Mobile phone insurance

Insurance could protect your mobile phone or smartphone from damage, theft and loss, but consider all the cover options and beware of exclusions and excessive premiums.

Key points

  • Don't just accept a policy offered by the retailer selling you the mobile phone - shop around!
  • Consider cover you may already have through your warranty, home insurance, travel insurance, bank account or credit card
  • If this is insufficient, think about extending cover on your home insurance, or taking out a dedicated mobile phone insurance policy
  • Please note Gocompare.com DOES NOT currently offer a dedicated mobile phone insurance service

Mobile phones, many of them expensive smartphones, are a modern-day, must-have for many.

We're lost without them (literally, sometimes) and rely on them for keeping in touch with loved ones, snapping pictures and listening to music.

But carrying a mobile phone - whether it's top of the range or not - means you're vulnerable to dangers like theft, loss and damage.

Many smartphones are very expensive and you may have locked yourself into a long-term contract to pay for one - a contract you'll have to keep paying, even if you no longer have the phone.

There were 742,000 victims of mobile phone theft in England and Wales in 2012-13, according to the Crime Survey for England and Wales.

There are a variety of ways to cover your phone, so consider the pros and cons of each before deciding.

Mobile phone insurance

When you buy your handset, the sales person or your mobile phone provider may try to add insurance to your policy for a set monthly amount.Mobile phones

The cost and levels of cover can vary significantly and, while this may seem like the hassle-free option, the price can be more and the cover less comprehensive than with other deals.

Shop around before committing as there are other mobile phone insurers in the market - but please note that Gocompare.com DOES NOT currently offer a mobile phone insurance comparison service.

Remember that you'll have a warranty with your new mobile. On some policies you may be paying to cover a phone in the event that it breaks, but this will be unneccessary when the mobile is under warranty.

Also think about your own character and personality (honestly!). How often do you misplace things? Have you lost a phone in the past?

What does mobile phone insurance cover?

If you think you need a dedicated mobile phone policy, make sure you read the terms and conditions thoroughly.

Did you know...?

  • Theft without force or unattended theft may not be covered

For example, one of the main reasons people take out this cover is to have a rapid replacement service, meaning they're not left without their beloved phone.

But not all policies guarantee instant replacement, and some will insist on trying to repair your device before replacing it.

Some policies may offer a replacement phone that's reconditioned or second hand, and you may be liable to pay an excess.

Excesses can depend on whether your phone was lost, stolen or damaged - you may well have to pay more in the event your phone is lost.mp3 player

Other things to look out for on a policy include:

  • Insurance for unauthorised calls and downloads
  • Overseas protection
  • Accidental damage cover
  • Insurance for phone accessories
  • Cover for phone content such as music, games and apps

Exclusions on mobile phone insurance

There have been complaints about certain mobile phone insurers from customers when they've come to make claims, and it's always prudent to be aware of clauses and exclusions.

Did you know...?

  • There could be age-based restrictions on policies - some won't cover old phones, some won't cover young people!

For example, theft without force or unattended theft may not be covered - potentially leaving you uninsured if your phone is pinched from your pocket, or taken from a table in a restaurant when you're distracted.

Some insurers may refuse to pay out if you accidentally leave your phone in a taxi, or if you're deemed to have been 'careless' in one of a myriad of other ways. Any sort of water damage might fall under such an exclusion.

There may be a set time limit within which you have to report the phone as lost to the police or the insurer - perhaps 12 hours or less.

Some policies will exclude cover if you're not using the original Sim card, and there could be age-based restrictions - some won't cover old phones, some won't cover young people!

Gadget insurance

If you're searching for phone cover, don't rule out providers advertising gadget insurance. Many of the providers are likely to be the same - you just specify your mobile phone when describing your 'gadget'.

As such, all the pros and cons that have been detailed for your consideration when seeking mobile phone cover need to be considered when buying gadget insurance.

Insuring possessions away from home

Home insurance and mobile phones

Arranging mobile phone cover through your home insurance can be a simple and cost-effective option, but remember there are some downsides to consider.

A claim is likely to take some time to process, potentially leaving you mobile-less for some weeks. You may also not be covered for specialist things like unauthorised calls and data downloads.

