Mobile Phone Insurance - Essential Or A Bit Of A Con?

[Hands0n]

Prompted by a recent unfortunate experience I decided to investigate Mobile Phone Insurance. Although "protected" by my travel insurance the compensation is only for depreciated value, whatever that turns out to be. It certainly is not "new for old" cover. Too late now, admittedly, but these theft and loss can happen at any time, these are very expensive devices, and in this day and age it is perhaps sensible to consider taking out suitable cover.

Don't get me wrong. Something is better than nothing, so even depreciation value is worth having. But I do recall times when new for old was pretty much the norm for mobile phones.

So, with all that in mind, I spent a couple of hours on Google and the typical comparison websites. I also visited Martin's Money for any good advice or links. I was shocked!

The number of insurers offering New for Old cover is as rare as unicorn droppings. They are out there, but they are now few. And you have to take very great care to make sure that the insurance cover is adequate for your purposes. There are various gotcha's.

To make life easier for you, this is the Google search that I performed so you can see for yourself; https://www.google.co.uk/#hl=en&safe...w=1354&bih=724

What can be covered?
From all of my careful searching and reading of each insurer's conditions of cover one thing stuck out - if you have bought your smartphone second hand, say from eBay, you cannot get cover from this lot. The same applies if your smartphone is either more than six or twelve months old (it varies).

For the life of me, I cannot see what difference it makes whether the device is new or second hand, it is still of an age and a value. But with insurers it is their train set and so they can call the shots.

Alternatives for cover?
Most of us have home and contents insurance and it is worth taking a look to see if your smartphone is already covered. It would be shame to end up paying double by taking out specific smartphone insurance. But if you do make a claim it will make it more expensive and/or difficult to get future home and contents insurance. Something to consider.

What to do?
Really, it is not easy to advise, there really is no one "best" solution. You really do have to consider your own personal circumstances. The only advise that I can offer is that you need to do your research very carefully, and take your time to find out what the cover is and whether or not it will suit your needs.

For sure, insuring your precious and expensive assets is not a simple process.

[Ben]

Nightmare. Fortunately when my iPhone 4 was stolen I had suitable home insurance, which paid me cash for the full amount of a brand new iPhone, less the excess.

At work we use protectyourbubble to cover some stuff, which only ensures a replacement, and if one isn't available then they may provide something of similar spec. It's not new for old.

I think the moral of the story is to have something that's appropriate for you. As you say, it's about each persons own circumstances. For some there will be a question as to whether to have gadget insurance at all. For others, it'll be the level of cover that's the sticking point.

[The Mullet of G]

I've never seen it as essential, but having only damaged 1 phone in the last decade and a bit and that was deliberate to an extent, I don't see it as being a good investment for me. For people who lose or damage phones a bit more regularly then it probably is more essential, personally though I'd wait until it happened then take out insurance and wait a few weeks or a month then claim, no point in paying for insurance until you actually need it.

[Ben]

You wouldn't really, of course, because that would be fraud, but I'm sure it has crossed a lot of people's minds and I'm sure it happens.

[The Mullet of G]

You wouldn't really, of course, because that would be fraud, but I'm sure it has crossed a lot of people's minds and I'm sure it happens.

It definitely happens I've witnessed it plenty of times. I guess it depends how you look at it, an insurance company getting one over on you is classed as good business, but if you get one over on them it's always fraud.

[Hands0n]

While I wouldn't for a moment defend the morals of the Insurance industry I also have a great deal of trouble with the proposition being put forward.

Having taken out insurance, and paid for it, I feel an entitlement to a suitable reimbursement should the worst happen. I have paid for a company to share some risk with me and I expect them to fulfil their part of the deal (thats another story BTW, there's a nasty development to my story above).

But for the life of me, I cannot think of a single justification for taking up the suggestion of posthumously taking out insurance and making a claim for an incident that occurred before an agreement of risk sharing had been in place. Forget illegal, it just feels completely morally wrong.

