Insuring your mobile phone is not always a straight forward affair and there are a number of issues you need to consider before picking out a policy which will suit you. Our guide aims to shed some light on the process and answer all your questions.
Do I Need Mobile Phone Insurance?
Whilst insurance policies are, in theory, designed to save you money should misfortune befall you, they often turn out to be a false economy.
Phone insurance differs greatly from other kinds of insurance in that price you’ll pay is based entirely on the value of the cover you’re looking for. Unlike with car insurance, for example, other factors such as the demographic you belong to, are not factored in and even your history of passed claims is unlikely to be taken into account.
This means that, whilst you might benefit from lower car insurance premiums for having a track record as a safe driver, you will not be rewarded for being careful with your phone (aside from perhaps a nominal no claims bonus, such as a free battery after two years.) On the other hand if you are a serial loser of phones you won’t be punished with extra charges.
Therefore, if you are sure that you are too careful to need insurance you may wish to avoid effectively subsidising the carelessness of others.
If you are on a pay-as-you-go tariff then, even if your phone is stolen, the thief can only make use of the limited credit you already paid for, so unless you have a particularly expensive handset or feel you are very likely to have a mishap, getting insurance may be a bit much.
Instead you could ‘self insure’, by setting a little money aside each month, roughly equivalent to a premium, just in case of emergencies.
There are other situations in which you may not need insurance. For example, with certain premium bank accounts phone insurance comes free.
If you already have contents insurance your may phone may also be covered, even outside the home. It may be cheaper to add to your contents policy than to get separate insurance for your phone.
However, if you are accident prone, have an expensive handset or are on a contract phone insurance might be ideal. This is because if you have contract you will have to continue paying the monthly fee, even if you lose the phone or it is stolen. What is more you may have to pay for the thief’s phone calls.
Different Types of Cover
There are a number of different cover areas a policy might contain. Your average policy might contain two or three. “Full Cover” policies tend to cover 6 or 8. These are as follows;
Accidental damage: As long as the cause of damage is not neglect, the cost of repair or repayment will be paid. You can also get fire and water cover specifically to cover costs caused by those sources.
Loss: Cost of replacement will be covered, although this sometimes does not apply if the phone was lost in area with easy public access. The cost of accessories and applications and data stored on the phone are not usually covered.
- Theft: Replacement costs will be met. Be aware that definitions of theft vary between providers. For example many insurers do not cover ‘unattended theft,’ where your phone is taken by someone if you leave it lying around.
- Malicious Damage: The cost of your phone will be covered, unless the damage was done by you.
- Mechanical Failures: Covers the cost of the phone breaking outside it’s warranty.
- Fraudulent Calls: Covers the cost of fraudulent calls. Often the cover only kicks in from the time you report the phone as being missing.
- Overseas: Means your policy is effective abroad as well as at home.
- These policy areas will all have different financial limits on them and also different excesses (an extra cost you have to pay in order to claim.)
You will normally be offered insurance when you by a phone or take out a contract, as part of a deal or as an added extra. If you have seen a better deal elsewhere remember that you don’t have to take insurance from you contract provider. However, you could use the offer from elsewhere to bargain with your preferred supplier, as their offers are normally negotiable.
If you need a “full cover” policy you’re better off going with a third party, such as a dedicated phone insurance company. They are specialists and can offer more competitive prices.
It is best to shop around. The easiest way to this is to compare prices online and match your required cover to the best quotes on the market. These will vary according to the cover you need, the age of your phone and its value.
Any provider of insurance should be regulated by the FSA so beware of scam companies who aren’t on their register and don’t be persuaded to rush into buying insurance if you receive cold calls or are subject to a pushy salesperson.
Things to Look Out For
Some network work providers, not being insurance specialists, charge similar amounts for insurance regardless of the value of the phone, which can make it a bad deal. They can also be harder to deal with when making a claim fail to measure up in other ways.
Check out the following things;
- Do they have a data back up system?
- Do they have guaranteed replacement times?
- Do they have any admin fees?
Things You May Need to Make a Claim
If your phone is lost or stolen be sure to inform your insurance company as soon as possible, as the speed of response may effect your claim. If your phone is stolen you will need to report it to the police and get an incident number from them in order to process your claim.
To claim you normally need the following things; the phone’s make, model and IMEI (International Mobile Equipment Identity) number, the phone number and proof of purchase, such as a receipt or dispatch order.
You will also need your insurance documentation so be sure to file it in a safe place.