Do you need mobile phone insurance?

There are reasons why mobile phone insurance might sound like a good idea. For example, if:

• you have a history of lost, stolen or broken phones
• you have an expensive smartphone and/or you’re locked into a long-term contract
• you couldn’t afford to replace the handset and wouldn’t want to downgrade to a cheaper model
• you rely on your mobile phone and would need an instant replacement if it was lost, stolen or damaged (bear in mind that you’d need to choose a policy offering a rapid replacement service – not all of them do).

But while all these might be true, mobile phone insurance isn’t necessarily the answer. For example:

• it’s often quite expensive
• there are better value alternative options available
• many policies contain exclusions that make them difficult to claim on. For example, while they usually cover the cost of replacing apps and music, the insurance doesn’t offer any protection against loss of data.

At a basic level, mobile phone insurance covers you in case your phone is lost, stolen or broken.

Some policies also offer cover for:

• unauthorised calls
• accidental damage
• phone accessories
• protection while abroad, as well as in the UK
• apps, games, music and other valuable content.

But policies vary widely, both in the cover they offer and their ‘exclusions’ (things you’re not covered for).

Here are some of the main exclusions that can appear in a policy:

If you drive off with your phone on the roof of your car, for example, your insurer might reject the claim on the basis that you didn’t take reasonable care. Similarly, you won’t be covered for any damage found to have been caused by you intentionally. 

If you leave your phone on the seat of your car or on a table in a cafe and it’s not there when you go back for it, you probably won’t be covered.

Check your policy wording or ask your insurance company for clarification.

Make sure you report your phone missing as soon as possible.

Some insurers won’t cover you – for the phone itself or for unauthorised calls and downloads – if you leave it more than 24 hours (or even 12 hours for some insurers) before reporting it to them and/or the police.

If you’re prone to dropping your phone in the loo or leaving it in your jeans while they go through the wash, check that your policy covers you for water damage – some don’t.

Again, you might find you’re not covered here because you haven’t taken ‘reasonable care’.

You might not be covered if you don’t have the original SIM card in your phone – perhaps you’ve changed providers and inserted a new SIM card, or you’re temporarily using a different handset.

If your phone is damaged or breaks down, some insurers will try to repair it or provide a refurbished phone rather than give you a replacement.

If this is the case, you’ll have to prepare to be without a phone while yours is being fixed.

This normally takes between four and seven days.

You might struggle to find cover if you – or the child that you’re getting it for – are under the age of 16 (or 18 in some cases).

Mobile phone insurance isn’t always cheap and the cost depends on things like the phone brand, model and the level of cover. The way you pay (annual or monthly premiums) and any extra features that you include in your policy can also affect the cost.

Value for money isn’t just about price. Always check exactly what you’re getting for your money and whether it’s suitable for your needs.

If you need a speedy replacement handset, for example, make sure you get a policy that includes it.

You might be offered mobile phone insurance when buying a new phone or contract. So make sure you shop around for a better deal before accepting.

To self-insure, you can simply save up the money you would have spent on mobile phone insurance and put it into a rainy day or emergency cash pot.

When you’ve built up a fund, you’ll have the money to replace your phone if you ever need to or any other unexpected costs. There are some important points to consider here:

• If you don’t lose or break your phone, the money is in your bank account rather than the insurance company’s.
• You might lose or break your phone before you’ve saved up enough money to cover a new one.
• One of the biggest expenses when a phone is stolen can be unauthorised calls to premium rate numbers made in the period before you report the phone as stolen – you’ll have to pay for these too. If you decide to self-insure, make sure you put the money into a savings account where you’ll be able to access your money quickly.

You’ll probably find that your home contents insurance covers your mobile phone if it’s stolen during a house break-in.

Your insurance company might also offer you the option of adding accidental damage cover for your phone in the home, or cover for your belongings – including your phone – outside the home.

Here are some things to consider if you’re considering including your phone on your home insurance:

• It’s a relatively cheap way of insuring your mobile phone (but see the following two points).
• If you do have to claim for your phone on your home insurance, your premium might increase when it comes up for renewal. For this reason, some people prefer to keep their home insurance and their mobile phone insurance separate.
• Again, if you do have to claim, the excess (the amount you have to pay towards the claim) might be higher on your home insurance than it would be if you had separate mobile phone insurance.
• Home insurance claims generally take some time to go through, leaving you without a mobile in the meantime. If you choose the right mobile phone insurer, however, you should be able to get a new handset straight away.
• Unauthorised calls probably won’t be covered.

Packaged bank accounts usually offer mobile phone insurance as one of the benefits in return for a monthly fee:

• This can be a relatively cheap way of insuring your mobile phone.
• If it’s a joint account you might even get both yours and your partner’s phone insured for the same fee.
• Always check the level of cover – does it meet your needs? How quickly will your handset be replaced? Will you be covered for unauthorised calls?

If you’re thinking of going for a packaged bank account, make sure the benefits you get outweigh the cost of the account.

There are a number of things you can do to keep your mobile safe.

You can ask your insurer to cancel your policy at any time, and there are usually no cancellation fees. If you’ve paid upfront and haven’t made a claim, you’ll receive a refund for the remaining months.