"If you're considering taking out insurance for your mobile phone, it's well worth checking your contents insurance as you may already be covered," said Gocompare.com's Ben Wilson.

"It's also worth checking that the level of cover offered by your contents insurance is adequate for your phone, or if there are any additional costs for insuring your phone for use outside of the home."

How to add mobile phone insurance to your home policy

When you compare contents insurance through Gocompare.com, our easy-to-use forms will ask you to estimate the total value of your contents and whether you need cover for bicycles and laptops away from home.

Did you know...?

  • Damage done by liquid may not be included, even if you have accidental damage cover

You'll also be asked to name and describe any individual items that are worth over £1,000, and whether you want those items to be covered away from home.

You'll then be asked to input how much cover you need for any other personal possessions away from the home.

Note that any individual item/phone included in this section must be valued under £1,000, even though the total sum covered may be significantly more.

After you've answered these questions you'll see a handy table with a summary of all the cover you've requested.

Note that, in the event of a claim, insurers usually apply a 'single article limit' to items. This is the maximum amount an insurer will pay for an item, and this may differ between item types as well as between insurers.House

Accidental damage and mobiles

Consider whether you want to include accidental damage cover for your mobile phone(s) - some insurers may exclude phones from this form of cover, so make sure you check your terms and conditions.

On 18 September, 2014, Gocompare.com analysed 336 home contents insurance policies listed on the matrix of independent financial researcher Defaqto.

The research revealed that 314 provided cover for mobile phones within the home as standard, so the majority of policies provide some cover if your phone is stolen during a burglary.

However, only 55 of the policies included accidental damage to mobile phones which occurs within the home as standard - 160 offered it as an optional extra.

"To make sure your phone's covered for damage caused by dropping it, stepping on it or other mishaps, you'll usually need to have cover for accidental damage on your contents policy," said Wilson.

"Cover can vary between insurers and some will have exclusions on the cover they provide, such as not insuring your phone for damage by liquid."

Excesses and no claims bonuses

When covering your mobile phone under you home insurance policy it's important to remember that you'll be liable to pay the excess attached to the policy, and such an excess may be higher than on a dedicated mobile phone insurance policy.

Things to consider

  • Protecting your phone's data needn't cost anything at all - make sure you back it up regularly

In some cases the excess could be higher than the cost of replacing the phone, in which case it may be worth paying to replace the phone yourself.

Also consider the impact a claim for a mobile phone will have on your home insurance no-claims bonus. This may make paying an additional amount for gadget cover worthwhile.

Mobile phones as presents

Don't forget to update your contents cover after Christmas, birthdays and other big events.

"If you're looking to get a new phone, or are lucky enough to receive an expensive phone this Christmas, give your insurer a call to make sure it's covered as you may need you to declare particularly valuable items," said Wilson.

Other options for mobile cover

Before taking out insurance for your mobile, check that you're not already covered with travel insurance, a packaged bank account or premium credit card.Credit cards

Such options can seem like a cost-effective way of arranging cover, but you need to check that the protection is suitable for your needs - there can be many limitations and exclusions.

If you're thinking about such an option, make sure you avoid doubling up on cover - this could complicate claims and can make insurance more expensive in the future.

You might also want to think about self-insuring, whereby any money you would have paid as an insurance premium goes directly into your own savings account instead.

The longer you go without an incident, the more you'll benefit, but - of course - if your phone is lost, damaged or stolen, you may not have saved enough to pay for a replacement, or even for any unauthorised calls.

It's not all about insurance...

For many people, the most valuable thing on their mobile phone will be the things that no insurance can replace - contacts, photos, files and other pieces of vital data.

Did you know...?

  • Cover for personal belongings in a car is typically limited to fully comprehensive car policies and restricted to around £100

Protecting this needn't cost anything at all - just make sure you regularly back up your phone, considering cloud storage options as well as physical back-ups to mobiles, tablets and hard drives.

If the worst does happen, insurers are now offering digital download cover, which could cover the replacement of music, movies, ebooks and other data.

Perhaps the most valuable advice, though, is to look after and protect your mobile phone to avoid all the hassle and cost associated with theft, loss or damage.

By Emily Bater