As we continue our tour of the service contract industry, we're circling back to complete an analysis we began three weeks ago to compare the mobile phone insurance plans of the carriers to the handset protection plans offered by major electronics retailers.

There's a good reason why the wireless carriers are so successful selling their insurance plans (see last week's newsletter). Customers feel vulnerable when they spend hundreds of dollars on a fragile smartphone that they could easily drop or lose. And while the retail service contracts cover certain types of damage caused by accidental drops or spills, they don't cover loss or theft.

And that's the main difference between a warranty, a service contract, and an insurance policy. A warranty covers defects and malfunctions for an initial period, usually a year. A service contract covers defects and malfunctions, and certain types of damage, for an additional year or two. An insurance policy covers more types of damage, as well as loss and theft. And given that the theft of iPhones is now called "Apple picking" by some street thugs, smartphone customers seeking peace of mind need policies that cover all these perils.

Therefore, neither warranties nor service contracts are sufficient to cover the worries of smartphone users. And while the manufacturers provide the warranties and the retailers provide the service contracts, only the carriers provide insurance at the present time. And that makes their offerings superior.

State Insurance Regulations

The reason the retailers have a deficient product to sell, however, is not caused by their inability to respond to market demands. Instead, it's a problem caused by various state regulations covering the sale of insurance. Generally, clerks and cashiers can't sell insurance without a license. And one must go to school and take a test to earn a license. In some states, there are additional licensing or registration requirements imposed on the businesses themselves, in addition to the requirement that their employees who sell insurance must be licensed to do so.

We took a close look at the terms and conditions of the major wireless carrier plans three weeks ago, and estimated the size of the market in last week's newsletter. This week, we're going to probe the pricing and coverage of some of the top retailer-provided plans, which we expect to bring in $2.2 billion in premiums paid by consumers this year.

We moved the coverage of AppleCare from the October 31 newsletter to this week's newsletter -- where it belongs -- alongside coverage of the protection plans offered by Best Buy, Walmart, and Radio Shack. Apple Inc. is in the unique position of being both a manufacturer and a major retailer. And while the products of Apple the manufacturer are sold by the likes of Best Buy, Walmart, and Radio Shack, AppleCare the service contract program is one of their major competitors.

In addition to the service contracts sold by retailers, we also found a curious hybrid offering at Radio Shack and a few other retail outlets, which to us seems designed to allow those companies to sell insurance without a license. They don't call it insurance, though. They never even use the word. You have to join an association, which covers its members against loss or theft of their smartphones.

However, the exclusions are so broad that it's difficult to collect on a claim. So we would suggest that the way the Mobile Device Protection Association invites its "members" to mislead themselves into thinking they're covered against loss and theft is audacious, to say the least.

But let's first take a look at the legitimate market. In last week's newsletter, we noted that the American International Group Inc. (AIG) has a much larger market share in the retail space than it does among the wireless carriers. That's because of the company's backing of not only the AppleCare program, but also its long-term relationship with Best Buy Company Inc. So perhaps that's a good place for this tour to start.

Best Buy and the Geek Squad

Best Buy offers a wide selection of handsets, tablets and subscription plans. In all cases, AIG WarrantyGuard Inc. or an affiliate is both the obligor and administrator of the plans, and either Illinois National Insurance Company or New Hampshire Insurance Company is the underwriter.

The iPhone 5s 32GB smartphone is available at a subsidized price for the AT&T Mobility network. Buyers must agree to a two-year subscription with the wireless carrier to obtain the phone at that price. The iPad mini with 32GB and cellular coverage (AT&T Mobility, Verizon Wireless or Sprint) retails for an unsubsidized price of $560.

Best Buy sells Geek Squad Protection plans for both the iPhone and iPad. The plans cover defects, malfunctions, and certain types of damage, but do not cover loss or theft of the phone. As detailed below, the damage coverage extends to drops and spills, but not to drops from elevated heights, not to drops from moving cars, and not to drops into water or other liquids.

