Mobile phone insurance is something you don’t think about until you lose your phone and suddenly your whole world collapses. However, the problem with phone insurance is that it’s normally very overpriced. Here’s how to keep your phone safe without breaking the bank.
- What does phone insurance cover?
- Do you even need phone insurance?
- The 4 different ways to insure your phone – which is best for you?
Mobile phone insurance will usually cover loss, accidental damage and theft across the globe. You can expect to pay on average £5 a month with most mobile phone providers or between £20 and £60 a year with independent insurers. Generally the more expensive the phone is, the costlier the insurance.
When you’re setting up a new contract, or buying a new handset, the retailers will often try to sell you insurance with the lot, especially if you’re getting a relatively high-end model. Don’t get sucked in! With some quick research you’re more than likely to find a better deal elsewhere.
This is an important question to consider. Obviously, losing your phone is extremely annoying and can be an expensive thing to replace. However, companies will often try to frighten you into paying over the odds for some cover. Consider these questions before you jump straight in:
- Have you lost a lot of phones in the past?
- Are you prone to breaking gadgets?
- Do you live in a high-crime area?
If you answered ‘no’ to these questions then insurance is probably a waste of money. If, on the other hand, you answered yes to any of them, chances are that insurance will be cheaper than the cost of replacing your phone time and again.
- If you’re on pay-as-you-go, then the risks are minimal as you haven’t set up a direct debit so there’s a limit to the amount of fraudulent calls that can be made. Insurance in this case should only really be necessary if you’ve got a very expensive, high-tech gadget, and even then you may be able to get it covered on your home insurance.
- If you’ve got a contract phone and you’re likely to lose or break it, then it’s best to get cover for your phone. This is because even if you don’t want to replace the phone, you might still have to pay the monthly fee until the contract runs out.
Once you’ve decided that you need insurance, the next thing to consider is the best way to go about it. There are a number of different ways you can cover your phone including:
- Getting insurance specifically for your phone
- Including it in your home insurance
- Getting phone insurance with your paid-for bank account
- Insuring it yourself
Mobile phone providers typically charge about £70 a year for insurance, regardless of the value of your handset. This is good if you’ve got a more expensive handset, as you will be getting more for your money if you do lose your phone. However, it’s too much for cheaper models.
For handsets under £200 it’s best to go with TalkCover who provide insurance for pay-as-you-go and contract phones for under £20 a year, plus they’re currently giving away three months free on all their annual policies. Prices will vary depending on the kind of phone you have so it’s worth checking it out to see how much a specific quote would be.
For handsets over £200, it’s worth shopping around. As always, it’s best to go with an insurer that covers the most for the lowest rate. We like insurance2go, which charges £3.99 a month for phones up to a value of £700, and just £34.99 for 12 months.
Home contents insurance is a must if you have possessions. If you don’t already have it, then check out our article on the cheapest deals for you. As well as protecting any accidental damage to the building, like fire, floods or vandalism, it will also provide cover for the contents of your home, like your TV, sofa and clothes.
Some home insurance providers will also provide extra cover for items that are taken out of the home, like handbags, laptops, bicycles and mobile phones. We’ve taken a look at the ones that offer mobile phone insurance as an optional extra.
Post Office home insurance provides some cover for mobile phones under its contents insurance. It offers standard cover against perils within the home (theft, fire, flood etc) but does not include loss or accidental damage.
You can purchase extra cover when you sign up to cover accidental damage within the home, and personal possession cover away from the home. There is, inevitably, an extra charge for this depending on the value of your phone, and the prices do tend to vary quite drastically so make sure you compare the cost before you commit.
There a quite a few banks that offer mobile phone insurance when you sign up to their paid-for current accounts. Here are a couple of our top picks.
NatWest Select Platinum account
For a monthly fee of £16, you can get a whole host of benefits with this account including breakdown cover and annual worldwide travel insurance.
Their mobile phone insurance will cover your phone (even iPhones) if it’s lost, stolen, or damaged for up to a retail value of £1,000. They’ll also cover you for unauthorised calls of up to £1,500.
As well as all this they also provide National Trust family passes and Tastecard membership.
Lloyds TSB added value accounts
With the silver, gold, platinum, or premier account from Lloyds you can get AXA travel insurance and breakdown cover, as well as mobile insurance. For example, with the silver account, your mobile phone insurance covers the retail cost of your phone up to £2,000; the cost of replacing or repairing the phone; unauthorised calls of up to £1,500, and the cost of accessories. It will also cover you worldwide. The excess is quite high though: £50 or £100 for iPhones.
The fee for a silver account is £9.95 a month. That’s £119.40 per year.
This really can be the best form of financial protection, and is ideal if you’re not prone to breaking or losing your phone very often. By setting up a standing order of around £5 a month into a high interest savings account you can quickly accumulate enough money to buy yourself a new phone if yours gets damaged or stolen. See our article on savings accounts for more information.
If you’re unlikely to claim on your insurance then it can feel as though you’re just throwing money away if you take out any type of cover. The good thing about self insurance – i.e. setting up a special savings account to cope with loss or damage – is that you can quickly save up enough to pay for a brand new phone if yours does happen to go missing or get damaged and you can simply stop paying money in when you feel as though you’ve accumulated enough. And, because you’ve got it in a high-interest account it’s actually likely to make you money, so if you don’t end up claiming the cash and interest is all yours.
Why doesn’t everyone self insure then? The downside to insuring yourself is that if something happens to your phone after just three months or so, you’re unlikely to have enough in your account to buy a decent new phone straight away. Also, the money in your account may not cover the cost of any fraudulent calls made on your phone. So keep that in mind if you decide to be your own mobile phone insurer!