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Mobile phone insurance: not for everyone
The first thing you need to consider is the value of your phone. Due to the competitive nature of the industry, the mobile phone market develops at a rapid rate, with new phones (and more features) being introduced constantly. Many people are perfectly content not to play catch-up (or stay ahead of the game), and may hold on to their handset for a few years at a time, satisfied with a phone that can simply do the basic functions. It’s best to consider the cost of mobile phone insurance and balance it against the value of your phone. For example, with mobile phone insurance usually costing roughly AU$10 per month, if you phone only has a value of $50 you may be hoping that the phone breaks in the first few months simply to justify the cost of covering it.
If you’ve taken out a mobile phone contract with a company providing you with a free handset, it might be worth finding out what the procedure is if your phone is lost or stolen; will you be stuck with the contract or can it be cancelled?
If you are the owner of a smart phone, such as a RIM BlackBerry or Apple iPhone, then insurance is indispensable. Not only are these phones usually crucial to an owner’s lifestyle (especially for business use, making a few weeks without them almost unthinkable), but they’re also highly desirable to thieves.
Mobile phone insurance typically doesn’t just cover the cost of the handset (most companies covering you for the cost of unauthorised phone calls also), which is another factor worth considering, even if you could comfortably cover the handset’s replacement value.
What mobile phone insurance covers
If you’ve spent a large amount of money on your mobile phone and it isn’t covered by either your home insurance or your business insurance, specific mobile phone user’s insurance will be of particular interest. One possibility is to contact mobile phone provider and ask them about their designated insurance partner. This is not a guarantee of the best value policy, however, nor is it a guarantee that they will meet your specific requirements. It is always best to do as much research as possible, checking as many different insurance providers as possible. Mobile phone insurance starts at between $8 and $10 per month, covering some or all of the following:
- Repair (if your handset is damaged you can often choose to have it repaired
- Replacement (if stolen or damaged, your handset will be replaced)
- Reimbursement of unauthorised calls (thieves may not sell your phone immediately and may use it to make expensive calls until it is disconnected. You can get these bills refunded, often up to an amount over $1000)
- Reimbursement (for the cost of hiring a replacement)
Bear in mind that some insurers will not pay out if your phone was unattended when stolen, so check with your broker upon taking out a new policy. If you have an expensive phone, it’s natural to consider it an asset worth insuring. However, if your phone is not an essential asset and is not of a high monetary value, you may consider it better money sense to put aside ten dollars a month in a savings account instead, simply for mobile phone insurance purposes. That way, at the end of the year you will actually have a decent lump sum to put towards a new phone, should the worst occur. Obviously, if your phone isn’t stolen before your next upgrade, you’ll have that money available to you, rather than lost forever. This is just one possible alternative, but discuss with your insurance broker what mobile phone protection is on offer and consider if the extra expense is worth the stretch.