The price for the iPhone service contract is either $200 as a one-time payment at the outset for two years of coverage, or $10 per month for the duration of the contract. For damage claims or others that would not be covered by the manufacturer's warranty, there's a service fee of $150 for a smartphone and $50 for a dumb phone.

The price of the iPad mini service contract is $120 for one year of coverage, $200 for two years, and $320 for three years. Service contracts for iPad units equipped with the larger Retina display will cost an additional sum, depending upon the features of the unit, the wireless carrier selected, and the duration of the plan. And so, for instance, protection for the iPad with Retina display and 128GB for the Sprint network is $450 for three years, $250 for two years, and $180 for one year. Monthly payment plans are not available for iPad service contracts, however.

Of course, Best Buy also sells other smartphones. The Samsung Galaxy S 4 is sold at a subsidized price for the AT&T Mobility network. The Galaxy S III is sold at a subsidized price for the Verizon Wireless network. The BlackBerry Curve is free with a two-year AT&T Mobility subscription. But in each case, Geek Squad Protection plans are $10 a month or s $200 one-time payment for two years of coverage -- same as the iPhone.

Best Buy also sells a variety of dumb phones, such as the Nokia 100 and the Pantech Renue mobile phone. For these devices, the price of a Geek Squad monthly plan is $6.00 while the two-year plan is $100. And then there are some really low-end prepaid phones for which the two-year replacement plans cost $5.00 (paid one time, not per month).

Even in cases where the price of the phone is subsidized by a wireless carrier (and indeed, some are given away for free in return for a two-year subscription), Best Buy still offers its service contracts, at the same price and terms as if the buyer was paying full price.

Coverages & Exclusions

The list of coverages and exclusions is extensive. Accidental damage from handling is covered as follows:

• ADH coverage provides for parts and labor costs to repair your product damaged as a result of an unexpected and unintentional external event (i.e., drops and spills) that arise from normal daily usage of the product as the manufacturer intended.
• ADH expires one, two, three, four, or five years from the original product purchase date as stated on your purchase receipt. If we determine at our sole discretion that your product cannot be repaired, we will replace it with a product of like kind and quality that is of comparable performance or reimburse you for replacement of the product with a voucher or gift card, at our discretion, equal to the current market value of the product, as determined by us, not to exceed the original purchase price of your product, including taxes.
• You will be required to pay a service fee for all ADH claims submitted under this plan on feature phones, smartphones and iPhones. Please refer to the "Contract and Non-Contract Based Mobile Devices" provision in Section C "Product Specific Repair Coverage" below for specific details.
• Cosmetic damage to your product including but not limited to scratches, tears, dents and broken plastic on parts, that does not otherwise affect or impede its functionality or materially impair your use of the covered product/device is not covered.
• If you purchased ADH Coverage, as stated on your sales receipt, this plan will include the applicable General Plan Coverages listed in Section A and Product Specific Repair Coverages listed in Section C.
• If your product has been replaced pursuant to this ADH coverage, the plan has been fulfilled in its entirety.
• ADH Coverage Exclusions: products damaged in falls from elevated heights (e.g., decks, balconies, windows); products that have been run over by or fall from moving vehicles; products damaged by liquid immersion/submersion or any other secondary damage; products damaged due to their use in a manner the manufacturer did not intend.

The text of Section C that is relevant to mobile phones and tablets is as follows:

• All defective/malfunctioning contract-based mobile devices will be replaced with a product of like kind and quality of comparable performance using Geek Squad's Rapid Exchange process.
• If you are paying for your plan on a monthly basis, your account must be current to receive service.
• You will pay a $49.99 service fee for each claim submitted under this plan that is not covered under a manufacturer's warranty on a feature phone and a $149.99 service fee for each claim submitted under this plan that is not covered under a manufacturer's warranty on a smartphone or iPhone. You are limited to three claim submissions after which our obligations under this Plan will be fulfilled in their entirety.

