Is gadget or mobile phone insurance worth it?

Gadget insurance is sold at the point of purchase, when the item feels most valuable and the premium feels small. Judged calmly it is a straightforward arithmetic question with one complication: the cover you may already have, which is where most of the wasted money goes.

Step by step

1. Check your home contents policy first.Many include personal possessions cover, either as standard or as an add-on, which can cover items away from the home. Check the single-article limit as well as the total.
2. Check any packaged bank account.Accounts with a monthly fee frequently include mobile phone cover. People pay the fee for years without ever registering the phone.
3. Add up the real cost of the policy.Monthly premium times twelve, times the number of years you will keep the device, plus the excess you would pay on a claim.
4. Compare that with the replacement cost.Not the original price — what it would cost to replace with an equivalent device today, which for phones falls quickly.
5. Read the exclusions before anything else.Unattended items, loss as opposed to theft, damage without a police or provider reference, and claims where the device was not reported within a stated period are the common defeats.
6. Check the excess and the claim limits.A low premium with a high excess and a limit of one claim a year is a different product from what the headline suggests.
7. Check what a replacement actually means.Many policies replace with a refurbished equivalent rather than a new device. That is not necessarily bad, but it should be priced in.
8. Consider a repair fund instead.For a household with several devices, putting the premium into a savings pot covers repairs across all of them and keeps the money if nothing breaks.
9. Decide differently for expensive and cheap items.Cover makes most sense where the replacement cost would genuinely hurt and least sense where you could absorb it.

Tips

• If you have a packaged bank account, find out what it includes today. It is the most commonly forgotten cover in UK households.
• Registering the device with the insurer at purchase is often a condition. Cover you never activated pays nothing.
• Loss and theft are treated differently by most policies. Check which is covered — it materially changes the value of the product.

Common mistakes

• Buying at the till without checking existing cover — Contents insurance and packaged accounts frequently already cover it, so the premium buys a duplicate.
• Ignoring the excess when comparing — A cheap premium with a large excess can cost nearly as much as the repair it is meant to fund.

If it doesn't work

Questions people ask