This question is already so well-researched and you can find many links on the internet which focus on the smartphone insurance issue. Yet we receive calls and emails weekly with regards to this problem. So here is a rough idea how most mobile phone insurances work and what you would be expected to pay in case of a claim. We are going to discuss what you need to pay particular attention to and how budget-friendly repairs can be useful in case your smartphone gets accidentally damaged.
A short guide for smartphone insurance
Factory Warranty
The Factory Warranty is a manufacturer’s guarantee to repair your phone or mobile device if something goes wrong with it that isn’t your fault. Of course, restrictions apply, so it’s important to check what is and isn’t covered under the warranty. Check how long it lasts for, especially when you are buying an expensive high-end smartphone or other mobile device.
Factory guarantee is legally binding and it covers your smartphone for a year with the exception of consumable electronics, which include accessories, battery and headphones i.e. small electrical goods that might have shorter life-time due to more frequent use.
This means your newly bought mobile phone is insured for at least a year and the warranty covers any mechanical or software breakdown if it isn't your fault. Rooting, Jailbreaking and unauthorised unlocking will end your warranty. Accidental damage (dropping your phone and smashing the screen) or liquid damage (spilling water or juice on your device) are not covered. They are your fault.
Mobile phone and smartphone insurance
As Factory Warranty does not cover accidental damage, theft, lost or stolen devices and smartphones which have been in contact with liquid; network suppliers and mobile phone insurance companies offer you an Extended Warranty when you buy your new smartphone and you pay for an insurance with it within the first 30 days of purchase. However what is and isn't covered by the insurance is subject to terms of the insurance policy.
So always read the small print!
Do not insure old mobile phones which are inexpensive to replace.
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| Businessmen holding old mobile phones - Do not insure old mobile phones which are inexpensive to replace! |
How does smartphone insurance really work?
Most smartphone insurance will be valid for up to 24 months or they last till your contract with the network provider expires. What does it cover? That's the small print.
Make sure you read the small print and look for answers to these specific questions:
- Is my smartphone covered for accidental damage?
If you drop your phone and smash the screen, or you accidentally spill juice on your device, will you be covered?
- Is my smartphone covered for accidental loss or theft? Are there exceptions?
If you lose your device or you become a victim of pickpocketing, will your smartphone be covered? Some insurance policy says if you left your phone unattended in a public place, the insurance will not cover your loss.
- Is there an excess fee when claiming?
Excess fee is a fee that you have to pay when you are making a claim. This usually ranges from £25 up to £100. Check in the small print how much you would pay to make your first or second claims within the 2-year-guarantee.
- Up to how much does the insurance cover your phone?
How much they would pay in case of a successful claim.
- Does it also cover part of your bill or only the device is insured?
Some insurance policy will cover a part of your phone bills in case of unauthorised calls. It can be pretty useful if you happen to become a victim of theft and the thief has used your phone for calls for especially if this all happens abroad.
- How many times can you make a claim during the warranty period?
Most phone insurance policies will allow you to claim up to twice in two years.
The most important thing to remember when you are about to purchase a mobile phone insurance is that it must cover you for the things and accidents you might need in your particular circumstances.
Keeping this in mind, it is possible that you do not even need a smartphone insurance.
No matter how pushy the phone promoting sales staff is, you are not required to buy a phone insurance. If you do not think you need one, just tell them so.
In case the pushy staff succeeded; don't worry, there is a 14 days cooling off period, when you still can step back from the insurance and all money paid will be refunded. Not much can be done after these initial 2 weeks; the insurance contract will legally bind you till its expiration date after the cooling off period.
Smartphone insurance policy in practice
Now we are going to look at your financial investments with regards to the phone insurance and the mobile phone you just purchased.
What have you paid for your smartphone so far? What would you pay if you accidentally broke your iPhone 5 screen in the 6th month or 12th month??
As mobile phone insurance policies can vary greatly, we will look at an average premium insurance and examine how it would work out for you on the long run. A premium insurance's price with most networks ranges from £10 to £15. Let's count with an average: £12.50 a month, which makes £300 in the next two years.
The other factor in our calculation is the current price of the device. A newly purchased iPhone 5 is around £600. As soon as it leaves the shop/factory its value will be considerably reduced by around 20-30% after a year your phone will worth 50% less i.e. during your insurance period you are insuring your phone for £600 while it is actually worth less. Not to mention that if nothing goes wrong, you are wasting another £300 for the insurance only. But you can never be sure enough, so let's look at what happens if you break your iPhone 5 after 6 months of use.
In the 6th month, you drop your smartphone and smash your new iPhone 5's LCD screen. What happens next? You will need to make a claim to receive a replacement device, payment for damage or some insurance companies use repair shops to get these faulty phones fixed usually within 4-7 days. To be able to access any of these services, mobile phone insurance policies set a so-called excess fee to pay in case of any claims. The average amount you will pay is £75 and most likely you will receive a new handset "free" unless the insurance company sends it off to the repair shop.
The average premium insurance however only insures you up to £300, so if you lose your smartphone, you're just better off buying a new one. If the damage, device, repair or anything costs more than £300 you will be required to pay the difference.
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| Budget-friendly smartphone, computer and laptop repairs in London - GA Repair Services |
Budget-friendly smartphone repairs
So you have already spent £375 for a replacement phone. If you lost it, it might be a good call to claim, although you could have just bought a refurbished or used iPhone 5 for a similar price instead.
If it is a simple screen replacement, then oh boy! Budget-friendly iPhone 5 screen replacement prices range between £45 and £75. That's less than the excess fee you pay to claim your insurance.
And remember that you can only claim twice during your insured time-period.
Cheap iPhone screens are not as high quality as the original ones, but it is a budget-friendly solution for a quick replacement and they work perfectly.
Have a look at GA Repair London's budget-friendly prices here.
Shall I buy mobile phone insurance then?
Well, this clearly depends on your individual circumstances. Are you often clumsy? Do you have a long and busy history of lost or stolen mobile phones? Do you accidentally leave your smartphone in the cab's back-seat or on the table in a restaurant sometimes? Perhaps, it happens often-times? If your answer is yes to any of these questions then you might need to consider paying for an insurance.
If your answers are no then you might end up paying for something that you will never use.
The choice is truly yours.
Do you have a mobile phone insurance? Do you have a good story about insurance claims?
Share your thoughts with us.
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