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Is it worth buying gadget insurance?

Paloma Kubiak
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Paloma Kubiak

Brits are increasingly glued to smartphones, tablets and electronic devices to get the latest news, views and games. With such high dependency on these gadgets, should you fork out for insurance?

In the past two years, as many as a quarter of UK smartphone owners have experienced a ‘technological trauma’, according to Mintel research.

People aged 16-24 are the most accident-prone, with 48% smashing their screen in the last two years. But just 7% of people aged 55 and over have suffered a cracked screen.

Protect Your Gadget, an insurance comparison site, said the highest number of claims among clients come from accidental damage from dropping a device or water damage.

There has also been a recent spate of muggings where thieves have targeted victims for their phones.

Screen repair or replacing a phone can be expensive, with the latest handsets costing up to £1,000. So, is it worth buying gadget insurance?

Check your home insurance policy

Before considering gadget cover, check your home insurance policy as certain gadgets may be included. According to Comparethemarket’s latest research, 10% of UK adults may actually be paying twice to protect their gadgets by not checking their contents insurance first.

Chris King, head of home insurance at the comparison site, says: “Generally, you can set a limit to the value of high risk items you have, only needing to add individual items if they’re over a set amount, known as a ‘single article limit’. There are sometimes exclusions or special conditions that can apply to high risk items, so it’s worth reading the small print on your policy.

“For things you take out and about with you – such as phones – it’s worth also looking out for personal possessions cover, which will provide cover should you lose your item or it’s stolen. This isn’t usually included in a standard home insurance policy, so if this is something that would suit your needs, it’s worth asking your insurer to add it on.”

James Brown, director of gadget insurance provider, Protect Your Bubble, says it’s essential to check policies to “avoid disappointment when you go to claim.”

“If they are included in your policy, it’s likely they’re covered for any theft or accidental damage that occurs solely in the home. As many cases of loss or theft take place on the street, it may not be covered out of home unless you add this on as an extra.”

Brown adds it’s also worth noting that home insurance may have single item value limits that may not cover the expensive smartphones that exist on today’s market.

“The excess cost for home insurance is often quite costly too which will only rub salt into the wound when claiming for your gadget. There’s also the issue of your home insurance premiums which are likely to increase if you do make a claim as well as the loss of your no claims bonus. The bottom line is that all home insurance policies differ, so make sure you check what yours covers before taking it out.”

However, King adds that if you find your gadget isn’t covered by your contents insurance, it’s worth calling your insurer and seeing if this is something that can be added onto your policy.

“Typically, the additional cost to your premium will be significantly less compared to the cost of taking out a separate gadget insurance policy,” he says.

Packaged bank account holder?

If you’re a packaged bank account customer (i.e. you pay to bank), you may be rewarded with a benefit such as mobile phone cover.

According to campaign group Which?’s recent research into packaged bank accounts, 12 of the biggest high street banks offer mobile phone cover, where a replacement phone is given or customers are given up to £2,000 mobile phone cover limit.

Again, it’s worth checking if your phone is covered, but if you have other gadgets, you may need stand-alone cover.

Stand–alone gadget insurance

If you’ve checked both your home insurance and packaged bank account terms, you can now consider stand–alone gadget cover.

Andy Newman, head of personal finance at Debenhams, says gadgets can be pricey but smartphones are a vital asset to our daily lives.

He says: “Although the market did see a decline in pricing due to cheaper iPhone options appearing on the high street, the average price of a smartphone rose by 10% last quarter, compared to the previous year – a significant jump.

“But something simple like a cracked screen can cost anywhere between £50-£100 on the high street and it’s important consumers don’t pay over the odds for insurance from phone networks and retailers.”

Newman adds consumers should check whether policies allow for an unlimited number of claims and whether they also include unauthorised usage of the device or e-wallet, not just the usual theft or accident.

How to choose gadget insurance

Eleana Martyn, manager of Protect Your Gadget, explains that when comparing gadget insurance, the type, make and model, age and whether it is new or refurbished all play a part in determining cost. But the level of cover you would like will also affect the price, such as loss, accidental damage cover, theft cover and how much excess you’re willing to pay.

Martyn says: “Every insurance company offers differing cover levels but will also have different underwriting requirements – for example, some providers may not cover gadgets over a certain age.”

Price wise, quotes taken from the comparison site last week reveal the following:

  • For full cover (theft, loss and accidental damage) on an iPhone 7 32gb that is six months old – pricing is £7.60 a month on average, or an annual premium of £80.
  • For full cover (theft, loss and accidental damage) on a Samsung S8 that is six months old – pricing is £7.80 a month on average, or an annual premium is £79.30.
  • For full cover (theft, loss and accidental damage) on an Apple iPad 32GB that is six months old – pricing is £6.50 a month on average, or an annual premium is £79.

On device type, mobile phones (87.3%), particularly the Samsung S8 is the most popular gadget to protect, followed by laptops (5.11%), tablets (3.14%), cameras and camcorders (1.94%). Sat Navs are covered in just 0.01% of policies bought via Protect Your Gadget.