Ditch these mobile phone insurance policies

Which companies offer the best mobile phone insurance policies for iPhones and standard phones? Donna Ferguson investigates.

If you’ve read Why you don’t need mobile phone insurance, you’ll know that not everyone needs mobile phone insurance. But if you do want it, and the peace of mind that comes with it, how much should you be prepared to pay? And what level of cover do you get in return?

Standard handsets

Here’s how policies from the major mobile phone networks stack up against each other for a standard phone:

Network	Excess on standard phone	Covered for accidental damage, theft, loss, anywhere in the world?	Monthly cost	Annual cost
O2	£25	Yes	£7.50 or £10 (depending on the handset)	£90 to £144
Orange	£15 (they call it an ‘administration fee’)	Yes.	£6	£72
Three	£25	Yes. Accessories are also covered up to £300.	£5 to £9 (depending on the handset)	£60 to £108
Vodafone	£15 to £50 (depending on the handset)	Yes.	£4.99 to £9.99 (depending on the handset)	£59.88 to £119.88

As you can see, Orange offers the best deal on a standard phone, while O2 offers the worst. If you bought cover for a year and then had to make a claim, you’d pay just £87 in total with Orange, while you could end up coughing up as much as £169 with O2. That’s 94% more!

So what nasty surprises are lurking in the Orange Care policy small print? First of all, you must keep proof of purchase of your phone and your account must be paid up to date, or they can refuse the claim. You also have to report any theft to the police within 48 hours for the claim to be valid. Exclusions include cosmetic damage, the cost of any phone-calls made on the phone after it’s been lost or stolen, the cost of replacing any accessories or software, and any theft from a place that is not locked or secure (unless the phone is on your person).

Specialist phone insurance

What if you went to an online specialist in mobile phone insurance?

I like Talkcover.co.uk. While the excess is higher than with Orange - £40 for a theft/damage claim, £60 for a loss claim and £75 for an international claim - with this insurer, you typically pay just £22.40 a year for cover for a handset worth less than £200 (as long as you pay for the full year’s cover upfront).

That works out at just £1.87 a month, compared to £6 a month with Orange.

The cost of insuring an iPhone

How competitive are the policies from the major mobile networks when it comes to iPhones?

Network	Excess on iPhone	Covered for accidental damage, theft, loss, anywhere in the world?	Monthly cost	Annual cost
O2	£50 on 8GB iPhone 3GS £75 on 16GB iPhone4 £100 on 32GB iPhone4	Yes.	£15	£180
Orange	£15 (they call it an ‘administration fee’)	Yes.	£12	£144
Three	£60	Yes. Accessories are also covered up to £300.	£12	£144
Vodafone	£50	Yes.	£12.99	£155.88

Again, Orange is the most competitive, despite the fact that its policy costs £144 a year, as it has a low excess of just £15. Meanwhile, O2 charges £180 a year – and a whopping £100 excess on the latest 32GB iPhone 4.

But I wouldn’t recommend getting any of these policies. And here’s why:

Rely on Apple

Apple is legally obliged to replace a malfunctioning iPhone – even out of its first year of warranty – for free under the Sale of Goods Act, as such an expensive gadget should reasonably last more than a year. It will also replace any maliciously or accidentally damaged iPhone for just £139.

Unfortunately, you have to present and trade in your damaged phone at an Apple store to take advantage of this service. Obviously if you’ve lost it or it’s been stolen, you can’t trade it in - but if you are willing to take this risk, then it works out cheaper than all of the insurance policies listed above!

Shop around for the best policy

There’s no need to rely on Apple however. As the annual cost column in the table below shows, specialist insurers offer much more competitive premiums than mobile phone networks, especially if you are able to pay upfront for an entire year:

Insurer	Excess	Covered for accidental damage, theft, loss, anywhere in the world?	Cover for unauthorised calls?	Monthly cost	Annual cost
Insurance2go	£50 (£75 if you lose the phone or it’s stolen)	Yes	Yes - limit is £1,000	£6.99	£64.99 if you pay upfront for a year - works out at £5.41 a month
CUSC Fonegard	£50	No - excludes loss	Yes - limit is £250 within any 24-hour period	£6.35 for 32GB iPhones, £5.75 for all other iPhones	£68 for 32GB iPhones if you pay upfront for a year, £64 on all other iPhones if you pay upfront for a year
Mobile Phone Insurance Direct	£50	No - excludes loss	Yes - limit is £100	£5.89	£70.68
Protect your bubble	£50	No - excludes loss	Yes - limit is £100	£5.99	£71.88
Protect your bubble	£50 (£75 if you lose the phone)	Yes	Yes - limit is £100	£6.99	£83.88

The cheapest policy in this table - offered by Insurance2go.co.uk - is £115 cheaper than the most expensive mobile phone network policy. That’s a saving of 176%! Plus, you’re covered for £1,000 of unauthorised calls (if your phone is stolen) with this policy.

Are there any nasty surprises lurking in the small print? You must report a theft or loss to the network within 24 hours, and you must be able to confirm the time and place of a loss. You’re not covered if you lend your phone to anyone outside your immediate family and you need to be able to provide proof of purchase. The phone must be less than six months old when you purchase it. Exclusions include the sim card, accessories, damage to the phone due to a software malfunction and accidental damage when the phone is unattended.

Overall, however, I think it’s the best iPhone policy on the market, if you can pay upfront. In fact, I intend to take it out to cover my own iPhone. But before I do, I’d like to hear what you think. Do you know of any better policies? Have you dealt with insurance2go.co.uk and how have you found their customer service? Let us know using the comments box below.

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