TL;DR
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- Phone insurance covers smartphones against accidental damage (including cracked screens), theft, and sometimes loss.
- Average cost: 5 to 15 pounds per month depending on handset value.
- Network insurance from O2, EE, Vodafone, and Three is convenient but often more expensive than standalone policies.
- The excess is critical: a 75 to 150 pound excess on a claim for a 3-year-old phone may exceed its market value.
- Home contents insurance with personal possessions extension may cover your phone at lower total cost.
- Check whether your policy is new for old or market value: this determines how much you receive on a claim.
Key Facts
What Does Phone Insurance Cover?
Phone insurance covers smartphones against a range of risks. Accidental damage is the most commonly claimed event: dropping the phone on a hard surface, cracking the screen, water ingress, and similar accidental incidents. Cracked screens alone account for a large proportion of all phone insurance claims. Theft covers the phone if stolen from your person or a secure location. Loss is covered by some but not all policies, typically at a higher premium and excess. Breakdown covers mechanical or electrical failure outside the manufacturer warranty period.
Some policies also cover unauthorised calls, texts, and data usage made after the phone is stolen, up to a specified limit. This can partially offset the cost of SIM misuse before the network blocks the SIM. Check whether this cover is included and what the limit is.
Network Insurance vs Standalone Policies
O2, EE, Vodafone, and Three all offer phone insurance at the point of sale or through their apps. Network insurance is convenient because the phone is already registered with the network and claims are processed through a familiar brand. However, network insurance is typically more expensive per month than equivalent standalone cover from specialist phone insurers. A flagship handset insured through a network may cost 15 to 18 pounds per month, while a standalone policy for the same device may be available for 10 to 13 pounds per month with comparable cover.
Retailer insurance sold at the point of purchase by Apple, Samsung, or retailers like Currys is similar to network insurance in convenience and in cost. Apple Care Plus at approximately 9 to 25 pounds per month (depending on the device) covers accidental damage and battery service, though it does not cover theft. It may be the most appropriate cover for Apple device users who primarily want accidental damage protection rather than comprehensive theft and loss cover.
The Excess: The Most Important Number to Check
The excess is the amount you pay towards each claim. Phone insurance excesses typically range from 50 to 150 pounds per claim, with higher excesses on premium devices. The excess is deducted from the settlement or paid upfront before the replacement is provided. On a phone that is two or three years old and has depreciated significantly in market value, an excess of 100 to 150 pounds may represent a substantial proportion of what the phone is actually worth. Before purchasing phone insurance, calculate the realistic claim value after excess deduction and compare it to the annual premium to assess whether the cover is cost-effective at different points in the phone lifecycle.
New for Old vs Market Value
A new for old policy replaces a claimed phone with a new equivalent device. A market value policy pays the current second-hand or depreciated value of the phone at the time of the claim. For a premium flagship phone in its first year, the difference may be modest. For a two-year-old phone that has lost 40% to 60% of its original value, a market value settlement may be significantly below the cost of a replacement. New for old policies typically cost more but provide substantially better protection for the phone lifecycle.
Frequently Asked Questions
Is phone insurance worth it?
For a flagship smartphone costing 800 to 1,500 pounds, insurance is more likely to be worthwhile than for a mid-range device. Calculate the realistic claim value after excess on the most likely claim (cracked screen repair costs approximately 100 to 350 pounds for most smartphones) and compare it to the annual premium.
Does home insurance cover my phone?
Standard home contents insurance covers a phone inside the home. A personal possessions extension covers it outside. Single-item limits of 1,500 to 2,000 pounds may be adequate for most phones. Adding accidental damage cover brings the cost closer to standalone phone insurance.
What is the excess on phone insurance?
Typically 50 to 150 pounds per claim. Higher on premium devices. The excess is deducted from the settlement or paid before a replacement is provided. Check the excess before purchasing and consider how it affects the cost-effectiveness of claims.
Does phone insurance cover loss?
Only on some policies. Loss coverage (unexplained disappearance) is an optional extra that increases the premium and usually comes with a higher excess. Not all providers offer loss cover.
