/ Money

Mobile phone insurance – pointless or practical?

Friends in cafe with mobile phone on table

There are plenty of questionable insurance products out there. Some, like mobile phone insurance, contain so many loopholes that it’s almost impossible to make a successful claim, as my friend discovered.

Last week, a friend had her mobile phone stolen. And her tale of woe reminded me why I wouldn’t touch mobile phone insurance with a bargepole.

My friend left her house, phone in hand, and went to get into her car. To get the car keys out of her bag, she put her phone on her car roof for around five seconds.

At exactly that moment, a ‘yoof’ shot past on a bike, grabbed the phone and made off with it. Never mind ‘gone in 60 seconds’ – that rather expensive smartphone was gone in six.

Straight away, she tried to claim on her (also rather expensive) mobile phone insurance policy. However, the claim was promptly turned down, on the basis that the phone hadn’t been ‘in her possession’ at the time it was nicked.

The fact that it was in plain sight and two feet from her nose made absolutely no difference.

Stick to a decent home insurance policy

I feel sorry for my friend, but I’m not surprised. In recent years, many mobile phone insurance policies have got a bad press for being over-priced and riddled with infuriating exclusions.

And the thing is, why would anyone buy mobile phone insurance when you can get the same cover under your home insurance policy?

If your contents insurance includes personal possessions away from home cover, which some include in standard policies and some charge a small extra premium for, all your belongings are covered when they’re outside the house. That means your phone is covered if it’s stolen. And it also means that your laptop is covered in a café, your handbag (and its contents) is covered if you’re mugged, and your coat is covered if you lose it on a night out.

As with your main home insurance policy, individual value limits do still apply. But these tend to be fairly high, covering most laptops, let alone mobile phones.

And in my experience, personal possessions cover always works out to be far better value – because it covers multiple items outside your home, rather than just one.

Am I missing a trick? Is there some extra benefit to mobile phone insurance that I haven’t spotted? Or have other people had difficulty trying to claim on a phone insurance policy?

Would you take out mobile phone insurance?

No - I don't think I need it (54%, 228 Votes)

No - my contents insurance covers it (30%, 127 Votes)

Yes - I've already got it (13%, 54 Votes)

Yes - I want to get it (2%, 7 Votes)

I've got it, but I want to cancel it (1%, 6 Votes)

Total Voters: 422

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Anne says:
9 November 2011

I don’t have phone insurance – it’s always going to be cheaper to just buy a new phone. I broke my phone and my phone company gave me a new one in return for adding another 12 months to my contract (which had 6 months left on it).

Shame you couldn’t find a better example of them not paying out. I think it’s quite reasonable in this case – if you put your phone down on your car (instead of in your pocket or bag) that’s just not sensible. I’m afraid your friend shouldn’t have been so negligent.

Lastly, re this:
“And the thing is, why would anyone buy mobile phone insurance when you can get the same cover under your home insurance policy?
If your contents insurance includes personal possessions cover, all your belongings are covered when they’re outside the house. That means your phone is covered if it’s stolen.”

No it doesn’t. A lot of contents insurance policies specifically exclude mobile phones.

Hi Anne, thanks for your comment. You’re right to flag up that passage – we’ve now amended it to reflect the differences in policies.

A mobile phone placed temporarily on YOUR car roof while you wrestle with the car keys, within 2 feet of YOU, is stolen by someone riding a bike … is considered by some insurance clerk not to be in her possession … which part of her possession was it not in? It was on HER car and I would consider that to be in HER POSSESSION. Sorry for the capitalisation but I would definitely fight that particular insurance company tooth and nail. I note you do not name the company and wonder why in the interest of giving it some really bad publicity or is the case still pending? I hope it is! Of course there is always the other side of the coin where folks abuse the policy for the sake of getting a new phone …

Mikhail says:
10 November 2011

I disagree. I think that the person was very careless. Even if the phone was left on a seat of a locked car and then stolen, all insurance companies would reject the claim and they would be right, cars are easy to break in to. Would you leave your front door open (unlocked) at night and then claim on the stolen possessions in the morning, although, the ‘accident’ has happened in your presence? I think with this kind of expectation there would be no insurance business at all.

