Mobile phone insurance: are you already covered?

jemma crutchlow-porter
By Jemma Crutchlow-Porter

mobile phone dropped in water©iStock.com/silverjohn

MOBILE phone insurance used to be a complete waste of time, with replacement handsets often cheaper to buy than the cost of the annual premium.

However, with mobile phones now costing well over £500 outright, getting covered seems a lot more sensible.

Whether we end up victim to theft, accidentally smashing the screen or even dropping it down the loo (we've all been there!), having mobile phone insurance can be a reassuring extra to have alongside the protective case and screen guard.

But insurers have a reputation for being reluctant to pay out on claims, with enough details and loopholes to make even the most attractive sounding policy useless for our needs, or overly expensive - especially if we're already covered elsewhere.

Are you covered already?

So before looking for mobile phone insurance, check: is it already covered?

Many household policies and plenty of contracts offer cover for a mobile phone, so it's possible to be protected without realising it.

Mobile phone insurance when you're in a contract

Pay monthly mobile phone customers may have already signed up for insurance from the network when they took out the contract.

Most networks sell insurance as an optional extra at the checkout stage - we actively need to choose to buy it from them, so it's not the sort of thing we're likely to forget if we have.

It's often more expensive than standalone policies or when it's included with other insurance - expect to pay as much as £10 a month or more to cover the most expensive handsets.

The big incentive for getting insurance from our network is that they can provide us with a replacement within 24 hours if our handset is lost, stolen or broken; most other insurers can take considerably longer.

On top of that they also cover us for loss, theft and accidental damage, as well as offering worldwide cover as standard.

Note that while they often also sell "damage only" cover, the prices we've listed below are for full insurance.

Provider Premium Excess Details
ee £8 to £12 per month £0 to £100 Only available to EE account holders
Can be bought separately from device
Policy runs for up to 60 months
o2 £3 to £12.50 per month £20 to £60 Only available to O2 customers
Must be bought within 28 days of buying or upgrading to a new mobile
Policy runs for up to 60 months
three £3 to £14 a month £30 to £100 Must be bought with device, whether new or upgrading
Policy runs for up to 60 months
vodafone £8 to £12 per month £50 to £60 Only available to Vodafone customers
Can be bought separately from device
Three month minimum term
Policy runs for up to 60 months

Note that none of these policies covers unauthorised use - so it's up to us to report the loss of a device as soon as possible to prevent a huge bill being run up in the meantime.

Mobile insurance included in home contents insurance

People with home contents insurance may already be insured for mobile phone theft under that policy, particularly if they've got "personal possessions" or "all risks" cover.

Without these add-ons, however, any cover the policy does offer will often be limited - they'll only pay out on or replace a handset if it was stolen during a break-in, for example, and accidental damage won't be included.

For this reason it's important to double check the details of a policy that says it includes mobile phones, and not to assume anything.

Most home contents policies come with the option to add accidental damage cover, but it's often not included as standard and it can be expensive. It's a similar story with personal possessions cover, but the advantage with both is that it isn't just the mobile we're covering.

Adding accidental damage and personal protection cover tends to cost less than £5 per month with the insurers we looked at: depending on our handset that could be considerably cheaper than arranging cover with our network.

But as noted above, it's important not to assume what that cover includes, or excludes. Airtime misuse will almost definitely not be covered by home insurance, and there are more general small exclusions to watch out for.

One of the biggest disadvantages of using home contents insurance to cover a mobile is that the excess is likely to be much higher than those charged by the networks, and we'll lose our no claims discount if we need to make just one claim - which will lead to higher premiums in future.

Bank account packaged insurance

Packaged bank accounts have come in for fair criticism in the past because of the questionable value of the benefits they offer and the sales tactics used to get people to sign up.

Obviously they're only worth it for people who would be purchasing the products bundled with the account anyway. The three most common "freebies" are travel insurance, motor breakdown cover, and mobile phone insurance.

The more of the benefits we can use the better - and while the travel insurance alone can sometimes pay for itself, but if we're only looking at a packaged account for the mobile insurance we're probably wasting our money.

The exception here may be for joint account holders, who will both benefit from the cover available but only have to pay one account fee.

These accounts tend to offer fairly solid protection - unless we state otherwise below, each of the following provides worldwide cover for loss, theft, damage or breakdown - but how quickly will the handset be replaced? Are unauthorised calls covered?

