Mobile Phone Insurance

Many people have mobile phone insurance who don't need it. Others are paying well over the odds. Losing or damaging a mobile costs time and money. Insurance companies play on this fear to make some serious cash. This full guide to the cheapest mobile phone insurance takes you through whether you need it, and includes a full comparison of best buys.

• Do you need mobile cover?
• Self Insurance
• Use your home contents cover
• Best Buys: Cheapest mobile insurance
• Protect your mobile
• Protect from fraudulent use
• Back up for free
• Ask a question/discuss

'Hmmm. Well it's definitely somewhere between there and here'

Do you need mobile insurance?

Unlike most insurance types, mobile phone policies usually don’t depend on age, sex, work, income or any other standard demographics. More importantly, most also fail to take claims history into account, though a few do have tokenistic no-claims promotions such as a free battery after two years.

This means it's a one-price fits all solution, and as we're all tarred with the same brush:

Those people who never lose or damage their phones subsidise the costs for serial phone losers.

This simple fact dictates whether it's worth getting a policy or not.

You know you better than the insurers do

The most important question to ask yourself is am I a loser? What's the realistic risk that you'll damage or lose your phone? By being aware of this, you can play the system and win. If you've a ten year 'no problems' streak, or keep your handset rigidly clipped to your belt buckle, paying a whack for robust insurance is likely to be a waste.

Personally, while I'm good with money, I'm scatterbrained with keys and phones and have had more than ten phones lost, broken or nicked in the last eight years. As I know I'm a loser, insurance is a good bet for me, as it costs less than repeatedly paying for a new phone.

Picking the right solution...

This depends on the cost and type of deal you've got...

• Are you a Pay-As-You-Go user?

  With PAYG phones the downside risk is limited, as once your credit has been used no more fradulent calls can be made and you'll simply need to buy a new handset. Thus unless it's a super-flash loadsamoney job, insurance is probably overkill. Best options: Read the Self Insurance and using Home Insurance sections.

• Are you a mobile phone loser?

  If you've got a contract mobile phone, and are quite likely to lose or damage it, then insurance is usually worth it. As even if you didn't want to replace the phone you'd still need to pay the monthly fee until the contract ends if you lost it. Best options: Read the Cheapest mobile policies section and also see the using Home Insurance section.

• Is your mobile usually in safe hands?

  If you're a contract mobile phone user who is unlikely to lose or damage your mobile, then paying for comprehensive cover is probably overkill. After all, even if you do lose your phone once, the cost of replacing it's probably less than a few years' insurance. Even so, there are some ways to off-set the risk. Best options: Consider Self Insurance and take a look at Home Insurance cover.

Self Insurance; save up for a rainy day...

Self insuring simply means rather than paying for an insurance policy, you put the money aside each month into a high interest savings account. This way if you lose the phone you've got cash to pay towards a replacement, and if you don't, the cash and the interest are yours rather than the insurance company's.

The risks are that you may lose the phone early on before you've saved up enough cash, and that fraudulent calls made on your stolen phone before it's barred aren't covered (see the protect yourself against fraud section).

If you do decide to self insure, always establish the replacement costs to see how much you need to save up.

• PAYG replacement costs.

  If you've got a Pay-As-You-Go phone, it's simply a case of finding a cheap new deal (see Cheap Mobiles).

• Orange contract customers replacement costs.

  Orange typically charges £70 'emergency insurance' for standard phones and £170 for smartphones. This'll get you a new handset, but you must take out 6 months Orange Care insurance with it, at £6/month.

• Other contract customers' replacement costs.

  Other networks generally don't offer emergency insurance so it's necessary to buy a new phone at an unsubsidised price, and with the ever-growing costs of some high tech phones this could be hefty; more than £400. However if you're on another network a quick call to check your own deal is always worthwhile, though don't expect too much.

If replacing the phone is too expensive.

Don't just plump for a policy; there are other routes to keep the replacement cost down:

• Get a new contract.