I know it does not sound supportive, but from the legal point of view there is no difference from leaving a mobile phone unattended in a public place; even if the top of your car sounds more secure than a bar table in a night club it is the same. The question you should ask is would you place your £100s phone on a bar table or on a bus seat. I would not.

I also disagree with the author’s idea to stick to a decent home insurance policy! The worst idea ever, one claim in that field will increase you home insurance premiums at least for 6 years ahead with all providers, in addition, most house content insurance has access fees. Sticking to mobile phone insurance will not increase your premiums; in most cases this will have no access fee, and will not affect any other policies including those with the other providers. However, I do not think that mobile phone insurance is good value for money; I found it quite limited, instead I have (and this is my recommendation) gadgets insurance, which cost around £10-15, but covers all my mobile phones, laptops and cameras; no access fee; no premium increase and does not affect other insurances.

I have never had any of my claims being rejected; it helps if you read T&C before submitting a claim.

I agree that the person was very careless – never mind if it was her car, it wasn’t in a private drive at the time. She may as well have put it down on the pavement.

However, Mikhail is wrong about home insurance! We have unfortunately had to claim twice on ours in the last few years – each time, the premiums went up a little the next year, but quickly went down again. Not sure what you mean by access fees, do you mean an excess? That’s perfectly reasonable for insurance.

Interesting about gadgets insurance, though, might look into that. Who do you get yours with?

Brian says:
1 January 2012

I just got an iphone from T-mobile and they bundled in insurance (at £8.99 per month). Was having a look through the small print and it does say under “what is not covered”, Damage, loss or theft where you haven’t taken reasonable precautions to prevent this or where you have been reckless about or indifferent to the risk of damage, loss or theft taking place. Some examples include wilfully or recklessly leaving your device unattended in a public place or leaving it on the bonnet, boot or roof of a vehicle.”

But, I don’t like the way they seem to be using intimidated to get one to commit to a minimum term because under “Insurer Details” it says the policy has a minimum commitment of 3 months and if I stop paying my premiums within 3 months, my details may be registered on a central database which may affect my credit status. It’s a wonder they don’t also say we may also send the boys around to have a “quiet” word with you. I’ve a good mind to write to them to say that I may report them to the Office of Fair Trading for trying to use undue “persuasion”. The salesman did say that I was being given 14 days free cover and the contract does say I have a 14 day cooling off period during which time I can cancel the policy but it doesn’t say how I should cancel the policy.

I Googled, “Gadgets Insurance” and I noticed there were excesses with companies there, which, with one company, increases with the number of claims. I think the best bet might be to include it in my building and contents insurance which I will look into.

Alan says:
16 January 2012

There is a slight problem that you may want to consider and that is if you claim for a mobile on home contents firstly you will have to pay the excess which would be higher than a mobile insurance policy and there would be an in crease risk attached to your next years home insurance because of the claim.
There for you need to do the Maths to see which it the cheaper option.
If you are going to take out insurance, shop around there are better and cheaper the the mobile companies offer. Good Luck.

Averil says:
22 January 2012

My daughter’s phone was taken from her handbag. Hiscox insurance insurance is refusing to pay despite being a Which recomended provider and having ‘personal possessions’ cover as standard (it’s not cheap!) on the grounds that she is a student and that, for students, possessions are only covered while in their hall of residence or in transit to home. They re not covered while the student is anywhere else (pretty pointless for mobile phones). Their website talks in detail of how we don’t need extra student insurance as theirs is sufficient, AND I checked this with them and they confirmed it (but conveniently failed to point out the exclusion). It’s also worth noting that an excess on the contents insurance (even if personal posessions are included) is also applicable to a claim for a phone theft. I didn’t realise this. Hiscox automatically puts a £500 excess on all policies so even iphones aren’t covered. I’m not sure how any house insurance is going to cover a mobile phone if excesses apply to those claims. If house contents insurance can’t/won’t cover replacement costs because of the excess and mobile phone insurance is a rip off – where does that leave us?

