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Mobile Phone Insurance: Should You Consider Insuring Your Expensive New Smartphone?

Posted on the 12 May 2015 by Adeyemiadisa @adeyemiadisa

Last year in the UK, an estimated 2000 smartphones were stolen every day. That’s a staggering number, and though the statistics look better for 2015 smartphone theft is still a serious problem.

Water resistant Sony Xperia Z Ultra
Naturally, high end mobiles like Apple’s iPhone 6 and Samsung’s Galaxy S6 Edge are the coveted prizes for mobile phone thieves, and they can command top prices on the black market.

But even mid-tier and low-end smartphones have become targets of the criminal class, particularly as they are easier to crack and reformat so they can be shifted on the underground market.

Is mobile phone insurance a sound investment?

So what’s a savvy phone owner to do? Depending on your income, any smartphone can be a sizable investment and its loss can be more than an inconvenience.

Mobile phone insurance offers some protection, and UK consumers are increasingly opting to insure their smartphones against theft, as well as loss or damage.

But is mobile phone insurance always a sound investment, or are we merely paying for the illusion of safety and the promise of peace of mind?

To Insure or Not to Insure…

The question of whether or not to insure your smartphone can be a thorny one, and there’s a lot to consider before coming to a final decision.

Comprehensive mobile phone insurance isn’t cheap (upwards of £13 a month for a full featured policy), and over time may amount to more than the total cost of repairing or replacing your smartphone.

Add in the allowable excess, and you may end up paying more in insurance costs than your phone is worth. Before signing any insurance contract, ask yourself the following questions:

#1). How Much will it cost to replace the device?

A high end smartphone can run anywhere from £500 to £700, and the cost of repairing or replacing it can be a serious financial stumbling block. If you have a lot invested in your mobile, insurance may be the right choice.

#2). What are your usage patterns?

If your smartphone is an invaluable business tool, and you rely on it to make your living, than insurance can be a sound investment. On the other hand, if you use your mobile for taking selfies and playing games, the loss, while inconvenient, may not be as detrimental.

#3). Are you prone to losing your mobile?

If you have a history of losing your smartphone, insurance is probably a good idea. However, if you have never mislaid your mobile, or had it stolen, you may be better off putting the money you would be spending on insurance in the bank for an eventual upgrade.

#4). How long have you had your mobile?

If you have an older model handset, the cost of insurance may be more than the mobile is worth. Moreover, some companies will not insure older model smartphones.

Ultimately, you must balance the value of your smartphone against your usage patterns and the total cost of insuring the device. Even then, you must be sure that the policy your purchase actually offers the protection you are paying for.

Loopholes and the downside of mobile phone insurance

While mobile phone insurance can deliver some peace of mind, it is important to tread carefully. Not all insurance policies are created equal, and many firms insert clauses and loopholes that exclude many common claims.

You may think you are fully covered against any loss or damage, but when the time comes to make the claim you may find that you are out of luck. Consider the following common insurance loopholes:

#1). Theft

Most insurance policies cover theft, but if you scan the fine print you will find that they only cover the loss in certain circumstances.

In many cases there is an owner’s responsibility clause, which exempts the insurer from paying the claim if they decide you are at fault for the loss of your device.

So, if your mobile is stolen from your home during a burglary you will be covered, but if it’s snatched while you’re have a few pints in the pub your claim may be denied.

#2). Excess

Most insurance policies carry an excess. This is the amount you are required to pay towards the repair or replacement of the insured device.

Unlike home or car insurance, mobile phone policies often require the claimant to pay any excess up front to the insurer when a claim is filed.

In extreme cases, a policyholder may be expected to pay off their premium in addition to the excess before a claim can be settled.

#3). Damage

Again, the excess comes into play here, but there are often restrictions on what damage will be covered and when. For example, if your smartphone is damaged within the first 60 days of purchase you may not be covered under your insurance.

Your insurer may claim that you should have purchased the manufacturer’s extended warranty, and so you are responsible for the repairs. When it comes to mobile phone insurance, you should also remember that you get what you pay for.

If you opt for a low cost policy, you are unlikely to get full cover. But even when you pay for a top of the line policy, hidden clauses and clever loopholes may mean that you actually have less cover than you expect.

Shopping for Mobile Phone Insurance

Depending on the value of your smartphone, and how much you have invested in it both financially and personally, mobile phone insurance can be a sound decision.

However, when shopping for smartphone insurance it is important to read the small print, and to be mindful of any loopholes that may negate your investment. Ask questions of the insurance provider, and do not be afraid to push them on any points that you find confusing or contradictory.

It’s your money, and if they cannot fully address your concerns you should look elsewhere for an insurance provider. Ultimately, the decision to insure your mobile phone rests with you, and only you can balance the total cost of insurance against the peace of mind it can provide.

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