Best gadget insurance

If it is electronic and portable, it is usually classed as a gadget so insurance should cover laptops, tablets, cameras etc. Insurance is designed to cover an individual item but some insurers also allow you to bundle several gadgets under one policy – usually getting a discount on each additional item.

What counts as a gadget

Here's a list of what insurers class as a gadget:

- Tablet
- Laptop
- Digital camera
- E-reader (such as a Kindle)
- Portable games console
- Camcorder
- MP3 music player (such as an iPod)
- Personal digital assistant (PDA)
- Portable DVD/Blu-ray player
- Sat-nav
- Fitness tracker
- Smartwatch
- Headphones

No insult intended, but deciding whether to get a policy can boil down to the following...

If you're careful and keep your gadget protected, the chances you'll lose or break it recede. Unlike most insurance, the cost of gadget cover doesn't usually increase with a history of loss or damage. So those who rarely have issues are cross-subsidising losers.

Based on our research, we think it'll be worth you following these general principles...

• Many with cheaper gadgets who rarely lose things won't need specialist insurance

  For most people with a gadget worth £150, gadget insurance is very expensive as a proportion of what you'd ever get as a payout. For example, on a £150 Kindle, our research shows a standard gadget insurance policy can cost about £50, yet the most you'd ever get from a claim is £100 because you have to pay the first £50 of that claim, called an excess.

  
  So two years' worth of insurance is equivalent to what you'd get from a claim anyway. If you lose it after two years and pay to replace it, you won't have shelled out any more than had you bought insurance. So consider self insurance instead. Also, standard home contents insurance will often cover gadgets, though beware excesses on home insurance as they are typically about £250-£500.

  
  That means you wouldn't actually be able to claim for the loss of a gadget(s) if it's worth less than the excess, unless it was stolen or damaged as part of a large theft or fire etc. See the home insurance section below for much more.

• If you're a 'loser' with expensive gadgets then insurance can be worth it

  If you've a £2,000 computer that you think you may lose or seriously damage, then paying £175 a year to insure it at least means you could get a large payout in relation to the cost of the insurance.

  
  That's using a genuine example from our research and is typical across a number of products and policies. What's more, unlike home or car insurance, if you make a gadget insurance claim, it is unlikely to push up costs in future years.
  

  Martin's a loser...

Martin Lewis

MSE founder & chair

I may be good at saving money, but I'm scatterbrained with keys and phones, too often leaving them as I rush from one place to the other. While I try my best, the truth is I've had more than 10 phones lost, broken or nicked in the last decade. As I know I'm a loser, I know insurance is a good bet for me, as it costs less than repeatedly paying for a new phone.

Most basic policies include accidental damage as standard, mid-range policies add theft, and top-end deals cover loss, as well as the other two.

But be warned that even when it says loss or theft is covered, an insurer may not pay out if it deems you've been negligent. For example, if you're on a train and leave your tablet out in the open while on the toilet, and it's gone when you come back – you probably won't get your money back.

Quick questions

If I claim, do I get a new gadget?

It's rare to get a brand new replacement if your gadget's gone or beyond repair. Most insurance companies aim to get you a like-for-like gadget in the same condition, roughly the same age and with equivalent specification – often a refurbished model.

Alternatively, insurers may give you a cash equivalent. If your device is repairable, insurers usually try to repair it.

Is unauthorised data use covered?

It's common for tablet thieves (especially if they swiftly discover it's on a contract) to quickly run up huge data bills with downloads – which exceed your contract allowance – before dumping the stolen gadget.

Many policies will now cover a set amount of unauthorised data use from your device as long as you quickly report its theft to police (although there are limits on how much insurers will pay).

You may be blissfully unaware your gadget is covered anyway, as most insurers cover laptops, tablets and other gizmos as standard under a contents policy (see our Home Insurance guide to get cheap cover). Though you need to check if your policy covers your gadget outside your home – you may have to pay extra to get this cover.

And don't rely on home insurance to cover cheaper gadgets because excesses (the portion of a claim you're expected to pay) can be more than the value of the item, meaning you can't always make a claim even if it's lost or stolen.

Here are the key points...

