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Insurance cost for iPhones to be raised by 50%

Posted May. 10, 2016 07:30,   

Updated May. 10, 2016 07:37

한국어

iPhone’s cellphone insurance premium to reimburse customers for the damage or loss of the device is expected to rise by around 50 percent from July at the earliest. On the other hand, insurance premiums for Samsung’s Galaxy series and LG’s G5 will be cut by 10 percent to 20 percent from current rates.

The Financial Supervisory Service announced on Monday that such a change in cellphone insurance policy will be carried out as part of its 20 financial reform tasks. The agency decided to classify cellphone insurance premiums to reflect the different loss ratios, which are currently calculated equally for all cellphones regardless of each manufacturer’s warranty policy. The new system is expected to push up iPhone’s AppleCare cost to nearly 7,500 won (about 6.42 U.S. dollars) per month, from current rate of 5,000 won (4.28 dollars) per month.

Apple maintains a policy of refurbishing a new device for a damaged iPhone, which poses a much higher burden to customers than the repair policies of Samsung and LG do. The loss ratio of the former during the fourth quarter of last year was at 151.4 percent, while that of the latters was only 58 percent.

Such a big gap in loss ratio has not been reflected in the insurance premium, which means non-iPhone users have shared the burden of iPhone users. The new premium policy will be put in place from the middle of this year for SKT and LG U+, and early next year for KT, according to the remaining terms of contract between the carriers and the insurance companies.



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