Section G contains additional exclusions relevant to mobile phones:

This Plan does not cover:

• Damage to your product caused by accident (unless you have purchased the optional ADH Coverage and it's a covered event), abuse, neglect, intentional physical damage, misuse (including faulty installation, repair, or maintenance by anyone other than an authorized service provider), unauthorized modification, viruses and/or spyware, performance failures due to not maintaining firmware updates, extreme environment (including extreme temperature or humidity), external condensation, mold, immersion/submersion in liquid (e.g., pool, bathtub), lightning, fire, flood, insect infestation, rodents, war, terrorism, computer software related failures, Acts of God or other external causes.
• Lost or stolen products (this plan only covers products returned to us in their entirety).
• Cosmetic damage to your product including but not limited to scratches, tears, dents and broken plastic on parts, that does not otherwise affect or impede its functionality or materially impair your use of the covered product/device.
• Products with serial numbers that have been altered, defaced or removed; problems caused by a device that is not your product, including equipment purchased at the same time as your product; controllers, consumable parts, such as batteries, unless expressly provided for herein; damage to, or loss of any software or data residing or recorded in your product (when providing repair or replacement service, we will use reasonable efforts to reinstall your product's original software configuration and subsequent update releases, but will not provide any recovery or transfer of software or data contained on the serviced unit not originally included in your product).
• Failures or parts and/or labor costs incurred as a result of a manufacturer's recall; fees or costs related to third-party contracts, consequential or incidental damages, including but not limited to loss of use, loss of business, loss of profits, loss of data, downtime, charges for time and effort, "no problem found" diagnoses, or failures that occurred prior to the purchase of this plan.
• Products used for commercial purposes, unless expressly stated on your purchase receipt that this is a Commercial Plan.
• Product use not consistent with either its design or the way the manufacturer intended it to be used. Example: humidity damage on TVs not designed for outdoor use.
• Damage to your gaming console due to software-related issues.
• Personal items left in the product (you are responsible for removing all personal items from the product before service is performed); parts and services covered under your product's manufacturer's warranty; remote control reprogramming; damage due to contact with any human or animal bodily fluids, or secondary damages.
• This plan excludes products that are not listed on this plan, including products attached to the covered product, such as components or add-on accessories.
• ADH Coverage Exclusions: products damaged in falls from elevated heights (e.g., decks, balconies, windows); products that have been run over by or fall from moving vehicles; products damaged by liquid immersion/submersion or any other secondary damage; products damaged due to their use in a manner the manufacturer did not intend.
• In excess of three claims on feature phones, smartphones and iPhones (Please refer to the "Contract and Non-Contract Based Mobile Devices" provisions in Section C).

AppleCare+ Protection Plan

We initially covered the service contracts sold by Apple Inc. in the October 31 newsletter. And in the November 14 newsletter, we estimated that the company's U.S.-based service contract business for just the iPhone and iPad was a $2.1 billion business for the year ending in September 2013.

In the U.S., Apple sells service contracts for the iPhone and iPad called AppleCare+ Protection Plans, which covers the repair of both defects and damage. AppleCare+ for iPhone and AppleCare+ for iPad are both priced at $99 for two years of coverage.

Worldwide, the iPhone now accounts for more than half the company's total revenue, and the iPhone and iPad together account for more than 72% of revenue, while the Macintosh computer family's total contribution is now down to only 13%. AppleCare, we estimate, has accounted for about 3.5% of the company's revenue during the iPhone era, though its share was noticeably down to only 3.1% for the fiscal year just ended in September. And while iPhone revenue was up 13% in the most recent fiscal year, the amount of deferred revenue that we estimate comes from sales of AppleCare plans was actually down slightly in the most recent fiscal year.

The reason for the decline, we believe, is the growing awareness that cracked screens aren't the only major perils faced by iPhone owners. Loss and theft are bigger worries, and AppleCare+ doesn't cover those -- yet.

