Is mobile phone insurance worth it?

These days there’s an insurance product for just about everything. Health, cars, homes, pets… then there’s weird stuff like alien abduction insurance and falling satellite insurance (seriously, look it up). Compared to those, mobile phone insurance is pretty normal, but as it’s not as commonplace as health insurance and pet insurance, you might be wondering what it entails and whether or not it’s worth shelling out for.

Let’s find out.

Mobile phone insurance is a financial safety net should your phone get stolen, damaged or lost. Most policies will cover the cost of replacing or repairing your phone, which, given most new flagship phones range from $1,000 to upwards of $2,000, can offer a lot of peace of mind.

Some insurance providers will allow you to bundle your mobile phone insurance (along with insurance for other portable valuables, like jewellery, cameras, tablets and laptops) with your home and contents insurance for an additional amount on top of your annual premium. This is usually referred to as portable valuables insurance, portable items insurance, or portable contents insurance.

It works much the same as every other insurance product. You pay a fee (usually monthly or yearly), and if your phone gets lost, stolen or damaged while you’re covered, you’ll pay an excess and your insurer will pay to replace or repair it.

It’s important to note that not every mobile phone insurance policy covers the same thing. Some may cover theft, some may not. Others might cover you for a replacement screen if yours gets cracked, while others may not. Be sure to read the Product Disclosure Statement (PDS) before purchasing so you know exactly what you’ll be covered for. We also recommend checking the excess payment, as you will need to pay something upfront once your claim has been approved. Excess for mobile phones tends to range between $100 and $300.

Insurance premiums vary based on a number of factors. For mobile phone insurance, those factors usually include the make, model and age of your phone, the excess payment, whether or not you require worldwide cover, and whether or not you want to include coverage for theft or specific types of damage including cracked screens or water damage.

Typically, prices range from less than $10 per month to around $20 per month, though if you opt to cover your device with portable contents insurance, you’ll pay for that cover along with your usual home and contents insurance, and the cost will differ depending on what and how many personal effects you have covered.

So, you’ve just accidentally dropped your phone off your apartment balcony. Or you’ve had your bag stolen on a night out. Whatever it was, you’re now without your phone, and you’re panicking.

Making a claim on your mobile phone insurance is as simple as logging into your insurer’s site and making a claim online or just giving them a call. Just like if you had a car accident or damage to your home, you’ll need to provide evidence of ownership (like a purchase receipt or bank statement), photos (in the event of damage) and, in the event of theft, a police report.

As is the case with just about every insurance product, essentially what you’re paying for is peace of mind, and it’s up to you whether or not you’re happy to pay $15 (or so) per month for that peace of mind. Chances are you won’t need to make a claim at all, but on the off chance that you do, it can be a huge relief to know you only have to pay a small excess rather than thousands of dollars for a brand-new device.

Alternatively, you can always DIY it and put a little money aside every month in an emergency fund for moments just like these.