Phone insurance

Adding a phone to contents insurance

Your phone may be partially covered by insurance you already have, such as contents cover. Adding your mobile phone to an existing or new insurance policy can be a cost-effective way of insuring it in and around your home. However, it is important to note that these policies will only cover your gadget in certain situations and might not protect your phone when you need it most.

• What does it cover my phone for? Policies only pay out in the event of specific types of damage, like impact or fire, and disasters, like flooding or storms.
• What is not covered? You might not be able to claim for events like dropped phones or water damage. Certain limits may apply for items like portable possessions or electronics and it may not cover the entire cost of repair or replacement.
• Am I covered outside of my home? No, most policies will not cover possessions outside of your home. You'll need to purchase additional portable contents cover and check the applicable conditions and limits.
• What does portable contents cover? It can insure your phone against any loss, theft or damage that occurs away from home. Home insurers may offer cover for specified items or cover a wide range of possessions that won't need to be specified but have individual item limits.
• What else should I consider? Making a home insurance claim may be more difficult than claiming on a dedicated phone insurance plan, and the excess may be impractically high for claiming just one item like a phone. Your premiums may also increase if you make claims on contents insurance policies.

Single item insurance

Single item insurance or standalone gadget insurance is a relatively new type of cover in the insurance world. You'll find a few big names such as Bendigo Bank and NRMA, along with some new faces like Butter Insurance, Insurance4that and Raiz that offer some form of single item insurance.

These policies are generally bought online and designed to cover you for specific items, including your phone. All you need to do is go to their website, answer a few basic questions about your phone and its value, get your quote and pay. While policies differ from one insurer to the next, you'll generally find they'll cover you for:

• Accidental damage to your phone
• Someone stealing your phone
• Protection outside of your home

Just make sure your phone was purchased from a registered Australian business and that you don't leave your phone unattended, or your claim could be denied.

Credit card purchase protection

Many credit card companies offer purchase protection for mobile phones as a benefit for cardholders. This type of cover is designed to protect you if your mobile phone is damaged, lost or stolen within a certain time frame after purchase. The details of the cover can vary between credit card companies, but some of the common features include:

• Eligibility. The mobile phone must be purchased with the credit card and some cards may have restrictions on the type of device or where it was purchased.
• Timeframe. There is typically a limited timeframe in which the purchase protection applies, usually around 90 days from the date of purchase, but can be up to 6 months.
• Coverage limits. There may be limits on the amount of protection provided, such as a maximum claim amount or a limit on the number of claims that can be made per year.
• Excess. Some credit card companies may require an excess to be paid before the cover kicks in.
• Claims process. The process for making a claim may vary between credit card companies, but it is typically straightforward and can be done online or over the phone.

It's important to note that credit card purchase protection is not the same as phone insurance, and there may be restrictions or exclusions that apply. For example, the cover may not apply to loss or damage due to flood, earthquake or wear and tear. Phone defects in general may be covered through a manufacturer's warranty which typically applies between 12 to 24 months.

Mobile provider cover

Recent Telco reforms have led to mobile providers like Vodafone and Optus dropping their phone insurance offerings to new customers. To replace its mobile insurance, Telstra has an alternative program that offers some cover for phones called Upgrade and Protect:

• How does it work? It's a $15 per month service that lets you upgrade your phone before your contract ends.
• How much does an upgrade cost? An upgrade is free for phones in good working order in the second half of your contract. Earlier redemptions have a $99 fee and damaged phones have a $249 fee.
• What about screen replacements? You can replace your screen for $99 and a consultant will come to you if you're located in an eligible postcode.
• What conditions apply? You must add on Upgrade and Protect when you buy your new device on a repayment contract but can cancel anytime. You can make two damaged device upgrades per service every 12 months.