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Mobile Phone Insurance

Many people buy mobile phone insurance from their phone network, assuming that by doing so, they are covered. Often that means you are paying more for the insurance than you need to, and not getting cover that is as wide as you could get elsewhere.

Why buy mobile phone insurance?

Many people buy mobile phone insurance from their phone network, assuming that by doing so, they are covered. Often that means you are paying more for the insurance than you need to, and not getting cover that is as wide as you could get elsewhere.

Other people assume that their mobile phone will be covered by their household insurance. That is a dangerous assumption to make, because even if there is an element of cover under your household insurance, there will be major gaps in the cover that could give you problems if you need to make a claim.

Why shouldn’t I buy mobile phone insurance from my phone network?

Because they have a captive audience, generally the phone networks charge more for their mobile phone insurance than dedicated mobile phone insurance companies. Often people do not notice the insurance premium because it’s just a small amount that gets absorbed into the bill each month, but when each of those monthly payments are added up over the course of a year, the cost can become substantial.

The phone networks will generally give you next day replacement of your phone if you buy mobile phone insurance from them, but you are limited to whatever models they have in stock. That can mean that you end up with a phone that is no longer compatible with any accessories that you have bought.

You will only be covered for the phone that you bought from the network. If you decide to upgrade by buying a SIM free phone, either from a mobile phone dealer or second-hand from eBay, the phone will not be covered.

And it is usually only the phone itself that is covered. By buying a dedicated mobile phone insurance policy you can extend the policy to cover unauthorised calls that were made after it was lost or stolen, the cost of replacing any digital downloads such as music or apps, and a range of other things such as your accessories.

Why shouldn’t I rely on my household insurance?

As with buying mobile phone insurance from the phone network, it is unlikely that your household insurance will cover things like unauthorised calls and digital downloads. However, there may be other, more serious restrictions.

Many household policies do not cover accidental damage. That means that if you lose your phone in a house fire or if it is stolen in a burglary you are covered, but if it is damaged because you have dropped it, it is not.

Also, some household policies will not cover items away from your house, or if they do, they may restrict cover to the UK which could mean you were not covered when you were on holiday. They may also place a limit on the value of items that you take away from your house. With a new iPhone 5 costing around £600 at the time of writing, if there is a value limit in your household insurance policy that could be a problem for you.

Finally, the excess under a household insurance policy will almost certainly be more than under a dedicated mobile phone insurance policy, and if you make a claim, it could increase your household insurance policy premium. This could mean that even if you have cover, it is not financially viable to put in a claim when you need to.