AppleCare+ covers defects, malfunction, and certain types of damage for up to two years after purchase. However, because Apple also is the manufacturer, the factory warranty covers defects and malfunctions in both the iPhone and the iPad for the first year. The AppleCare+ policy then covers the units for an additional year. AppleCare+ also lengthens the period for free technical support from 90 days to two years. Coverage is usually purchased at the same time and place as the iPhone or iPad, but technically it can be purchased up to 30 days later.

Claims caused by defects and malfunctions are handled at no charge. Claims caused by accidental damage from handling, however, incur a service fee of $79 for an iPhone and $49 for an iPad. It's up to Apple to decide whether the claim is caused by a defect, a malfunction, or damage.

In most U.S. states, Apple Inc. is the administrator, AppleCare Service Company Inc. is the obligor, and Illinois National Insurance Co., a unit of AIG, is the underwriter. In Texas, the administrator is Apple Inc., the obligor is Apple CSC Inc., and the underwriter is Illinois National Insurance Co.

Battery Coverage

AppleCare+ service contracts also will replace a battery that has depleted its ability to hold a charge by 50% of more. If the entire unit is replaced, the AppleCare+ contract covers the new unit for the remaining duration of the two-year plan. However, ADH coverage expires after two service events occur within the two-year period.

There are also some restrictions on what kinds of damage are covered, as described in Section 3.2 of the AppleCare+ terms and conditions:

ADH coverage only applies to an operational or mechanical failure caused by an accident from handling that is the result of an unexpected and unintentional external event (e.g. drops and liquid contact) that arises from your normal daily usage of the covered device as intended for such covered device. ADH coverage does not include (a) protection against normal wear and tear, theft, misplacement, reckless, abusive, willful or intentional conduct associated with handling and use of the covered device, (b) protection against any other act or result not covered by the plan, as described in Section 4.2 below, or (c) any resultant damage to the Covered Device that arises from one or more conditions described in Section 3.2(a) or (b). Apple may ask you to provide an explanation of where and when the accident occurred with a detailed description of the actual event. Apple will deny your claim if you fail to pay the service fee or fail to provide information relating to the accident when asked.

Section 4.2 lists more exclusions:

(i) The plan does not apply to installation, removal or disposal of the covered equipment, or provision of equipment while the covered equipment is being serviced.
(ii) The plan does not apply to damage caused by (a) a product that is not the covered equipment, (b) abuse, misuse, fire, earthquake or other external causes except as described in section 3.2 above, (c) operating the covered equipment outside the permitted or intended uses described by the manufacturer, or (d) service performed by anyone who is not a representative of Apple or an Apple Authorized Service Provider.
(iii) The plan does not apply to a product with a serial number that has been altered, defaced or removed, or has been modified to alter its functionality or capability without the written permission of the manufacturer.
(iv) The plan does not apply to covered equipment that has been lost or stolen. This plan only applies to covered equipment returned to Apple in its entirety.
(v) The plan does not apply to cosmetic damage to the covered equipment, including but not limited to scratches and dents that do not otherwise affect the functionality of the covered equipment.
(vi) The plan does not apply to preventative maintenance on the covered equipment.
(vii) The plan does not apply to defects caused by normal wear and tear or which is otherwise due to normal aging of the product, and
(viii) The plan does not apply to a pre-existing condition on any covered equipment if you purchased the plan after you purchased the covered equipment.

As specified in Section 4.2(iv), AppleCare+ plans never cover units that were lost or stolen. The protection plans also do not include data recovery services. The contract specify that the customer should expect Apple to delete all the data and files on the unit during a repair, and they should not expect Apple to replicate the old data onto a new unit during a replacement.

Under a section entitled "Your Responsibilities," the company states: "You will make sure to back up software and data residing on the covered equipment. During hardware service, Apple will delete the contents of the covered equipment and reformat the storage media. Apple will return your covered equipment or provide a replacement as the covered equipment was originally configured, subject to applicable updates."

