iPhone policies go up as Android plans cost lessInsurance premiums for iPhones are to rise by almost 50 percent above the current average, while premiums for Android phones will be lowered between 10 to 20 percent.
Currently, the three major telecom carriers offer smartphone insurance at an average 5,000 won ($4.30) to cover both damage and loss. The increase will cost iPhone users as much as 7,500 won a month. The new pricing will only affect new subscribers.
SK Telecom and KT are known to be planning to implement the change immediately in July, and LG U+ is expected to hold off until next year.
According to the Financial Supervisory Service (FSS) on Monday, the financial watchdog will order local insurers this month to start developing new pricing models that charge different prices for iPhone and Android phone holders.
The measure comes after the financial watchdog targeted smartphone insurance premiums as one of the nation’s 20 core financial reform projects.
“We aim to address the problem that cost burdens are unevenly imposed on users of different smartphones,” said Kim Dong-sung, head of the insurance inspection division at the FSS. “When we reviewed data, insurers have actually spent nearly three times as much in covering iPhone repair costs as they do in non-iPhone cases.”
Insurers spent about 151 percent of the total insurance premiums it collected to finance iPhone repairs in the fourth quarter last year, while they spent about 58 percent on non-iPhone users, according to data that local insurers submitted to the FSS.
The repair cost is lower for Android phones such as Samsung’s Galaxy and LG’s G series, as repair shops change faulty parts. iPhone repairs are more expensive, as Apple’s repair policy is to exchange a broken device with a refurbished one, including shipping fees.
The FSS will also order all three mobile carriers to sell all types of smartphone insurance, starting in September.
There are two types of insurance, one priced at 4,900 won a month which covers loss and damage, and the other for 2,900 won that covers only damage.
LG U+ has required its customers to sign up for the costlier policy, while SK Telecom and KT have sold both types.
Starting in September, the FSS will also change the insurance fee charging system where compensation is made directly between the insurer and telecom carrier.
Mobile phone users in Korea have to first pay telecom carriers for the repair costs and have the cost reimbursed from the insurers later.
BY KIM JI-YOON [email@example.com]