Do you need mobile phone insurance?

Why might you need cover?

You may want to insure your mobile phone if:

• You are likely to damage or lose your phone: If you are accident prone, or have broken or lost phones in the past, consider getting cover to protect you from having to pay for a replacement.

• You are on a monthly contract: Some pay monthly mobile phone contracts tie you in for 24 months or longer, and you will still have to make the payments if your phone is lost or damaged.

• You need a fast replacement service: If you rely on your phone and would need it replaced quickly, network providers' insurance might be the best option. However, it usually costs more with no discounts for older models.

• You could not afford the cost of replacing your phone: If you have an expensive smartphone it could cost hundreds of pounds to replace, so think about taking out mobile phone insurance.

If you decide to take out mobile phone insurance, you should check the conditions of your policy to make sure you get the cover you need. Check for exclusions, and look for policies with a low excess.

How does mobile phone insurance work?

Are you covered elsewhere?

Check to see if you already have cover in place before you buy separate mobile phone insurance.

Packaged bank accounts and home insurance policies typically include cover for mobile phones, plus your phone may still be under warranty.

Packaged bank account

Most current accounts where you pay a monthly fee include mobile phone insurance, and you may be able to cover two phones for no extra cost if you have a joint account.

You will need to register your phone with your bank to start your cover, and you will also need to update your details if you upgrade your handset.

You should check the terms of the insurance with your bank, as some policies only offer basic cover for damage, loss or theft. For example, you may not be able to claim for water damage or cracked screens.

Home insurance

You may already have cover for your mobile phone under your household contents insurance policy, or you could increase your cover to include it for an additional fee.

Personal possessions cover protects items like mobile phones, electronic devices and jewellery, even if they are outside of your home. You may even be covered abroad.

However, your cover may be limited and you will have to pay a much higher excess than you would with mobile phone insurance. Any claims you make could also increase the cost of your home insurance, so it might be best to take out separate cover for your phone.

Mobile phone warranty

If your phone has stopped working, check your purchase documents to see if it is still under the manufacturer's warranty. This covers repairs to your phone if the damage is not your fault.

Warranties last between 12 and 24 months, depending on your manufacturer, although some parts may only be covered for a short period of time. For example, your phone battery or accessories may only be covered for 6 months.

You can use your warranty if you need mechanical faults repaired, but you may want to get extra cover in place to cover the risk of loss, theft or accidental damage.

What are the benefits?

While you may have some cover for your mobile phone in place elsewhere, there are benefits to having a dedicated mobile phone insurance policy:

• Accidental damage cover: Most mobile phone policies pay out if you drop or break your phone, and they also cover things like water damage and cracked screens.

• Lower excess: You have to pay a set amount towards every insurance claim, but this is usually no more than £50 with mobile phone insurance. Here is more information about how to make a claim on your mobile phone insurance.

• Unauthorised use: Most policies offer up to £2,000 cover for unauthorised calls if your phone is lost or stolen. Some network providers also automatically cap your bill, for example at £100, if your phone is stolen.

• Cover abroad: With mobile phone insurance, you enjoy the same level of protection worldwide. If you have travel insurance, there may be restrictions and higher excesses, plus some policies offer no protection for mobiles.

• Fast replacement service: Most mobile phone insurers offer a replacement phone within a few days of your claim being accepted, and some even have a new phone to you within 24 hours.

You can find out more about what is included in mobile phone insurance in this guide to how mobile insurance works.

Are there any drawbacks?

While mobile phone insurance can protect you from the high cost of replacing your handset if it is lost or damaged, it does have a few drawbacks:

You may never use it

If you never claim for a damaged or lost phone, you could spend 12 months or more paying for insurance that you never use.

Your need for mobile phone insurance depends on how likely you think you are to claim.

If the chances are slim, you may be better off putting aside some money each month to cover the costs of minor damage.

No refund if you claim

If you make a claim on your policy, you will still have to pay the full cost of your premium:

• If you pay for your policy in full, you will not be given a refund if you claim

• If you pay monthly, you will have to keep paying your instalments until the policy ends

Some insurers also require your premium to be paid in full before they will pay your claim, so check the conditions of the policy before you take out cover.

Delays in reporting your claim

Many insurers state that you must let them know your phone has been damaged, lost or stolen within 24 hours, otherwise they can refuse to pay your claim.

Insurance companies may also refuse to pay your claim if you have failed to report a lost or stolen phone to the police.

How to claim on your mobile phone insurance

Limited loss and theft cover

Most insurance policies only cover theft of your mobile if it has been forcibly stolen, for example during a burglary. You would not be covered if your phone was taken from your back pocket without you knowing.

You may have to pay extra for loss cover because it is not always included as standard. Even then, your insurer may not pay out if you have been careless or left your phone behind in a taxi, for example.

You may not get a new phone

Some insurers will try to repair your phone rather than replace it, which means you could be without a phone for up to a week.

If your phone is replaced, it may not be with a brand new phone but with a refurbished phone or a different model of similar value.

How to find the right cover

If you decide to insure your mobile, you should compare deals to find the best cover by:

• Deciding what cover you need: Think about what you need to insure against and find a policy that offers this cover. You may only need basic damage cover, or you may want more comprehensive cover that offers better protection.

• Finding the cheapest deal: Compare as many products as possible to find the right policy at the best price. It is always best to pay a little extra to make sure you have the right cover in place, but you can still look for the best deal.

What if you change your mind?

All mobile phone insurance policies come with a 14 day cooling off period, which lets you cancel your policy and get the full cost of the policy refunded.

However, you may be charged for time spent on cover and some insurers charge an admin fee, so check the terms of the policy before you buy.