My daughter had her mobile phone stolen with her handbag at a nightclub a few weeks ago and we did all the correct things as stated in the policy but we have been turned down for the claim by JS insurance, for mobile phones, as the phone was not stolen in violent circumstances. I find this a disgraceful cop out for the insurance company and the cover is not worth the paper it was written on and as you can probably tell I feel very angry at being cheated and robbed yet again.
I then asked for a refund on the insurance cover as I paid for a years cover and it has been only 3 months since I took the worthless policy out and they jokingly said I wasn’t eligible for a refund as I had made a claim. I don’t know how these people sleep at night cheating people so blatantly!!

Brian says:
30 March 2012

Hi GG,

It seems like the insurance company is just rubbing salt into the wound. To get redress you might have to take this to the insurance ombudsman. But firstly are you a member of Which Legal? If not I would recommend you join; I’m a member and I’ve found the service excellent. If you do join then this is something you can take up with them.

Caroline McGrath says:
8 April 2012

Some of these comments are so silly. Putting a mobile phone on top of the car while you get the keys out . Any one could do that . Its part of life when you are in a hurry. The fact is the phone was stolen and the person should have been able to claim. These insurance company’s just want your money and are not bothered about the individual that have paid their money in good faith. And that’s very wrong. It seems that these days everything that’s wrong is right and everything that’s right is wrong.

justice says:
7 May 2012

Duaghters phone was stolen last november her phone i pay for so went to o2 and bought a new blackberry the salesman talked us into buying insurance if it gets stolen or lost it would be covered in his words so last saturday coming home she lost her phone or it was taken from her we phoned o2 that night and blocked the phone the next day we went to the o2 shop to pick up the replacement sim card and explained to the salesman what happened he told us to say it was lost because in his words it shouldnt be a problem so we went home and made a claim they turned us down due to neglect because my daughter didnt remember when after she phoned a taxi to take her home did she put it in her jacket pocket or her handbag as the o2 gentleman ? said, when he goes out he always has his phone in his inside pocket bit sexist if you ask me i dont know how to approach an appeal any suggestings

Brian says:
8 May 2012

Hi Justice,

You could write a complaint to the insurance company and if your written complaint gets rejected you could then go to the insurance ombudsman. Or if you are a member of Which Legal give them a ring for advice. If you are not a member then I would recommend you join – I’m a member and I find the service excellent. Not only would you get good advice regarding the phone issue but also about any future legal related issue.


marc says:
7 August 2012

Maybe add some full stops to your sentence?

GG says:
8 May 2012

I have complained to the underwriters of JS Insurance who have also rejected my claim so have now written to the Insurance Ombudsman who say they can help once I have gone down all avenues.
Insurance companies have these ridiculous loop holes to prevent having to pay up even though we are all victims of crime. Their policies are not worth the paper they are printed on.

Brian says:
9 May 2012

With so many commenting about their claims being rejected I was wondeing if there is any way to find out how many people (and what percentage) do have their claims accepted. If there are so many clauses in the small print that makes it almost impossible to make a successful claim then maybe mobile phone insurance is about as useless as payment protection insurance (as you may know the banks are having to refund billions on PPI). Perhaps the Office of Fair Trading should investigate.

Q. When is an insurance policy actually an insurance policy? A. When it covers specific risks.
Q. What if it does not cover the risks I want it to cover? A. Insert the risks you want it to cover and get a re-quote from the company. The premium will be higher for each risk you add.

If companies advertise for sale “Mobile phone insurance policies”, they really should cover all normal eventualities in a standard policy, including as standard most of the possibilities that the “man on the Clapham Omnibus” would expect to encounter. That is my idea of what a policy should cover. They should not exclude normal risks in “small print” but the buyer must read the small print before buying. Insurance companies are there to produce profits for their owners: producing a service for customers is a secondary consideration!

