My mobile phone was stolen a few months ago and I had no insurance. Do I care? No.
Weeeell, OK, it was a little irritating, but it effectively cost me nothing. I reckon that if I'd insured my phones through my operator ever since I got my first one ten years ago, I would have spent around £750 by now.
Thing is, the mobile that was stolen was probably worth less than £200 brand new. I could buy a £200 phone now, if I wanted, and I'd still have saved £550.
I'm sure some people need to claim more often than me, but even taking this into account I think that this insurance is vastly over-priced when it's bought through your operator.
Having a quick look at some operators' websites, I can see that O2 might charge £90 a year to insure your phone, 3 might charge £72 and T-Mobile, £84. These were rough figures, because it could cost somewhat more if your phone is worth more than £200.
Now, I could have looked around for stand-alone mobile phone insurance. A quick search on Google reveals that, based on today's prices, it'd probably cost me about £35 a year. This is much more reasonable! It also makes us ask the question: if these stand-alone insurers can charge such a small amount, why can't the phone operators?
Still, £35 a year for ten years is £350, which is still a loss of about £150 to me. Furthermore, I have kept an old phone as a back up. As I'm a little bit quirky, and not what you'd call a fashionable person (not even on a good day), I don't feel I must have the latest phone to look good. I certainly don't need the latest functions on mobile phones. So I don't mind getting a duplicate SIM card and reverting to an old model for a few months. That old phone is my insurance policy.
Not only that, but, as I'm on a monthly contract, I'm entitled to a new phone when I renew anyway. What's more, I'm likely to get an upgrade several months early if I make the call, meaning I won't have to wait till renewal to get a new phone.
This devalues mobile phone insurance somewhat, because it effectively means pay monthly customers are only getting cover for nine or ten months, not twelve; if your phone goes missing in the last two or three months, you can probably get a replacement anyway, so your last few months of premiums are wasted.
Finally, I could always get household contents insurance. This covers mobiles for loss and theft, and for accidental damage. Problem is, the only things of value to me are my USB pen and a painting, but I back up the USB pen on someone else's computer, and the painting has much more sentimental value than real value. Everything else can burn as far as I'm concerned. Which means contents cover is overkill.
Household contents insurance isn't as comprehensive as mobile phone insurance, but how often have you heard of people being caught out by mobile phone insurance small print? Personally, I've heard quite a few anecdotes where claims have failed.
So my preference is for saving up for such emergencies -- and earning interest on those savings -- without paying a premium for cover I rarely use.
Even so, we all have individual requirements. Consider your own personal circumstances:
- Are you on contract or pay-as-you-go?
- Do you have a spare phone to fall back on?
- Are you clumsy or forgetful?
- Are there other risks to you?
- Regardless, do you want or need the peace of mind insurance brings?
Then decide whether home contents cover is sufficient for you, or whether you need more comprehensive mobile phone insurance. If you choose the latter, buy it cheaply with a stand-alone provider, such as insurance4mobiles or Mobile Phone Insurance 2u. A Google search will bring up plenty of other providers if you want to compare more prices.
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