  If you've not long left of your contract, it can be cheaper to simply get a new deal (see Cheapest Mobiles) and downgrade to the cheapest tariff for the remainder of your old contract. E.g. three months on an unused £20/month contract is cheaper than spending £400 to replace the phone. Providers are getting stricter on downgrading tariffs but most will look on a case-bycase basis so it's worth a try.

• Don't replace the exact model.

  If you don't have the mobile's SIM , then ask your network for the cost of replacing just that (it's usually free), not the phone. Then you can pick up either a Pay As You Go deal (£10 for these is no longer uncommon) or buy one off eBay. However do ensure it's either on the same network or it can be unlocked (see the Mobile Unlocking guide for full details).

• Get an insurance policy.

  If the cost of replacing a mobile, and especially fraudulent calls would be a too big a risk for your pocket, then it's back to considering insurance, whether utilising home contents policies or the cheapest independent providers.

Use your Home Contents Insurance cover

It's possible to add an 'all risks' option to existing home contents insurance, which usually covers valuables taken outside the home against loss, theft or accidental damage, for anything from around £25 up a year. This has the added benefit that it's not just your mobile phone that's covered.

If you're going to add this, then it's also worth investigating whether you can save on the whole policy at the same time; see the Cheap Home Insurance guide.

Check the details of the cover

It's important to check what the exact cover is before laying down your cash.

• Will they replace the phone? If so, how long will it take? It's likely to take longer than your network would.

• Will they give you cash? In which case, will it be the market rate for your specific phone, new for old, or the cost of network replacement?

• Will you need to pay an excess on the reclaim? The networks will usually make you pay an excess of £15 or £25; some independent insurers can charge a fair bit more.

• Will fraudulent calls be covered? This is unlikely but possible. If not, you may may want to self-insure against that eventuality, or at least see the protect yourself against fraud section to minimise the risk.

Best Buys: Cheapest Mobile Phone Insurance

There's nothing cheaper than free, so when renewing your mobile contract, haggle hard to get it included (see the Mobile haggling guide). If not:

Step 1: Benchmark your mobile network's cost.

Most of the mobile networks charge around £70/year for mobile insurance, regardless of handset value. For those with expensive handsets, this can be good value as standalone insurers usually take replacement cost into account.

Policies vary, especially in terms of excess levels and fraudulent calls cover, so use the network by network breakdown to get basic info, then check it out before comparing the other policies. Of course, if the network's insurance isn’t much more expensive, the convenience of having it all in one can make it a prime pick.

Step 2: Compare it to the cheapest standalone cover.

It’s also possible to get cover from FSA regulated online specialist mobile insurers, who offer strong policies with good fraudulent calls cover. With these, lose your phone and they’ll send you the handset, while your network replaces the SIM card (usually for free).

To find the cheapest we compared over 20 policies, yet as this is a new guide, feedback on customer service is still limited..

• Handsets under £200: Talkcover from £1.87/month

  For handsets worth under £200, pay for a year and TalkCover usually costs £22.40 (equiv. £1.87/mth) or £2.50 on a month by month basis. There’s no exact science to this though; always get a specific quote as cover cost depends on each phone, but for most lower end phones it’s the winner.

  All Talkcover's policies pay out on water damage and unnattended theft (excluding iPhones), and it also promises to get a replacement to you within 48 hours.

  Need to insure more than one handset? Talkcover also offers big discounts if you insure a few handsets at once. For example, it'll insure 3 phones worth up to £500 each for £7.49/month in total (i.e. £2.50 each), making it easily the best option if you've an expensive handset and can persuade your family to join you in getting covered.

  QUICK FACTS. Price: £1.87/month (pay annually) Water damage/unattended theft: Yes Replacement Time: 48 hrs Excess: £25-50 Fraudulent Calls: £100 Overseas Cover: 60 days

• Handsets over £200: CUSC from £4.17/month

  Specialist insurer CUSC insurance has been offering mobile insurance since 1989 and it has decent feedback. Its FoneGuard policy costs £50 a year (equiv. £4.17/month) or £4.99 on a month-by-month basis. This applies regardless of your handset's value, so it's worth comparing with TalkCover (see above) to see which wins.

