How To Insure Your Smartphone

Co-author: James Hurwood

Whether you plan on purchasing a mobile phone outright or locking into a contract (a mobile phone plan) to acquire your shiny new smartphone, it’s still an expensive piece of kit. Considering how much we use our smartphones, and most of us carry it everywhere we go, it’s pretty easy to imagine your phone could be damaged, lost, or stolen.

So how can you insure your phone in the case of damage or loss? There are several ways, which we explain in detail below.

What is smartphone insurance?

Smartphone insurance provides cover for your smartphone or other electronic mobile device such as tablets. Smartphone insurance can be bought through your contents insurance or as a standalone policy from your mobile phone provider (see below for details).

Portable electronic devices are extremely valuable but are also very easy to damage. Covering your smartphone or other electric device is the best way to offset the cost of repairing or replacing them in the likely event that something goes wrong.

Depending on what policy you get and where you get it from, smartphone insurance can cover any of the following things:

• A replacement device if your phone is stolen
• Reimbursement of unauthorised calls
• Worldwide travel cover (short-term)
• Mechanical failure
• Accidental loss or damage
• In some cases, policies can also cover replacement of accessories like earphones and cases for loss or damage

As with other contents insurance policies, a common exclusion is that smartphone insurance will usually not cover you if your phone is damaged or lost due to circumstances that you could have easily prevented. For example, you will probably not be covered if you leave your phone unattended in an unlocked vehicle.

Another common exclusion may be the usual wear and tear. For example, your insurance may not cover your phone if it has simply worn out after years of use (e.g. the battery life is decreasing with age).

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How do you get smartphone insurance?

There are several ways that you can acquire smartphone insurance:

1. Contents insurance inclusion
2. Telco provider/manufacturer
3. Credit card purchase protection 

Insure your phone with contents insurance

One way to cover your smartphone is through your home and contents policy. As part of the contents of your home, your mobile phone may be covered in and around your home.

Check how much cover your policy provides for mobile devices – is it enough to replace your smartphone if necessary?

Compare Contents Insurance

If you want your phone to be covered when it travels with you away from your home, you will usually have to add an optional cover known as portable valuables cover. This may cost an extra premium on top of your usual contents insurance premium.

This will insure your phone against any loss, theft, or damage sustained away from home, and you can also obtain portable valuables cover for jewellery or a laptop while away from home.

Keep in mind the excess charged on your contents insurance policy – the amount of money that you have to pay from your own pocket before the insurer covers the remainder of the loss. If the excess is more than a few hundred dollars, insuring your smartphone may not be worth it. Learn more about the home and contents insurance excess.

If your device is stolen, you will usually need to file a theft report with the police within 48 hours if you wish to make an insurance claim for the loss. You usually also need to notify your insurance provider within 14 days of the loss, and you should always make an effort to find your proof of purchase (such as a receipt).

Looking to insure your valuables? Below are the highest rated contents only policies on our website that have links directly to the provider’s sites. These results are based on contents only policies in New South Wales for items below $75,000 in value. 

Compare Contents Insurance

Insurance from your mobile provider

If your home and contents insurance policy doesn’t cover your smartphone, you may be able to get cover through your mobile phone provider.

Many mobile providers offer smartphone insurance for phones under their contracts, either as an add-on to the cost of the customer’s plan, or as an after-purchase extra down the road.

If your phone is an iPhone, you’re in luck; Apple provides a complimentary 90-day warranty with their products, as well as offering extended warranties for purchase (at the time of writing).

You’ll find that most of the major telecom providers in Australia – Telstra, Optus, Vodafone, and Virgin – offer some form of smartphone insurance, according to whistleout.com.au. If you’re going with a smaller provider, then you’ll need to check with them what their coverage options are.

Note that just as with your contents insurance, smartphone insurance from your mobile provider won’t cover your phone if it is left unattended. Mobile providers also exclude from coverage the usual wear and tear, cosmetic damage, and damage from fire or rain.

