It's often one of our most expensive possessions, yet we flaunt it about us all the time. So it’s no surprise mobile phones are one of the fastest-growing areas of insurance, with 10 million policies taken out in the UK this year.
It’s not, however, particularly popular. The Financial Conduct Authority this summer found evidence of widespread poor practice in mobile insurance policies, even reporting that making a successful insurance claim for a lost mobile phone can be virtually impossible.
The Financial Ombudsman Service, meanwhile, reports that of the 600 new complaints about mobile phone insurance it received in the last financial year, it found in favour of consumers 71% of the time, “a considerably higher uphold rate than most other financial products”.
Yet cover may still be worthwhile, especially for smartphones such as the iPhone5, which cost more than £500 to replace. What cover to pick, though? An investigation by consumer group Which? — looking at the cost of insuring an iPhone 5 with 20 different insurers — found it ranged from £20 a year to £170.
There are four main providers: home insurers, network providers, banks via packaged accounts, and specialists such as ProtectYourBubble. About two-thirds of people with mobile insurance obtain it by adding cover for personal possessions outside the home to their home insurance, according to Which? The average cost is £2.13 a month extra, but most home insurers do not pay out for unauthorised calls when your phone is used by a thief to run up a huge bill.
Buying cover via a bank’s packaged account is the next most popular route to phone insurance. Which? found an average cost of £10.49, including bill protection if a phone is stolen. But these pricier policies are probably only worthwhile if you’re using the other products such as breakdown cover too.
Insurance sold directly by mobile networks was the most expensive, Which? found, costing on average £12.30 a month. The consumer group also pointed out that the policies weren’t necessarily more comprehensive, with most failing to cover un-authorised calls.
Specialist insurers charge an average £7.99, which may not include payout for loss, Which? warned. Always check inclusions, and whether the sum insured covers the total value of your phone.
Other things to look out for include the excess and any limit on the number of annual claims. The Ombudsman reports that the main complaints received on mobile cover are mis- selling, where policies impose too-heavy restrictions, or claiming a phone is un-attended when it is by the user’s side on a table. Other complaints have come from people who wrongly assumed their policy would update when their mobile phone was upgraded.
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Lead ombudsman Caroline Mitchell said: “People are thinking more about the excitement of their new gadget and not necessarily the in-and-outs of the add-on insurance. It is important to check what you are — and more importantly are not — covered for. If you feel unfairly treated speak to your insurer. If you remain unhappy call us.”
