Do You Need Mobile Phone Insurance?

by Sandra Henshaw - , Last Updated on June 21, 2014, Buying Guides

In today’s market, where a top of the line mobile handset can cost hundreds of pounds, the thought of insuring your phone can be pretty tempting. Most mobile carriers will offer you mobile insurance, as will many home insurance companies. But do you really need it? We’re taking a close look at mobile insurance, whether you need it or not, what it will cover, and what your other options are if you choose not to go with insurance. So before you shell out, you might want to read on…

When You Do or Don’t Need Insurance…

Let’s start with the basics. There are some instances in which you might want to consider getting insurance (or one of the other options that we’ll go into later). If you’ve got an expensive handset and you’re in a long term contract that includes payments for that mobile, then insurance can be a good deal. If you can’t afford to replace your phone should it get stolen, or you rely on your phone and want an instant replacement, then again, insurance might be a good plan. Finally, on top of all this, if you’re the kind of person that repeatedly loses or damages mobiles, then you might want to cough up too.

What about when you don’t need mobile insurance though? Well, if you have an older phone that isn’t worth a lot, then mobile insurance will probably end up costing you more than you’d get as a pay out. If you’ve never lost or damaged a phone before, then you might want to risk not getting insurance either, though there’s a first time for everything. Finally, you might find that your mobile is covered under your home insurance so you might not need the extra mobile insurance, though this can have down sides as we’ll get to in a moment.

What Insurance Does and Doesn’t Cover…

Mobile insurance comes in a lot of different varieties, and you’re going to need to check your policy before signing to find out exactly what is covered. However, you’ll probably find that it’s not quite as comprehensive as you think it might be. In general, you’ll be covered in case your phone is lost, stolen or broken. Again, generally, you’ll be covered for accidental damage to the phone itself, any apps or music of value that were on the device, as well as for accessories such as phone cases. You’ll probably be covered both inside the UK and abroad, though this varies. Finally, and fairly importantly, you should be covered for unauthorised calls. This means that should your phone be stolen and the thief then uses it to call Australia, you shouldn’t need to pay those charges on your phone bill.

There are quite a lot of exceptions, however. Your policy probably won’t cover carelessness. That means if your phone is broken because you left it on top of your car and drove off, or is stolen because you left it unattended on a table in a restaurant, then you won’t get your cash. Some policies don’t cover theft without force, so if you’re pickpocketed, no pay out. Leaving your phone somewhere accidentally is also often not covered, nor is water damage.

Exceptions vary a lot by company, but many companies won’t cover a phone that’s over a certain age, or users that are under a certain age (many don’t cover teenagers, for example). Some will require you to report the loss within a certain amount of time (say, twenty four hours) or risk forfeiting some or all of your coverage. Many insurers only insure your exact combination of phone and SIM card, so if you change SIMs or change handsets your coverage becomes invalid. Finally, some companies will attempt to repair a phone rather than replacing it, so you might not get a new phone out of your policy.

All of these are excellent reasons why you really need to read a policy incredibly carefully before signing. Make sure you know what’s covered and what’s not by reading ALL the small print on a contract.

Alternatives to Mobile Insurance…

You don’t have to get mobile insurance, but if you still want the comfort of knowing that there’s money there to get a new phone should the unfortunate happen then you have a couple of other options.

The simplest option is to self insure. Just make sure that there’s enough money in your bank account to replace your phone if necessary. The advantage of this is that if nothing happens to your phone you’ve still got the cash, rather than the insurance company having it. The disadvantage is that you may not be covered for those unauthorised calls, though some operators do place a limit on the amount you can be charged after you’ve reported your phone as stolen.

Some home contents insurance will also cover mobile phones, and this can be a cheap way of getting mobile insurance. But the downside of this is that once you’ve made a claim for something as small as a mobile, you might find that your premiums skyrocket for all of your home insurance, which can get costly. Plus, home insurance claims can take weeks to go through and again you probably won’t be covered for unauthorised calls.

Finally, some banks offer mobile insurance as part of a package deal when you sign up for an account. Again, this can be a cheap way of getting mobile insurance. However, bank deals are generally not as comprehensive as insurance company deals, so you’ll really need to take a close look at what kind of coverage you’re getting.

Should You Sign Up?

Whether or not you sign up for mobile insurance is really a personal decision. If you’ve got an expensive phone and you have a past history of losing or breaking mobile phones then insurance should be something that you consider. Is it a good deal though? That rather depends. You can pay anywhere from a couple of pounds a month to almost twenty pounds, depending on which option you go with. Multiply your monthly payment by the number of months in your contract to find out the total price that you’re paying. Is that a sum that’s worth it? If it’s more than the cost of your phone, certainly not. If it’s less than your phone’s price, it may well be.

Regardless of which option you choose, always make sure that you know exactly what you’re getting into, what’s covered and what’s not, as well as the procedures for reporting theft or breakage to your company- since these processes vary and if you make a mistake you may lose your pay out.

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