Mobile phone insurance

Mobile phone insurance policies will compensate you if your handset is lost, stolen or broken. However, they won’t necessarily pay out the sticker price of the phone and hand you a brand new replacement. Instead they may pay for the device’s repair or provide you with a refurbished handset.

Some policies offer additional coverage or can be topped up with extras:

• accidental damage, including cracked screens: Drop your phone and smash the screen again? Some insurance policies pay to repair or replace a cracked screen or for other functional repairs. Water damage is usually excluded, however.
• unauthorised calls, payments and other fraud: As phones have become more integrated into our lives, the potential financial damage of having them stolen has increased. Thieves who snatch your phone and crack its security measures can then use it to rack up expensive international phone calls and make payments. Some insurance policies allow you to claim for the costs of fraudulent activity performed after your handset was stolen—up to a certain amount and within a set period of time after you realised the phone had been taken.
• digital downloads: Our phones can store potentially hundreds of pounds of movies, music, games and apps. If your phone is stolen or lost, some policies will compensate you for these lost digital downloads, provided you can prove you bought them legally.
• phone accessories: Some policies cover the accessories you get with the phone when purchasing it new, including headphones and styluses. Some policies also cover the replacement of the device’s battery, if it's permanently run out of juice.
• overseas cover: Some policies will provide the same protection for your phone if you take it outside of the UK, up to a certain amount of time (for example, for a holiday but not a lengthy relocation).

Like all insurance policies, mobile phone policies will have exclusions—a list of circumstances under which they won’t pay out. These will vary from provider to provider and policy to policy, but common exclusions include:

• theft of a phone left unattended: Leave your phone in plain sight in your parked car or on a table in a cafe and you likely won’t be able to claim on your insurance policy when it’s stolen.
• theft without signs of forced entry: If your phone is stolen from your home, office or other building and there’s no sign of forced entry, you also won’t be able to claim, as is typical with home insurance policies.
• carelessness: Policies typically also exclude damage caused by carelessness—such as if you leave your phone on top of your car and drive off.
• intentional damage: Caused by you and not by a third party. This can also include botched upgrades or modifications you make to the phone, contrary to the manufacturer’s instructions.
• water damage: Phones have sensors which indicate whether they’ve been submerged in water. Your insurance company may check these and refuse to pay out for damage if they’ve been triggered.
• phones without SIM cards or original SIM: If you don’t have the original SIM card in your handset, because you’ve switched provider, the device might not be covered.

Mobile phone insurance policies start from around £5 a month or £60 a year. But prices range widely and can exceed £15 a month or £180 a year—which might not be economical, unless your smartphone is very valuable. Prices will depend on the brand of phone, its model, value, the level of cover and how much you shop around. Comparing quotes will allow you to find a policy which maximises coverage, while minimising your costs.

You can buy standalone mobile phone insurance policies, either from your mobile provider or an insurer. These will be the most complete policies, tailored to cover mobile devices, often with coverage for accidental damage and fraudulent activity on the phone.

But you can also cover your phone other ways. In fact, you might already have mobile phone coverage, through your home insurance policy or packaged bank account.

• home contents insurance: Your home contents insurance policy will typically cover your phone if it’s stolen from your house and, with a personal possessions cover add-on, may also cover the device outside of the home too. You may also be able to top up your policy with accidental damage cover, which might extend to your phone. This can be a relatively cheap way to insure your device. Be aware, however, that the excess on your home insurance policy might exceed the cost of your phone and claiming on the policy can ruin your no-claims bonus and drive up your overall home insurance premiums.
• packaged bank account: Packaged bank accounts often offer mobile phone insurance for a monthly fee. Check the level of cover, however. Is accidental damage covered? How quickly will a stolen or lost handset be replaced? If the policy doesn't suit your needs, it might make sense to seek out a different standalone policy.