  It offers the highest level of fraudulent call cover, up to £250, yet on the downside its unattended theft cover only extends to handsets stolen with the use of force- if you lose your handset yourself and no force is involved you won't be covered. The excess is £25, or £50 if you're insuring a 3G handset.

  QUICK FACTS. Price: £4.17/month (pay annually) Water damage/ theft: Yes Replacement Time: 3 days Excess: £25-50 Fraudulent Calls: £250 Overseas Cover: Yes

Please Feedback on Mobile Insurance if you've used these policies or want to suggest others

It’s worth noting, the big high st. mobile chains also offer insurance when you get your phone with them. Of those, Carphone Warehouse's Geek Squad policies and The Link's Link plan can be competitive, depending on your handset value, but the rest tend to be pretty poor.

Take Precautions: Protect your mobile & data

Losing your mobile phone can be a nightmare of lost data, contacts and fraudulent calls. Yet there are a number of easy ways to protect your mobile and data for free.

Protect against fraudulent phone use

The main benefit of taking out a dedicated mobile insurance policy is that it'll usually cover you (to varying degrees) for calls made from your phone whilst you've no control over it. For Pay As You Go users this isn't such an issue, but contract customers could wind up liable for £100s. Yet whichever system you use, there are some precautions which can limit your liability:

• Report your loss quickly.

  It's imperative you report your phone's disappearance to your network as soon as it's apparent; it can bar further use within minutes plus your insurance maybe invalidated if you don't report it within 48 hrs. Once you've done that you'll need a crime reference for your insurance. To do this pop into or call your local police station, though not via 999. You should be able to quickly find your local station's number on the web, or using a Free Directory Enquiries phone number.

• Set a credit limit.

  Some providers will allow you to set a maximum credit limit for calls each month. Go past the limit, and further outgoing calls will be blocked.

• Bar international calls.

  If you don't use your mobile to call abroad from the UK ask your network to bar international calls. This ought to stop charges getting too out of hand before the phone's reported.

Back up for free; practice safe text

Regardless of how expensive your phone is, it's likely that the info you've got stored on it's more valuable. It can be quite a headache to get your list of contacts back together on a new handset if you've had one nicked, so backing up your contacts and any media is a must. There are a few ways to do it:

• Connect to your PC:

  Most modern phones will be supplied with a cable and some software to connect them to your computer. This software is usually designed to sync calendars and address books, but you can use just use it to store numbers. If your handset didn't come with software, there are a few free-to-download programs that'll do the job. Sony-Ericsson users for example, can get MyPhoneExplorer.

  If you don't have a data cable, but you have access to bluetooth or infra-red (on both your phone and computer) you should be able to port your numbers over those too, though it'll probably take a little longer. Thus, for most people one of the other backup options will be easier.

• Via your network provider:

  Increasingly, mobile networks themselves offer to store your data for free. Vodafone customers can use its My Contacts service, and O2 customers can sign up to Bluebook. Orange also offers a backup service, called Memory Mate, but it charges you a one-off fee of £2.99 for the privilege (unless you are upgrading in store). 3 and T-mobile users should check the web-based options below.

• On the web:

  Zyb offers both a back-up utility and mobile-based social networking site for free. It'll also transfer your numbers onto any new phones you get, easing the transition between handsets, and hopefully putting paid to pesky 'I lost my phone' Facebook groups.

  Anywr also works more like a social networking site, but handily allows you to sync all your email contacts with your phone ones and vice versa. Both these sites are totally free.

• The old-school pen and paper route:

  For many people this'll be first choice; for all the fancy new technologies that promise to save you time, there's still a whole lot to be said for a pen and little address book. Just remember to update the book occasionally with new numbers, and not to 'put it somewhere safe', which vanishes from memory the next time you need it.