If you're thinking of taking out mobile phone insurance, it might be time to think again..
Imagine this: You've recently purchased a brand new shiny mobile phone and you're chuffed to bits with it. But because you're prone to losing things, you decide it might be wise to take out some mobile phone insurance.
As you consider this, your phone rings. It's someone from the mobile phone shop offering you a really great deal on mobile phone insurance.
Perfect, you think. What great timing. This is just what I need.
So you snap up the deal, hand over your bank details and away you go.
It's only later that you discover that the person who phoned you wasn't who he said he was, and your phone isn't covered at all. And by that point, your bank account is looking decidedly less healthy.
To insure or not to insure
The sad truth is, mobile phone scams like the one I mentioned above are serious business. In fact, Trading Standards is currently investigating 10 companies in Swansea to get to the bottom of it all.
But this begs the question, do you actually need mobile phone insurance in the first place? Or is that in itself just another rip-off?
Admittedly if you've just bought a swanky new phone model, you might be a little paranoid about losing it and may prefer to get it insured. But mobile phone insurance is an expensive business.
I have to confess I've never really made my mind up about the whole mobile phone insurance malarkey. Initially I didn't bother. But after I had my nice new phone stolen a few years ago and someone kindly racked up a bill of £100 for me, I vowed to get some insurance. And I did.
The trouble was, once I had it, I felt like I was throwing money down the toilet. So, deciding to be extra careful with my phone, I cancelled my policy and I haven't regretted it -- yet.
Going for it
If you're trying to assess whether you need insurance or not, it's worth considering how careful you are with your mobile and how likely it is that you'll lose it. If your mobile is stuck to you like glue at all times, you'll probably be better off not bothering with phone insurance. But if you lose it on a regular basis, insurance could be worth it.
If you are looking to take out a policy, you're better off shopping around and doing research yourself. Don't be tempted by deals offered to you from cold callers.
And if you do receive a call and believe it might be genuine, hang up and call the company back. A trustworthy company will be happy for you to do this. You can also check whether the company they claim to work for is legitimate by checking the FSA Register - however, this won't work if the caller pretends he's from a legitimate company.
When you're considering your options, don't just decide to plump for your mobile phone provider for the sake of convenience either. Their policies are usually more expensive. For example, looking at O2's website, I found you can get a standard policy for around £72 a year, while Vodafone and T-Mobile charge around £83 per year.
But having had a look for a stand-alone mobile phone insurance, I've found insurance policies from around £30 a year -- that's less than half the price! So it really is worth browsing sites such as insureyourmobile.co.uk, insurance4mobiles.co.uk and mobilephoneinsurance2u.co.uk.
That said, insurance policies can vary in price depending on what they cover. So when you're doing your research it's worth considering the following:
- Will it cover you for calls made by someone else if your phone is stolen?
- Will it cover family members if they have been using the phone?
- Will it cover you if you go abroad?
- Will it cover mobile phone accessories?
- Will you need to pay an excess and how much?
- Will it cover you for accidental damage and loss as well as theft?
Be warned that some insurance providers will also reserve the right to send you a second hand replacement phone if they think it's of equivalent specification. Policies will also vary depending on whether you're on pay as you go or monthly contract.
Finally, you'll need to report your loss or theft quickly -- in many cases your phone won't be covered if you fail to tell your network provider within 24 hours of discovering the theft/loss and fail to tell the police within 48 hours.
The alternatives
Rather than taking out a separate mobile phone insurance policy, you could opt to take out an 'all risks' addition to your home insurance policy. This covers valuables taken outside the home, usually against loss, theft or accidental damage -- and this typically costs from around £20 a year.
Just make sure you check the terms and conditions of the policy carefully -- it's worth referring back to the questions above for guidance.
Alternatively, you could put some money aside each month into a savings account. And if you shop around for a good account, you can accumulate a tidy sum of interest as a bonus.
What's more, if you've got an old spare phone to hand, it might be worth holding onto in case of an emergency. I've got an old one tucked away in a drawer somewhere and yes, it's not terrible fancy or flashy, but if I lose my phone I can pick up a duplicate SIM card fairly cheaply and use my old phone for a while.
And as an extra bonus, because I'm on a monthly contract I'm entitled to a new phone when I renew my contract. So depending on when I lose my phone I may only have to wait a few months until I can get a nice new model! Sorted!
So whatever you decide to do, make sure it's the right choice for you personally. And be very wary if anyone offers you a fabulous deal over the phone. Remember if it sounds good to be true, it probably is.
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