Refusal to honor Insurance Contract

On the 08/02/2013 I purchased a cellphone from Edgars and opted to take the cellphone insurance with it. Two weeks ago I went in to submit a claim after having my cellphone ****** and was then informed that I did not have he cellphone insurance as requested. I went home and got the proof that I had indeed purchased the cellphone insurance (Policy Ref Number: TP***) and was then contacted by one of their consultants to inform me that even though I app**** for it and the application had been captured, the application was never processed to completion.<br> Furthermore, I am now told that they will honour my claim if I make a payment of R1200.00 which is absolutely ridiculous. The cellphone I purchased on the 08/02/2013 was R1999.90.<br> How am I now being held responsible for an error made by Edgars staff?<br> How must I now pay R1200.00 for Edgars' mistake when I did everything I was supposed to?<br> The purpose of insurance is to cover yourself in the event of loss, but in this case Edgars is causing me more of a loss than anything else. Please Help!!!