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iPhone 7 – insure you’re getting a good deal

14 September 2016

This week sees the much anticipated release of Apple’s iPhone 7 and iPhone7 Plus.

The new smartphones come with a number of upgrades and, depending on the model chosen, a £599 to £900 plus price tag.

Buying a new smartphone requires a hefty investment and most people would struggle to replace their iPhone out of their own pocket if it was lost, stolen or damaged.  Apple offer AppleCare+, a warranty scheme for the new 7 series of iPhones1.  Costing £119, this provides two year’s cover for the handset and technical software support.  But, there are a few other routes to insuring your smartphone:

A dedicated mobile phone insurance policy: This will provide cover if your phone is lost, stolen or broken.  Policies may also provide cover for accidental damage, unauthorised calls, apps, games, music and other valuable digital content, protection in the UK and abroad and, for phone accessories.  Policies vary widely in the level of cover they provide and what they do and just as importantly, what they don’t cover.  Policies can be expensive, so you should shop around to compare premiums and cover levels.

Home contents insurance2 :   Most (95%) home contents policies provide a level of protection for mobile phone handsets while in the home.  However, the level of cover varies significantly (£150 to £15,000) and a number of exclusions and restrictions apply.  For example, of those policies that provide cover, theft is automatically included but accidental damage to your handset will only be covered as standard by 15% of policies.  The majority of policies (66%) will only cover damage to your mobile if the policy has been extended to include accidental damage protection.  Just under a fifth (19%) of policies exclude cover.

Only a handful of policies will cover your mobile phone while you are out and about.  The majority (92%) require you to buy additional personal possessions cover which insurers your personal belongings away from home against loss, theft or accidents.  Again, cover generally only applies to the handset rather than data or unauthorised calls and there is a wide variation in the levels of cover provided. 

Most (71%) home contents policies include cover for replacing digital information following loss or damage to a mobile phone.  Cover varies considerably between policies from £150 to £15,000.

Any claim made for loss, damage or theft of your phone will be subject to a policy excess and this may be higher than on a dedicated mobile phone policy.  Also, if you make a claim on your home insurance your premium may increase when it comes up for renewal.

Packaged current accounts3: Some people may find that their current account provides insurance cover for their smartphone or iPhone.  Just under a quarter (24%) of accounts include mobile phone insurance, which depending on the policy will pay out for loss, theft or accidental damage to your handset as well as cover for breakdown, phone accessories and unauthorised calls.  Depending on the account, the total amount you can claim is set at either £1,000 or £2,000 and there are also caps on the different elements of a claim.       

Home insurance expert, Ben Wilson commented, “Smartphones take a lot of stick - we all know of someone who has dropped, dented or drowned their device and repair or replacement costs can be eye-watering.  So, if you’re investing in a new smartphone it is well worth taking the time to look at your insurance options and making sure you pick one that meets your individual needs.
“While insurance can give you a financial buffer against unforeseen losses, it won’t protect against carelessness – insurers expect you to take reasonable care of your possessions.  So, for example, you may not be covered for the theft of your smartphone if you left it unattended in a public place.”

Ben Wilson continued, “Not all insurance policies cover data and unauthorised calls.  But, if your phone is lost or stolen, there are some simple steps you can take to protect yourself against hefty charges for unauthorised use and replacing data.  Get into the habit of backing-up data regularly.  Use passcodes to protect your handset and data and, download and activate an app such as findmyiphone which will help trace a lost or stolen handset as well as allowing you to remotely erase data.  

“If your phone is lost or stolen contact your provider asap, ideally within 24 hours.  This will enable your provider to stop any calls being made on your account and will limit the amount you can be charged for unauthorised use.”      

- ENDS -

Notes to editors:

1Source: Apple UK

2Source: Defaqto Matrix of 442 home contents insurance policies – instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto (12 September 2016). Percentages are rounded up to the nearest whole number.

3Defaqto Matrix of 145 current cheque accounts - instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto (13 September 2016). Percentages are rounded up to the nearest whole number.