Account Monthly fee Excess Max claim
basic bank account Basic Bank Account with Tech Pack (more details) £9.50 iPhones: £50 to £100
Other handsets: £25 to £50
£1,000
Features: Unauthorised use cover for up to £2,000
Also includes: Cover on tablets, laptops, smartwatches etc
ultimate reward current account Ultimate Reward Current Account (more details) £12 - £15 iPhone: £50 to £100
Others: £30
£2,000
Features: Unauthorised use cover for up to £1,500
Also includes: Worldwide travel insurance, UK breakdown cover, home emergency cover, card protection
Platinum account
(more details)
£17 iPhone: £100
Others: £50
£2,000
Features:Unauthorised use cover for up to £1,500
Also includes: Worldwide travel insurance, UK breakdown cover, card protection
flexplus FlexPlus current account (more details) £10 iPhones: £50 to £100
Other handsets: £25 to £50
£1,000
Features: Unauthorised use cover for up to £2,000
Also includes: Worldwide travel insurance, European breakdown cover, extended warranties on electrical, card protection
reward silver account Silver Reward account
(more details)
£12 £75 Unlimited
Features: Unauthorised use cover for up to £2,500
Also includes: European travel insurance
platinum reward Platinum Reward account
(more details)
£18 £75 Unlimited
Features: Unauthorised use cover for up to £2,500
Also includes: Worldwide travel insurance, UK breakdown cover
tsb silver account Silver Account
(more details)
£9.95 iPhone: £100
Others: £50
£2,000
Features: Unauthorised use cover for up to £1,500
Also includes: European travel insurance, UK breakdown cover, card protection
tsb platinum account Platinum Account
(more details)
£17 iPhone: £100
Others: £50
£2,000
Features: Unauthorised use cover for up to £1,500
Also includes: Worldwide travel insurance, UK breakdown cover, card protection

Not covered already? Get covered

When every avenue has been exhausted for cover under an existing policy, it may be worth considering mobile phone insurance from a standalone provider.

Some insurers specialise in mobile phones, whilst others cover a wider variety of gadgets.

Types of cover

Like the network operators, many mobile phone insurers offer different levels of cover, with basic policies covering accidental damage only. Expect a comprehensive policy covering loss, theft and breakdown to cost more.

The kind of cover we'll need depends to an extent on the kind of person we are: clumsy but otherwise conscientious types may benefit more from a damage-only deal, for example.

It also depends how much it would cost to replace our handset - and whether a provider will insure it or not. Most cover all makes and models, but there are some that won't insure the very newest devices.

As should be clear from the packaged account policies above, iPhone owners should be aware that they may often have to pay more to protect their phones, with many dealing with them in completely separate policies.

It goes without saying, but always compare policies like-for-like before buying.

Exclusions

The long list of exclusions is the biggest reason many people decide against buying mobile phone insurance. While some exclusions are expected, others are simply ridiculous.

Here's a few examples of typical exclusions to be aware of:

Is it worth it?

Those of us who've just splashed out on a brand new smartphone - whether we've just committed to a two-year contract, or bought one outright - should consider how they'd cope financially if the dog chewed it to pieces, or we left it on a cross country train.

Would we have the cash to buy another? Probably not.

Mobile phone insurance can have its place then - and the promise of a replacement within 24 hours for just a few pounds a month seems reasonable.

However, with so many exclusions - such as failing to report a loss within 24 hours, having the phone stolen from your desk when you nip to the toilet, or if you give it to your child and they lose it - that make it difficult to make a successful claim, it can also seem like a waste of money.

If the cost of the phone doesn't outweigh the monthly premium and any excess when making a claim, it could be worth considering self-insuring.

Instead of paying an insurance provider a monthly premium, stash the cash to one side. If anything happens, simply dip into the savings to buy a new handset.

Mobile phone insurance can be suitable for some people in some instances, but those looking to buy cover should also look at whether they might be covered already and what kind of protection they want before shopping around for a policy.

Please note: This article presents an opinion based on general market research - if you're considering purchasing a mobile phone insurance policy you should speak with an Independent Financial Adviser to get specific help for your individual situation..

Comments

1
31 March 2015
Dennis tate

A lot of these phone insurance companies have clauses in for theft from your person, that is it has to be by force, and pinching from you unknowingly is not a valid claim. Beware read the terms and conditions thoroughly.


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