NB: My own case went bad - the travel insurance only offered compensation up to a maximum of £500 total, some £2,100 short of what has disappeared. As a package included with the "premium" bank account it turns out to be about as much worth as a chocolate tea pot. So we are turning to our household insurance that has the right amount of cover but that which we'd not wanted to use for loss during travel. When we travel in the new year we'll be sure to take out appropriate cover - and the premium bank account will be history.

[The Mullet of G]

Thats your issue right there, you let morals get in the way, do you think the insurance companies let morals get in the way?

As many people have found out to their cost insurance companies will do just about anything to avoid paying out, this is how they make money, they don't care about morals or your loss they only care about the bottom line, profit. Back in the day where you had an insurance guy, and your local bank manager knew your name there was a place for morals, as there was a level of trust and respect, but those days are long gone and if your still holding onto those morals then your probably being fleeced regularly.

I'm not saying that people should go out and commit fraud, I'm simply saying that its a possible option if you don't have any moral hangups. But think of it this way, if your insurance company refuses to pay out your legitimate claim, do you think they will feel bad about it when they are announcing they have made record profits for the year on the back of your misery?

[Hands0n]

LOL - I find it a bit amusing that having morals can be considered "having an issue".

I know exactly what the insurance industry, and many others, are all about. Generally they are vehicles purely there for shareholder profit. The actual business itself comes second place. The rule of finance is king, and nothing else matters. But nevertheless, a service is given, the policies are usually very loaded against the client, and there are all manner of get out clauses. In the older days they had Loss Adjusters who ruthlessly stripped away as much as they could of the claim. These folk no longer exist for the general public's insurance - there are tables and processes that have taken that place.

Of course it is a possible option to retrospectively take up insurance and make a claim as has been suggested. But, fundamentally, it is a dishonest option and, call me old fashioned if you like, I am just saying that I am not that person.

My misery? Well, two thoughts occur; 1) crap happens and 2) it could have been a lot worse, we were robbed while asleep in the room. All I lost was a pile of tech that can be replaced one way or another. The money? Worst case I can earn it again. Better would be that I get some compensation for my loss.

I don't want to appear sanctimonious - its just the way I was brought up and my belief system

But strictly back on topic - the point I wanted to make is that if you are going to put trust in insurance to cover you that you should really understand the limitations of the cover. On this rather rare occasion I took it on trust that the bank had selected a quality cover. The reality was quite a bit removed from that. More the fool me for not checking as I usually do. But then I also have back-up in the home contents cover that has sufficient money cover - what remains is that it is not a new for old policy. And my subsequent investigations are that new for old, particularly around mobile phones and portable gadgets, is also a thing of the past. That or extremely difficult to find, because I couldn't find a single new for old that was watertight. At the very best they were like leaky buckets - new for old, with a get out that allowed the insurer to pay what they considered "fair value" for the goods.

[The Mullet of G]

Having morals isn't an issue, but allowing yourself to be played because of your morals is.

When it comes to dealing with any company I don't think in terms of morals, honesty or right and wrong, there is no room for altruism or sense of duty or whatever other sentiment, as a result I'm rarely ever on the losing end of things, do I feel bad about it? I don't even think about it. I have extremely strong views about what is right and what is wrong and I too am old fashioned, but I choose not to apply those to business dealings as they have no place there, and the net result of that is as Charlie Sheen would say "I'm winning"

At this juncture I must make it clear that at no point have I ever commited insurance fraud or any other type of fraud, I'm simply saying that should the situation arise then I certainly wouldn't rule it out on moral grounds.

[Ben]

When it comes to dealing with any company

Businesses large and small are the fabric of society and the true and only creators of wealth in any economy. It's not 'us vs them'. Ok, so with insurance companies in particular it's very easy to think of them as a faceless corporation and that getting money out of them in any way possible is fair game. But it's just not.

[The Mullet of G]

Businesses large and small are the fabric of society and the true and only creators of wealth in any economy. It's not 'us vs them'. Ok, so with insurance companies in particular it's very easy to think of them as a faceless corporation and that getting money out of them in any way possible is fair game. But it's just not.