International Differences

In other countries, the terms and conditions are somewhat different. In Europe, AppleCare+ is described as "an insurance policy covering the risk of damage." But the policies in Europe don't cover defects or malfunctions. Those are covered by the manufacturer's warranty. And neither the warranty nor the insurance policies cover theft or loss. In Canada, Japan, China, Hong Kong, and Singapore, as in the U.S., the AppleCare+ service contracts cover both defects and damage (but never theft or loss).

As in the U.S., in other countries each ADH claim incurs a service fee. In Canada, the service fee for ADH claims is CA$79 for an iPhone and CA$49 for an iPad. In the UK the fee is 55 pounds for an iPhone and 39 pounds for an iPad. In the Euro zone, the fee is 69 euros for an iPhone and 49 euros for an iPad. In Switzerland, the fee is 85 Swiss francs for the iPhone and 59 Swiss francs for the iPad. In Japan, the fee is 7800 yen for the iPhone and 4400 yen for the iPad. In China, the fee is 628 yuan for the iPhone and 368 yuan for the iPad. In Hong Kong, the fee is HK$548 for the iPhone and HK$348 for the iPad. In Singapore, the fee is S$108 for the iPhone and S$68 for the iPad.

The underwriters in the various countries are all affiliates of AIG: AIG Europe Ltd., AIG Insurance Hong Kong Ltd., AIG Asia Pacific Insurance Pte. Ltd., or Asian American International Consulting Co. Ltd. The legal names change from one country to the next, as do the corporate structures that unite or separate the sellers, administrators, obligors, and underwriters. But usually, an affiliate of Apple is the administrator while an affiliate of AIG is the underwriter.

Walmart

Wal-Mart Stores Inc. sells the Product Replacement Plan for low-end handsets, with the price of the plan linked to the price paid for the phone. A two-year replacement plan for phones priced from $20 to $40 is $5.00 and from $40 to $60 is $6.50. The price for phones selling from $60 to $80 is $9.00. From $80 to $100 is $12. From $100 to $150 is $19.

For handsets priced above $150, the service contracts are called Mobile Care Plans. A two-year protection plan for phones priced from $150 to $200 is $51. From $200 to $300 is $77. From $300 to $400 is $100. And from $400 to $1,000 is $130.

For iPads and other tablets, the price scale is a little different. The Walmart Product Care Plan for tablets priced from $400 to $500 is $57 for two years of coverage. From $500 to $700 is $89. From $700 to $1,000 is $116. From $1,000 to $1,500 is $129. And over $1,500 is $194. However, the most expensive tablet available in-store, an iPad Air 128GB for the AT&T Mobility network, is priced well under $1,000.

When Walmart sells a "contract phone" -- a phone whose price is subsidized by a wireless carrier, or when it sells a phone or tablet on behalf of another retail partner, it does not offer its own service contracts to the buyer. In other words, the price of that Samsung Galaxy S III smartphone may be discounted from $300 to $29 if the customer agrees to an AT&T subscription, but the service contract won't cost only $5.00.

The obligor of all the Walmart protection plans is Asurion Service Plans Inc. and the administrator is National Electronics Warranty LLC, except in certain states, where an affiliate of Asurion or NEW is designated. Continental Casualty Company, an affiliate of CNA Financial Corp., is the insurance underwriter.

Walmart's Product Replacement Plans and Mobile Care Plans protect the buyer against defects, malfunctions, and certain types of damage, but not loss or theft. Specifically, the service contracts cover spills, drops and cracked screens. But they do not cover the following:

1. incidental or consequential damages;
2. pre-existing conditions;
3. damage from abuse, misuse, introduction of foreign objects into the product, unauthorized product modifications or alterations, failure to follow the manufacturer's instructions;
4. accessories and supplies, including but not limited to: batteries, antennas and styluses;
5. acts of God;
6. preventative maintenance;
7. inherent product defects;
8. damage which is not reported within 30 days after expiration of this plan;
9. loss or damage to stored data, repairs related to installed software or computer viruses;
10. any damage to recording media including any software programs, data, or configuration/setup information;
11. products with removed or altered serial numbers;
12. loss or corruption of data and/or the restoration of software and operating systems;
13. loss and/or theft of the product;
14. loss of use, loss of business, loss of profits, down-time and charges for time and effort;
15. any failures, or parts and/or labor cost incurred as a result of a manufacturer's recall;
16. damage covered under any insurance policy, or any other warranty or service plan; and
17. damage or loss due to war, invasion or act of foreign enemy, hostilities, civil war, rebellion, riot, strike, labor disturbance, lockout or civil commotion.

