Review your mobile phone insurance
There are 228 mobile phones reported stolen every hour in the UK, according to the Home Office. Added to that are the countless numbers of unreported thefts and phones that are dropped, lost or damaged.
But is mobile phone insurance the answer? It’s worth reviewing your policy to see if you really do need insurance or if you’d be better off ditching it.
1. You may already be paying for insurance without realising it. Insurance is a common benefit offered alongside current accounts. However, it might not be the most comprehensive policy. Alternatively, your mobile phone might be included under your home contents insurance.
2. Some network providers will try to push insurance when you buy a handset, but you’re under no legal obligation to purchase it. If you need insurance, it’s not compulsory to buy it from the same provider that sold you the phone. And remember, you can always cancel an insurance policy within the 14-day cooling-off period that runs from its purchase date.
3. Given that insurance can typically cost between £5 and £7 a month and it’s possible to buy handsets for just £20, you could simply buy a new handset if you lose your phone. If you own a pricier handset, however, be wary of having no insurance at all. Mobile phone contracts last 18, or even 24 months, and if your expensive BlackBerry is lost or stolen towards the start of this term, you’ll have to cough up for a new handset, which will cost considerably more than £20.
4. You can compare mobile phone insurance costs at comparethemarket.com and uswitch.com. The main areas of cover to look out for are theft, loss, accidental damage and water damage. By law, you should receive a policy summary document that outlines the key points, as well as a ‘statement of demands and needs’ to show why you were recommended the insurance in the first place.
But beware high excesses – some policies come with an excess of £50 attached to them.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
The period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Financial products including banking, credit, insurance, personal pensions and investments are subject to a 14-day cooling-off period (this is 30 days in the case of life insurance and personal pensions). The insurer or broker must refund any money paid by you within 30 days, although it has the right to deduct a reasonable admin charge, and a sum proportionate to the number of days’ cover you had. If you have any related credit agreements, these will also be cancelled.
Does exactly what it says on the tin: covers the contents of your home for theft and damage and also may insure certain possessions (jewellery, cycles) outside of the home. Things to watch for include the excess and also the maximum payout on individual items. Another grey area is kitchen fittings, as some contents policies say these are not contents but part of the fabric of the property and covered by buildings insurance and some buildings policies don’t cover them because they regard them as contents.