Do I need mobile phone insurance?

As smartphones are expensive to fix and replace, is getting covered with mobile phone insurance the smart move?

We all know smartphones can be expensive. And having mobile phone insurance means you won’t be left out of pocket if your phone gets damaged or stolen.

But as the cost of living crisis continues to bite, with many households making cutbacks, is mobile phone insurance an expense you might consider ditching?

If you have a handset you love, should you cover it? And might you also be in the market for a SIM only deal?

What happens if I'm on a contract?

The latest smartphones can cost more than £1,000, which is why many of us pay in monthly instalments. 

But if you break or lose your phone, you’re not off the hook for the monthly repayments. And your network is unlikely to send you a replacement handset unless it’s faulty, which should be stipulated in the terms of your contract.

So you have to keep paying for it, as well as stumping up for repairs or for a replacement. 

Mobile phone insurance protects against that kind of situation, paying out for a replacement under certain circumstances.

What does mobile insurance cover?

Exactly what mobile phone insurance will cover you for will depend on the policy and the level of cover you choose. 

A good policy should cover you for the following:

  • Accidental damage: covers the cost of repairs if you accidentally damage your phone.
  • Liquid damage: pays for repairs or a replacement if your phone is damaged by water or other liquids.
  • Screen damage: covers repair costs if you crack your screen, for instance.
  • Mechanical breakdown: if your phone stops working through no fault of your own, your phone should be repaired or replaced. Cover can include battery malfunction.
  • Accessories: protects your phone’s accessories, such as your case and headphones, if they’re damaged.
  • Worldwide cover: cover will usually be extended to include use of your phone while you’re abroad. The number of days per trip will depend on the policy.
  • Unauthorised calls: covers the cost of calls and data usage from your phone if it’s been lost or stolen (limits usually apply).
  • Theft: covers the cost of a replacement phone if yours is stolen. Note that you might not get a payout if your phone is stolen after leaving it unattended. 
  • Loss: covers the cost of a replacement phone if you lose yours.
  • E-wallet cover: if your phone is stolen, you’ll be refunded for the cost of unauthorised transactions made using your e-wallet facility (limits usually apply).

Do you already have mobile insurance?

Before committing to buy a policy, make sure you don’t already have mobile cover elsewhere. For example, if you have a packaged bank account, check to see if mobile phone insurance is bundled in.

Similarly, your phone may be covered for certain events under your home insurance policy. For example, if you have accidental damage cover, your phone may be covered if you accidentally break it while at home. It can also be covered on a home insurance policy while you’re out and about. Although you need to take out specific personal belongings or ‘all risks’ insurance for this.

Where can I buy phone insurance and how do I compare policies?

You can buy a mobile phone insurance policy from your network provider or from a standalone insurer (which will usually be cheaper). As part of your comparison, check the monthly and annual cost of the policy, as well as exactly what’s included for that price.

Pay close attention to:

  • Any exclusions
  • The excess you’ll need to pay (typically anywhere between £25 and £150)
  • How long it’ll take to get a replacement phone if you need one

Bear in mind that you won’t necessarily get a brand new phone. You’re more likely to receive a refurbished phone or an alternative, equivalent model.

Before buying a policy, make sure you don’t already have cover elsewhere, such as through your home insurance.

Liz Edwards, editor-in-chief at Finder, told us: “Check if you already have cover for personal possessions away from home in your policy – some include it as standard. 

“You may need to pay to add it, but it could still be cheaper, and it will cover other belongings too. Certain policies cover mobiles only under a specific ‘gadget cover’ add-on. 

“The downside of covering your phone on your home insurance is that if you need to make a claim, your excess is likely to be higher than it would be on a standalone policy. Plus your home insurance premium could go up at renewal time.”

Best mobile phone insurance deals right now

You can compare mobile phone insurance deals at Go.Compare.

We’ve also rounded up some of the best mobile phone cover options available, using an iPhone 13 and a Samsung Galaxy S22 as examples. We’ve used the cheapest handset each time, paying monthly, with £150 excess where you can set it yourself.

Switched On Insurance 

Monthly cost: iPhone 13 £5.75; Samsung Galaxy S22 £5.25

Cover level: Ultimate

Cover includes: Accidental damage, liquid damage, mechanical breakdown, cracked screen, accessory cover, worldwide cover, unauthorised calls, e-wallet cover, unlimited claims per year, theft and loss. 

Offers: Two months free when you buy an annual policy, 10% multi discount policy

Insurance2go

Monthly cost: iPhone 13 £5.99; Samsung Galaxy S22 £5.99

Cover level: Full

Cover includes: Accidental damage, liquid damage, mechanical breakdown, malicious damage, accessory cover, worldwide cover, e-wallet protection, unauthorised calls, theft and loss. 

Offers: Two months free when you buy an annual policy, 10% multi discount policy

Mobile Phone Insurance Direct

Monthly cost: iPhone 13 £5.49; Samsung Galaxy S22 £5.49

Cover level: Premium

Cover includes: Accidental damage, liquid damage, mechanical breakdown, screen damage, accessory cover, worldwide cover, unlimited claims per year, unauthorised calls, theft and loss. 

Offers: Two months free when you buy an annual policy, 10% multi discount policy

Loveit Coverit

Monthly cost: iPhone 13 £5.99; Samsung Galaxy S22 £5.99

Cover level: Premium

Cover includes: Accidental damage, cracked screen, liquid damage, mechanical breakdown, accessory cover, worldwide cover, unauthorised calls, theft and loss. 

Offers: Two months free when you buy an annual policy, 10% multi discount policy

Do I need mobile phone insurance?

Whether or not you need mobile phone insurance will likely depend on how much your mobile phone handset is worth, your financial situation and your attitude to risk.

An alternative option is to put money into a savings account each month to cover the cost of a replacement phone if something went wrong – known as self-insuring. 

To do this, it’s best to work out how much you’d need to put aside for a replacement phone by comparing refurbished or second-hand handsets on eBay.

For example, at the time of writing, you could buy a second-hand iPhone 13 (128GB) handset for £380 on eBay, meaning you’d need to save around £32 a month to have enough in your account after a year. 

However, this can work out to be more expensive per month compared to paying for phone insurance. Especially if you consider that the mobile insurance policies above are all roughly in the £6 per month ballpark.

There’s also the risk that you’ll damage your phone and need a replacement before you’ve saved up enough. Plus you won’t be covered for unauthorised calls.

But on the flipside, if you don’t need to claim, you get to keep the cash in your savings account (plus any interest earned) rather than lose it to your insurer.

Find out the pros and cons of buying a refurbished phone.