with the insurance agent to give them necessary updates. Phone insurance is generally less complex than auto or homeowners’ insurance, so as long as you have enough evidence, reimbursements should be fast.

If your phone was stolen or damaged by someone else, a police report can be a good way to prove to your insurance company that it was genuinely somebody else’s fault that you need to replace or repair your phone.

Policy Exclusions

Phone insurance doesn’t cover everything. If you do happen to buy a policy that would even cover mysterious phone disappearances, the policy premium is probably sky high. They essentially expect to have to provide a payout.

Be aware of common exclusions, such as:

• Intentional damage
• Cosmetic flaws
• Water damage (limited)

If you believe that your insurance claim is legitimate and has been falsely denied, you can try to file again. Phone owners often encounter insurance companies denying their phone damage claim because they automatically classify it as cosmetic damage, but if you give more proof that it has damaged your phone functionally, you can get the claim approved.

Pre-Existing Damage

If the device already had cracks or issues before coverage started, these repairs will not be covered. This means if you buy a refurbished or old phone, there may be flaws that lead to less coverage. Phone insurance companies can find out your phone was old and/or predamaged based on receipts, photos, IMEI, and other information.

Non-Compliance

You have probably heard that modifications to your phone can lead to warranties becoming void. This is the case for most insurance plans as well. If you altered the phone physically or jailbroke the phone before, insurance will likely deny your claim.

If you use an unauthorized repair shop, the expenses may be lower, but insurance will likely reject covering the repair. Usually, the phone insurance company will have a list of authorized or partnered repair shops you can visit.

Fraudulent Claims

Insurance fraud is common in all industries. Insurers watch out for fraudulent claim red flags, such as:

• Frequent claims
• Unclear or AI-generated photo evidence
• Vague stories about mysterious phone disappearances
• Pushy about getting a reimbursement
• Only wants to talk in person, not by mail or phone
• Demanding a quick but lower payout

Didn’t Meet Deductible

Most phone insurance policies come with a deductible. You need to reach the deductible in out-of-pocket expenses before phone insurance will kick in to cover the rest. A deductible of around $100 or $200 is reasonable for phone insurance because necessary repairs will exceed those deductibles. However, the lower the deductible, the more expensive the insurance premium. Phone owners should pick a deductible and premium that align with their budget.

The Insurer’s Perspective

Insurance companies deny claims for several reasons, though all of them come down to one thing: cost and risk minimization. Insurance companies work by taking in premiums from a massive number of policyholders, and if an incident occurs, they use their funds to cover the expenses.

Fraud prevention is another big part of insurance. Insurance fraud refers to filing a claim that isn’t genuine. For example, you say you got your phone stolen, but you actually have it. Then the fraudster would theoretically be able to obtain a free new phone for only the low cost of an insurance premium.

Deductibles are also related to insurance risk minimization and cost control. It takes resources to handle a claim. If people are able to file claims for $5 repairs, then that is a lot of extra resources they would have to give towards small claims.

As long as your insurer is reputable, you have enough supporting evidence, and your incident is covered, the phone insurance claims process can be very fast and convenient.

How to Prevent Claim Denials

Read the Policy Carefully

Before purchase, understanding what exclusions your phone insurance policy has is ideal. Don’t skim through all of the policy terms. Keep a mental note of what is covered and what is excluded in your phone insurance plan.

Keep Proof of Purchase

Store receipts and IMEI/serial numbers. All relevant information can help you with an insurance claim later on. You need to prove to the insurance company that you actually have a phone and it actually needs repairs. The value and model of your phone can also affect how much your repairs cost.

Document the Incident

When something happens to your phone, make sure to document it as well as possible. Good examples include:

• Photos
• Police reports (for theft/loss)
• Time stamped notes
• GPS locator app showing your phone is missing

File Promptly

Notify your insurer as soon as possible after an incident occurs. File your claim once you have gathered all pertinent information.

To get a better idea of how much time you have, check your policy details or online portal for claim process deadlines.

Use Authorized Channels

All repairs and claims must go through approved providers. You need to make sure if your phone insurance company has any restrictions on which repair shops you can use.

In general, avoid unauthorized repair shops. These are the shops that look too good to be true, with repairs that are so cheap that it will hurt to look at official shops. However, if you use their services, like replacing a broken battery, it may void your warranty and insurance plan. Phone manufacturers and insurance companies do not like it when phone users tamper with the phone.

Be Honest and Thorough

Try to not misrepresent your case. Misrepresentation can void coverage entirely because the insurer will see you as a fraudulent policyholder. You may be blacklisted from buying phone insurance again. Double check the info you’re submitting before filing a claim.

Alternatives & Backups

Credit card/device protection perks

Credit cards offer loyalty perks and rewards programs. Some of them offer device protection perks that can help you pay for phone repair costs or device-related accidents. For example, Chase offers a credit card for cell phone protection.

Credit card protection perks come with requirements. You’re generally expected to make all cell phone monthly payments using the credit card.

Self-insurance

Self-insurance for phones is essentially just using emergency savings for repairs and replacements. The main advantage of self-insurance is that you have more control. One month you can deposit $5 into savings, the next you can deposit $100.

Emergency savings aren’t the best method of insurance for everyone. If you can’t put a substantial amount into the savings and be able to easily absorb the financial loss of replacing an entire phone, it can be a stressful problem.

Rugged cases and screen protectors to minimize risk

A protective phone case can go a long way in preventing your phone from breaking. Impact resistant cases are designed to absorb impact when you drop your phone.

Screen protectors are also valuable because you only need to pay a one-time fee for a good screen protector. After that, your phone’s screen will be much more durable, and resistant to scratches and scrapes.

Conclusion

Most phone insurance claim denials happen because of phone owners misunderstanding what the policy actually covers. Missing documentation is another common reason for claim rejections.

Quick tips for how to get your phone insurance claim accepted:

• Notify insurer after the incident and file claims ASAP
• Keep relevant phone damage photos and receipts
• Avoid altering or modifying your phone–it often voids insurance
• Use authorized repair shops

Before buying or filing a claim, review your policy carefully to make sure you’re covered. Check out our ranked list of the best phone insurance companies today, featuring AKKO’s affordable and comprehensive phone insurance.