Not all home contents policies provide gadget cover outside your home

If you just rely on basic home contents insurance, you'll ONLY get cover for your possessions if stolen or damaged at home. Once you take them out of the home anywhere in the UK (and up to 60 days overseas), you'll need an add-on – called 'all risks or personal possessions' cover – if you want it protected for theft, loss or damage.

This would cover gadgets, bikes, jewellery and more outside your home. Depending on the gadget and any other valuables you might typically want to include, this can cost between £12 and £50 a year extra.

It can be a valuable add-on: for example, students at university (who are still registered on the electoral roll at their parents' home) are covered if their tablet or laptop is stolen while out and about. See 60 MoneySaving student tips for more.

The greater the value of 'personal possessions' you take out of the home and wish to insure, the more you pay. Before just lumping this onto your policy, check the price of getting a new policy altogether via our home insurance cost-cutting system, as you may find it's cheaper.

You can then get a pro-rate refund on your existing policy but factor in typical £50 cancellation fees. A few policies include this extra cover as standard, so check.

Home insurers may not automatically cover expensive gadgets

Insurers have limits on the value of individual items that you don't need to specify – it's often from £1,000-£2,000. If your gadget is really expensive, such as a high-end Apple MacBook with all the bells and whistles, and is above the individual item limit, you'll need to specify it by calling your insurer.

It should then provide cover for it, most likely for a higher premium. But before just paying extra, check the price of getting a new policy altogether via our home insurance cost-cutting system as you may find it's cheaper.

High excesses mean you can't claim for cheaper gadgets + more home insurance traps

• Making claims – especially if you're unfortunate enough to make more than one in a 12-month period – could have a huge impact at renewal. This is because...

• Any claim made will see an insurer remove any no-claims discount from your price at renewal. In effect, it could mean higher prices for up to five years following the claim.

• Make a number of claims, particularly over a short period, and insurers will load your premiums to counter the cost of claims you're making.

• If you end up making a lot of claims for gadgets, the number of insurers willing to offer you cover will shrink – leaving you facing likely higher premiums.

• A higher excess on a home policy – typically £250 but sometimes as high as £500 – can make relying on home insurance worthless if you've a cheap gadget worth less than this you need to claim for.

• When you get to renewal on your home insurance, use our home insurance cost-cutting system to slash the price you pay whether you've claimed on it or not.

This simply means rather than paying for insurance, you put money aside each month in a top savings account. This way if you lose your gadget, you've got cash to pay towards a replacement.

If you don't lose your gadget, the cash plus the interest is yours rather than an insurer's. It's great if you rarely lose or damage gadgets, though it isn't without its risks. If you lose a pricey laptop or tablet early on, you may not have built up enough of a fund to replace it.

Gadget insurance may be sold as a remedy to solve all the knocks and scrapes that can accompany carrying a gadget around. But these policies can be packed with exclusions. Here's what to watch out for...

• Use it for work? You may not be covered. If you use your gadget for business (or any professional service which leads to you getting paid), it is unlikely to be automatically covered. It's worth informing the insurer if you want it covered but be aware it may refuse cover if it deems your occupation to be too risky, or may charge you extra.
  
  But before just paying extra, check the price of getting a new policy altogether via our

  home insurance cost-cutting system, as you may find it's cheaper.

• The older the gadget, the less likely you'll be able to insure it. Most insurance providers will put a restriction on the age of the gadget at the time of buying a policy. This can vary from a tablet not being more than six months old when you insure it, to a camera not being more than three years old.

• You may not be covered for second-hand items. If you bought the gadget from a friend, second-hand from an online auction site or from gadget recyclers, it is very unlikely to be covered. As a rule, the gadget would need to have been purchased 'as new' from a retailer and accompanied with a receipt for a claim to be considered.

No, but it might be worth contacting it to check. If you have a low- or mid-price laptop, say, and its value is below the home policy's single item limit, you should be covered, though it's still worth checking. Plus, unless you're an insurance expert, you may not know your firm's precise policy, so it's useful to confirm it anyway.

It's always the price to buy a laptop or tablet, say, of the same specification, new – rather than what you'd get for it if you sold it second-hand.

It's for far more than just your gadget, but only for other things you'd leave your home with, such as jewellery, handbags, clothes and bikes.