Credit card purchase protection

Another way your smartphone could be insured is through a purchase protection insurance policy via a credit card. Purchase protection (also referred to as merchandise protection or purchase security) insures the belongings you buy with your credit card for a period of time.

In many cases, this period of time is up to three months or 90 days from the date of purchase. This is the timeframe specified by the vast majority of card providers that offer this feature, although some offered cover for up to 6 months from the date of purchase.

At the time of writing, there are 30 credit card providers on Canstar’s database that will cover damage to or theft of your smartphone in some way as a part of a purchase cover policy. When reimbursing you, most providers will cover you for the value of the phone minus 1.75% of its value for every month that you owned it. Again, this varies from provider to provider, so make sure you check the relevant product disclosure statements.

Keep in mind that some providers exclude cover to mobile phones that are part of a post-paid plan or contract, so make sure you read the PDS.

Looking for a credit card that covers your smartphone? The table below displays a snapshot of credit cards on Canstar’s database with purchase protection insurance and links to the provider’s websites, sorted by Star Rating (highest to lowest). Please note the Star Ratings are based on a rewards card with a $5,000 monthly spend. 

One of the key benefits of purchase protection insurance through your credit card is the lack of ongoing costs – you only have to pay an excess if you want to make a claim (more on this below). In addition, purchase protection will cover you for a whole host of other items too, not just your smartphone. To claim on damage or theft to an item, it generally needs to be:

• In your possession
• Purchased solely for personal use (not business use)
• Worth less than a specified price (often around $3,000-$5,000)

You can void being covered for your smartphone and other insured items if you don’t take proper care of it, leave it unattended or damage it as a result of illegal activity. So simply dropping your phone on the pavement or having it stolen from your back pocket will generally be insured (provided you have the receipt), but leaving it in your car or jumping into a pool with it will not.

So if you have a credit card and your phone has been damaged or stolen within the first few months of purchase, it could be worth checking with your credit card provider to see if they’ll replace it.

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American Express smartphone screen insurance

In addition to purchase protection insurance, there is a unique benefit offered to American Express cardholders – smartphone screen insurance. This covers you for the cost of repairing your smartphone screen alone, up to the cost of $500. To claim on this policy, take a photo of the receipt you get after repairing your screen and attach it to an online claims form with AMEX. Note that this policy is limited to:

• The American Express Explorer card
• The American Express Essential card
• The American Express Platinum Charge card

American Express Credit Cards

For now, it is only American Express that offers this feature among credit card providers, but it will be interesting to see if others will follow in their footsteps.

How much does smartphone insurance cost?

Smartphone insurance is affordable if you already have coverage through contents insurance or a purchase protection policy on a credit card.

However, if you’re looking for smartphone insurance from a mobile provider, this is relatively cheap initially, but the premiums add up over time. If you never need to make a claim, it may sometimes be cheaper to simply pay for any damage yourself rather than buying smartphone insurance from a mobile provider.

Usually you can expect to pay about $10-$15/month, which can add up to over $120/year. For example:

• Optus charges a premium of $14/month
• Vodafone charges a premium of $15/month
• Telstra charges a premium of $15/month

This is just a general look at the prices from the major mobile providers, so you might be able to find cheaper options out there if you do some digging.

In addition to the monthly premium, there is often a “service charge” (similar to an insurance excess) of about $100-$150 if your device needs replacing. So smartphone insurance from a mobile provider ends up being quite expensive in comparison to how much you’re paying for the device.

Should you get smartphone insurance?

If you have a history of going through smartphones like a knife through butter, or if you travel a lot, then it would be worth checking if you are insured via one of the methods mentioned above. There are pros and cons to each method, however.

With all of this in mind, it’s still important to remember that your phone will have a warranty no matter what. And if your phone is downright faulty rather than lost or damaged, the Australian Consumer Law is there to help you with getting a refund or exchange for your faulty smartphone.

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Featured image source: Apple (YouTube)