Radio Shack

Radio Shack Corp. sells a wide variety of smartphones, tablets and dumb phones, at both full price and at prices that are subsidized by a wireless carrier in return for a two-year subscription commitment.

Radio Shack offers accidental damage from handling protection plans on all phones sold with a subscription contract for a specific wireless carrier, and all no-contract phones priced at $300 or more. The plans are administered and underwritten by affiliates of Assurant Solutions.

In their standard form, the protection plans do not cover the following:

1. damage to product due to accident, neglect, misuse, humidity, insect infestation, failure or fluctuation of electrical power (except for operational failure caused by a power surge), improper electrical/power supply, damage resulting from accessories or attachments, rust, corrosion, fire, water, flood, windstorm, hail, earthquake, theft or burglary, negligence, vandalism, transport, riot, environmental conditions, sand, dirt, damage from exposure to weather conditions, any intentional acts caused by you, or any other peril;
2. repair or replacement of consumable items or expendable items, as determined by us, antennas, lamps and batteries (other than factory installed rechargeable batteries);
3. routine cleaning and maintenance, preventive maintenance or "check-outs";
4. painting, refinishing or replacement of cosmetic parts;
5. installation, removal or reinstallation of product or installation of attachments or accessories thereto or damage to product resulting therefrom;
6. damage caused by alterations or modifications;
7. electrical work external to the product;
8. use of supplies not approved by the original equipment manufacturer of the product;
9. damage as a result of causes other than ordinary prudent use for the purposes for which the product was designed;
10. making specification or field engineering changes or performing services connected with relocation of the product, or adding or removing accessories, attachments or other devices;
11. programming and software maintenance, failures from programming changes made after purchase, upgrades or patches;
12. damage or increase in service time resulting from (or which is impractical to render because of) any adjustment, repair or maintenance of the product done by you or any third party;
13. alteration, attachment, addition or connection to another machine or device or any attempt to do so unless we have agreed in writing to such action;
14. service to bring the product into compliance with any law, rule or regulation of any governmental authority having jurisdiction or with any provision of an applicable insurance policy;
15. service to correct any safety or health hazard;
16. service in connection with the installation, discontinuance or removal of an item or product; or
17. claims arising from any breach of implied or express warranty of merchantability or fitness of the product from the manufacturer.

Item (1) would therefore generally exclude accidental damage, given that the words accident and damage are among the first six words in the sentence. Item (9) also would tend to exclude damage caused by drops or spills. However, Radio Shack's protection plans for mobile phones also include an addendum that explicitly covers both accidental damage and screen damage:

The provisions of this addendum provide for the repair or replacement (as applicable) of the product for failures resulting from normal wear and tear and including accidental damage from handling as determined by us (such as drops, liquid spills, and cracks) and failures that occur during normal use and operation in accordance with the manufacturer's written specifications if used in an appropriate operating environment. If you purchased screen damage coverage, this coverage includes accidental damage to the screen on your product, not accidental damage coverage for the entire product. The applicable coverage type and product(s) are listed on your sales receipt.

However, there are still a few exclusions in the addendum, which replaces item (1) in the above list with this language:

Item (1) is deleted in its entirety and replaced as follows: (1) damage to product due to neglect, misuse, insect infestation, failure or fluctuation of electrical power (except for operational failure caused by a power surge), improper electrical/power supply, damage resulting from accessories or attachments, rust, fire, flood, windstorm, hail, earthquake, theft or burglary, negligence, vandalism, transport, riot, environmental conditions, sand, dirt, damage from exposure to weather conditions, any intentional acts caused by You, or any other peril.

