Do you need mobile phone insurance?

In the event that your phone is stolen, destroyed, or damaged, mobile phone insurance will pay for its replacement or repair. But are these policies worth the money, and how can you tell if you need them? In order to help you make an informed decision regarding mobile phone insurance, we will examine the fundamentals below.

Is mobile phone insurance necessary?

There are reasons why mobile phone insurance might sound like a good idea. For example, if:

• you have a history of lost, stolen or broken phones
• you have an expensive smartphone and/or you’re locked into a long-term contract
• you couldn’t afford to replace the handset and wouldn’t want to downgrade to a cheaper model
• you rely on your mobile phone and would need an instant replacement if it was lost, stolen or damaged (bear in mind that you’d need to choose a policy offering a rapid replacement service – not all of them do).

But while all these might be true, mobile phone insurance isn’t necessarily the answer. For example:

• it’s often quite expensive
• there are better value alternative options available
• many policies contain exclusions that make them difficult to claim on. For example, while they usually cover the cost of replacing apps and music, the insurance doesn’t offer any protection against loss of data.

What does mobile phone insurance cover you for?

At a basic level, mobile phone insurance covers you in case your phone is lost, stolen or broken.

Some policies also offer cover for:

• unauthorised calls
• accidental damage
• phone accessories
• protection while abroad, as well as in the UK
• apps, games, music and other valuable content.

How much does mobile phone insurance cost?

Mobile phone insurance isn’t always cheap and the cost depends on things like the phone brand, model and the level of cover. The way you pay (annual or monthly premiums) and any extra features that you include in your policy can also affect the cost.

Is it value for money?

Value for money isn’t just about price. Always check exactly what you’re getting for your money and whether it’s suitable for your needs.

If you need a speedy replacement handset, for example, make sure you get a policy that includes it.

You might be offered mobile phone insurance when buying a new phone or contract. So make sure you shop around for a better deal before accepting.

Alternatives to mobile phone insurance

Self-insurance

To self-insure, you can simply save up the money you would have spent on mobile phone insurance and put it into a rainy day or emergency cash pot.

When you’ve built up a fund, you’ll have the money to replace your phone if you ever need to or any other unexpected costs. There are some important points to consider here:

• If you don’t lose or break your phone, the money is in your bank account rather than the insurance company’s.
• You might lose or break your phone before you’ve saved up enough money to cover a new one.
• One of the biggest expenses when a phone is stolen can be unauthorised calls to premium rate numbers made in the period before you report the phone as stolen – you’ll have to pay for these too. If you decide to self-insure, make sure you put the money into a savings account where you’ll be able to access your money quickly.