/ 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?