Item (9) is then also deleted in its entirety, in the case of mobile phones.

Mobile Device Protection Association

In addition to these robust and credible service contracts backed by Assurant Solutions, Radio Shack also sells additional mobile phone insurance-like plans for some units. The reason we call these plans insurance-like is because they are technically called "Device Protection Services" and they are provided as a member benefit by the Mobile Device Protection Association LLC, not an insurance company.

Therefore, the MDPA is technically selling memberships in an association. However, the replacement of lost, damaged or stolen phones is allegedly a benefit of membership in the association. But the protection plans are not insurance. And they are not sold to buyers based in either North Carolina or Washington.

The price of MDPA memberships for most smartphone users is either $10 a month or a one-time payment of $100, which is about the same as the wireless carriers charge for actual insurance contracts. Membership for owners of other types of units such as the BlackBerry Z10 is $5.00 a month or $50 one-time. But of course, that money is the dues one must pay to be a for member of the association -- not the price of insurance.

Please read the following exclusions very carefully. The following items are not covered by MDPA's Device Protection Service:

• Negligent or unsecured loss or unexplained disappearance such as leaving your device unattended or unsecured.
• Your SIM card and any additional optional accessories that you buy.
• The loss, real or perceived of data, time, financial opportunity, or any other consequence arising from the loss of the use of the wireless device.
• Normal wear and tear of the device.
• Dishonest or malicious acts by member.
• Cosmetic or non-functional damage such as marring, scratching, chipping.
• Liquid damage or loss in a body of water.
• Pervasive corrosion.
• Theft from any premises or vehicle when not reasonably secured (i.e. vehicle windows and doors must be closed and locked).

We're not lawyers, but it would seem that these exclusions would preclude claims for plenty of legitimate instances of damage, loss, or theft. For instance, simply leaving your mobile phone on a restaurant table could be seen as "negligent." Dropping it into a toilet would be damage "in a body of water." Simply losing your phone and not knowing when or how it happened would be seen as the textbook definition of an "unexplained disappearance." And if the phone fell out of your backpack while riding a bicycle, one could say it was not "reasonably secured."

In addition to coverage of some types of loss, damage, and theft, MDPA members also can receive discount benefits at Hertz Car Rentals, Choice Hotels International, FTD Florists, Avis Car Rentals, Omaha Steaks, XM Radio, Allstate Insurance, and LensCrafters, among others. Members also can receive discounts on a weight loss program offered by ViSalus Inc.

However, in our non-lawyer opinion, what they cannot receive is coverage that is as credible and legitimate as the service contracts offered by most retailers or the insurance plans offered by the wireless carriers (see the October 31 newsletter for details on those).

To our profound discomfort, we also found Sam's Club, Dell, Wirefly and Newegg.com to be among the other companies selling MDPA memberships. We also note that the company has an A- rating with the Better Business Bureau in South Florida, primarily because it responds to every complaint about a denied claim with a reference to these onerous terms and conditions.

GWSCA Survey Invitation

The Global Warranty and Service Contract Association (GWSCA) is conducting an online survey to learn what is important to members of the warranty and service contracts industry. The information collected will be used to formulate programs and proposed solutions to commonly experienced industry questions, problems, and fast emerging trends.

The survey is being conducted by Fulcrum Analytics on behalf of the GWSCA. To get started, click here or cut and paste this URL into your browser: surveygizmo.com/s3/1411787/92b03449fbf2

The survey will be open to everyone in the warranty and service contracts industry, and the deadline has been extended until Sunday, December 1.

If you have any questions please email Terry Hawkins at: gterry.hawkins@gmail.com or contact Tara Piazza, SVP of Research at Fulcrum Analytics at 1-212-651-7012, or via email at tpiazza@fulcrumanalytics.com.