GG says:
17 May 2012

Since my daughters phone has been stolen and I have talked to people about the claim, the only thing I think we did wrong was to tell the truth about the incident. The usual response from people is (firstly a huge suck in of breath) ‘you should have said………………’ followed by various scenarios that would have guaranteed us getting our claim settled. Unfortunately being an honest citizen these thoughts did not occur to me and I would have been very scared lying to the police ( eer breaking the law!!). Who says crime doesn’t pay? it certainly does with insurance claims!

David Solomon says:
24 May 2012

I have mobile phone insurance from Orange costing me £6 per month. The principal reason is that, as a business tool, I cannot do without it and this insurance covers me for a replacement within 24 hours any day of the week. I pay becasue of the conveneince and you seem to have missed this point in your resume.

Yes David, I can understand why you would need one but what is under discussion here, unless I am missing the point completely, is whether or not one’s mobile phone insurance policy will pay out when claimed against. Have you had occasion to actually claim, and if so, were you completely satisfied, no questions asked or obstacles put in your way?

Brian says:
24 May 2012

James has made a good point. Insurance salesman will always try to make out that their policy is all singing and all dancing but what they don’t tell you about is all the exclusion clauses. It would be good, if possible, to get some info regarding the number of claims received for mobile phone insurance and the nature of the claims and the number of successful claims. Any insurance policy is only as good as it’s ability to pay out when you put in what you perceive to be a valid claim. In other words are you sure you’re covered for what you think you’re covered for.

I just bought a new iPhone this week and have been thinking very carefully about insurance. After reading quite a few websites I’ve come to the opinion that mobile phone insurance as such is not much good.

Adding it to house insurance is not practical for me, I think because I live in rented accommodation and the insurance on the property is in the landlords name, even though most of it is mine.

Some banks seem to offer mobile insurance, from what I’ve read so far it seems pretty decent. I’ll have to find out if my bank offers this.

The way I think I’ll go, however, in adopting the ‘piggy jar’ approach. As a member of a local credit union I pay a set sum in each month. I’ll just tap that by a £5 a month and insure myself: if anything happens within the first two years I’ll loose out considerably but after two years I’m into the home straight, after 5 I should have enough left by to buy a new phone, if I need one.


I think that’s a good way to go, Kevin. Insuring yourself through a savings scheme is a sensible approach for things that, due to their risk factor, attract high premiums or large excesses, and it will encourage you to look after the phone. Compounding the interest will also give you a little bonus over time.

Although your landlord has to insure the property, that will not include your possessions. If something happened to the building that brought the ceiling down your contents would not be covered. Well, they would, of course . . . but not by the insurance. Burglary or theft are also risks worth thinking about.

Mark says:
10 January 2017

Can anyone recommend a good phone insurance policy and has Which done a survey on best buy policy’s
If not why as everyone seems to own one nowadays



Mark – I have searched the Which? website and not found the information you are looking for. The companies offering insurance are in business to make a profit and there are plenty of exclusions, which could mean that insurance is not very good value for money. It is important to understand the terms and conditions or you may find yourself not covered for what you assume is covered. There is an example in the introduction. If you think that insurance is worthwhile it would be worth checking if it would be worth adding to your home contents insurance.

Mark, if you have house contents insurance have you looked at what that offers, or could offer, to cover your mobile phone? Might well be cheaper than a standalone policy for the sort of cover you might need..

Would which not like to comment on why they do not yet seem to offer advice on this issue, to include also tablets etc (ie gadgets insurance) . This would also need to consider insurance via bank
accounts. I think they need to look up on this one.

i agree. i think which should do a gadget insurance / mobile phone insurance pros and cons.
24 hour replacement?
most comprehensive cover?
claims easy to make?
extra gadgets – lower cost?
excess 25/50/100?
unlimited claims?
cover mobiles bought from an auction site?
i think it would be very popular. atm i have separate insurance – mobile phone. mac book. so this all would be very useful