Not sure if you live in a utopia outside of reality, or your completely ignoring the events of the last 5 years and beyond, but if you want to use the "fabric of society" then most finance based companies are like dust mites feeding on that fabric. I realise that as a business owner you may see things differently, but why do you think we are currently in a global recession? I'll give you a clue - it wasn't because of my greed or because I was allowed to get out of control.

Our entire society is based on planned obsolescence and living on credit, you know the current system is broken beyond repair when the government is telling you to buy more stuff you don't need in a bid to prop up a broken system, thats exactly why we are in this mess in the first place.

Large business's that deal with insurance or finance are faceless entities who consider getting money out of you in any way possible to be fair game, if that wasn't the case then they wouldn't have been posting record profits every year until the bubble burst, or charging £40 for a failed direct debit.

Like I said before I'm not saying people should commit fraud or even try to screw money out of companies, what I am saying is large finance companies have been screwing us for years and I don't feel bad if the shoe is on the other foot for a change.

[Ben]

I think lumping consumer goods insurers in with the fact that we have a broken monetary system and banks that have gotten too big for their boots is a step too far... I know people are angry with the banks, they should be. They should also be angry with their government for being so dependent on the banks that they're powerless over them, and refusing to take control of the fiat currency (instead leaving it in the hands of bank lending to control). But using that as an excuse for vigilantism against an insurance company just adds another step to the spiral staircase of social deterioration that we've been facing for so many years now.

[Hands0n]

See, I think that there is a great danger in creating silos of people, classes, them vs us etc. A sense of entitlement develops and all of a sudden it isn't wrong to take from a faceless corporation, when in fact it really is. It all adds to the decay of society, individualism grows at the cost of social sense and responsibility. It is all the little things that add up to a broken society. Yes, of course, there have been horrendous errors made by successive governments over the past 40 or more years. Our overall lurch to the left has had a devastating effect across Europe. The finance industry at large has been responsible for removing massive amounts of cash out of the economy and trousering it safely in off-shore havens. Shareholder value has been the keyword, and remains so still. Finance has become king, nothing else matters.

But as for the insurance industry - they have always been gamblers, betting with our money, playing games with our risk. The place we find ourselves in right now is that insurance costs more than ever before for a fraction of what we may have received, for the price, before. It will continue to get worse.

[The Mullet of G]

If your worried about a "them vs us thing" then your probably a few hundreds years too late.

The problem I see in what you are saying, is that you are effectively saying its OK for faceless corporations to take relentlessly from individuals as that is socially responsible, but its wrong for the shoe to be on the other foot as that is classed as a broken society. I hope that individualism does grow at the cost of social sense and responsibility, maybe them we might move forward rather than continually trying to prop up a system that works for the few at the cost of the masses.

Insurance companies aren't gamblers, with the extremely fixed odds they have it would be classed as cheating in gambling circles. Insurance costs more now because of one simple factor and its the same one that brought our economy down "greed".

[Ben]

The problem I see in what you are saying, is that you are effectively saying its OK for faceless corporations to take relentlessly from individuals as that is socially responsible, but its wrong for the shoe to be on the other foot as that is classed as a broken society. I hope that individualism does grow at the cost of social sense and responsibility, maybe them we might move forward rather than continually trying to prop up a system that works for the few at the cost of the masses.

It IS wrong. If you don't want faceless corporations to take from you, don't deal with faceless corporations. There are still co-operatives out there, and organisations such as the John Lewis Partnership. You have a choice. The breakdown of society is partly a symptom of faceless corporations and big government. That can't be fixed by even more 'individualism'. It can be fixed by thinking more carefully about the ideologies of the corporations we spend with and the political parties we vote for.

[Hands0n]

Individualism "at the cost of social sense and responsibility" breeds chronic social decay, and is responsible for what we see today where people cross the road or step over to avoid helping and supporting others. Other nations manage quite well to have strong social ties across families and local societies for the betterment of each and every person within them. It is our, the West's, big loss that individualism is seen as the better way when it is clearly anything but.

I can't understand where you make the leap that you do - I do not support in any way any kind of disadvantaging of people. But if everyone is running around with the thought in their mind that they can reciprocate with some sense of equivalence then that is a ridiculous position to take. Anarchy is not the way forward, it leads to ruin.