Cell phone insurance dubbed a scam

• Have you ever thought twice about shelling out a monthly fee for cell-phone insurance, worried that the coverage is a bad deal?
• According to a class-action lawsuit filed in federal court in Miami, cell-phone insurance is a rip-off, pushed by cell-phone-equipment insurers using "deceptive and outrageous" practices.
• For a typical monthly fee of $4 to $5, insurers promise to replace subscribers' lost, damaged or stolen phones, less a deductible generally ranging from $35 to $100.
• The rub, according to the suit, is that phones are replaced with cheap, used or refurbished phones, resulting in customers "unwittingly" paying more in the form of a so-called deductible than the phones they get are worth.
• The suit is seeking class-action status covering consumers in Florida who bought insurance from any of the three defendants from July 1, 2001, to the present, and consumers nationwide who purchased insurance during the same period from Lock/Line, which provides coverage to customers of AT&T Wireless and Cingular.
• The complaint against Lock/Line covers more consumers because the law in Missouri, where Lock/Line is based, is more easily applied nationwide, according to an attorney at Kozyak Tropin & Throckmorton in Miami, which filed the suit.
• "These premium payments do nothing more than create a right to have the opportunity to pay additional monies in the form of the so-called 'deductible' in order to receive a refurbished phone worth less than the deductible alone," the suit says.
• The suit also accuses the insurers of imposing unlawful and unfair conditions for filing a claim, including requiring a police report even if a phone is lost instead of stolen.
• The lawsuit asks that consumers receive refunds for monthly premiums in addition to any deductibles they paid greater than the actual cost of replacement phones, plus interest, costs and attorney fees.