Mobile phone insurance: is it worth it?

If you’ve ever broken or lost your phone, you’ll know it can be a nightmare. Mobile phone insurance might help at the time – but is it really worth the money?

dropped iPhone cracked screen


Do I need mobile phone insurance?

Mobile phone insurance policies can cost between £2 to £15 a month – and that’s if you never need to use it. If you’ve got an expensive smartphone, taking out insurance cover might be good for your peace of mind – especially as some phones are now costing upwards of £1,000.

But if you have a relatively cheap phone – ie less than £100 – taking out an insurance policy might not be worthwhile. It could be cheaper to simply buy a new one if yours is lost, stolen, or damaged. Work out the price of replacing the phone yourself vs the total cost of insurance cover. And go with the cheapest option.

So you’ve got an expensive smartphone, but still not sure whether to take out insurance? Ask yourself how likely you are to need it.

If you’ve never lost or damaged a phone before, the chances you will in future may be slim. Self-insuring might be a better option – more on this later. But if you’re no stranger to a cracked screen or a lost phone, insurance might be a safe bet. It’s likely to be cheaper than replacing a smartphone (or two!).


Am I already covered?

Before you take out cover, check if you already have it. Home insurance policies can often include contents insurance or personal possessions cover – and these might cover your mobile phone. However, it’s important to check the level of cover it provides. Contents and personal possessions insurance can have restrictive terms – and higher excess. Plus, any claims you make could increase your total premium.

Some bank accounts offer package deals with benefits, including mobile phone insurance. And more – like travel insurance and breakdown cover. These accounts usually have a small monthly fee. But if you’d use all the benefits, they could help you save a lot.

If your phone is covered by a manufacturer warranty, you might not need additional insurance cover. However, warranties usually only cover mechanical problems. Make sure you check T&Cs carefully if you don’t take out a separate insurance policy.


What does mobile phone cover include?

Most standard mobile phone insurance policies cover:

  • Loss or theft
  • Accidental damage
  • Liquid damage
  • Cracked screens or broken buttons

phone with cracked screen and water damage

More extensive cover is available, but it’s usually more expensive. But even the most comprehensive policies can have a long list of specific excluded situations – which the insurer won’t pay out for eg:

  • If your phone is second-hand
  • If you have a new SIM card in the original phone
  • If you don’t claim within a specific time frame – sometimes as soon as 12 hours
  • If your phone is stolen without the use of force
  • If your phone is stolen from an unlocked compartment in a locked car or house, or where there’s no evidence of forced entry

The list of exclusions can seem endless. Make sure you check the terms and conditions of the policy carefully – before you sign for it.


Self-insuring your mobile phone

If you don’t want to take out cover, self-insuring your phone via a savings account is a good option. Instead, you would put a small sum of money into a savings account each month. So you’ve covered yourself should you ever need to repair or replace your phone. Plus if you never need to use it, the money stays in your bank account – not the insurer’s.

However if you’ve only had the phone for a couple of months and something goes wrong, you may not have saved enough to cover the costs. Self-insuring might not be an option if you’re prone to losing or breaking your phone, either. You’d have to save up enough to repair or replace every time.


How to get the best mobile phone insurance deal

For some, mobile phone insurance can be the safest option. Even if it’s just for your own peace of mind – you’re covered if anything goes wrong. Here are a few tips to make sure you get the best deal for what you need:

  • Shop around and compare the best deals. Avoid cover offered by your network – it’s usually pretty expensive.
  • Check your home contents insurance policy.
  • Consider whether a bank account that includes phone insurance would be a good deal for you.
  • If you’re going to insure, arrange cover as soon as possible. Some insurers won’t cover phones older than six months.
  • Ask whether your phone would be replaced or repaired. Some insurers will only repair, leaving you without a phone for a week or more. Others will replace, or provide an alternative – it could be a similar value model or a refurbished handset.


Keep your phone protected

Whether you take out an insurance policy or not, you should do your best to keep your phone safe and free from damage. Especially if the phone cost you hundreds – or thousands.

  • Use a protective case, sleeve, or screen cover.
  • Store your data (photos, music, films etc) online. Apps like iCloud, Google Drive, and Dropbox store your data online, rather than on the phone itself. So if your phone is stolen or lost, you can still access your data. This also saves storage space on the phone, too.
  • Install tracking apps like Find My iPhone, Prey, or Android Lost. They can help you locate a misplaced phone via GPS. Some also let you control the phone remotely – so you can lock or erase the phone if stolen.
Find iPhone app on screen

Only insure your phone if you need to. Not everybody does. And if you can afford to live without it, the savings could add up. But if you’re likely to lose or break an expensive phone, having insurance could save you a lot of money.

Want to save even more? Head over to our Budget Buddy to see if you could cut down other expenses.

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