Were you shocked when you found out how much money your phone network provider was asking from you each month just to insure your iPhone?
Nearly £15 per month, are they mad? That would mean that over an average 2 year contract, the total you would have paid for insurance would have amounted to around 72% of the cost of a brand new iPhone direct from the Apple store, and that is without and excess fee that you have to pay!
Check out the latest price direct from The Apple Store
(Calculation based upon the cost of an iPhone 4S at the time this article was published [may 2012] was one pound short of £500 and 24 monthly insurance premiums of £15 per month= £360. The £360 amounts to 72% of the cost of the Apple iPhone at this time).
- Why is iPhone Insurance So Expensive
- Are You Prepared to Pay That Much
- Are There Other Options to Protect Your iPhone
- What About Bank Account Insurance Options
- What About Home Content Cover for The iPhone
- Is Self Insurance an Option for Me and How Do I Do That?
Why is the insurance for your iPhone so expensive? To be honest we are not one hundred present sure, so we can not give you a definitive answer, but we could speculate on several reasons.
1) The insurance provided from mobile phone operators is not their own insurance policy, it is just branded with their name. It is almost always provided by a 3rd party insurance company, so both the phone network and the insurance company will want to make a reasonable profit from every policy sold.
2) As you already know the iPhone is probably the most expensive handset around, also with regular model updates and longer 24 month contracts, insurance fraud for the iPhone is unfortunately quite high, which in turn pushes up the cost of the protection premium.
3) When you purchase/agree to your phone contract you are in the perfect position for the phone companies to upsell you on their phone insurance. They have all your details and all the details of your new phone and contract details, all you need to do from their point of view is to say yes!
Are You Prepared to Pay That Much? At a guess it would be reasonable to assume you are not happy paying over the top to protect your iPhone or you would not be reading this information. Form a personal point of view and at the time of writing this, I would not be happy to pay these high premiums just so the policy had my network providers logo on the top of the policy documents.
Are There Other Options to Protect Your iPhone? Yes, there are several options open to you that can help, lets take a quick look at them below:
1) Compare iphone insurance on the internet and see how much companies that are independent of the phone providers are charging, you will most likely be surprised to read that you can quite easily half the cost of your handset supplier this way. Please make sure you check the terms and conditions so you know exactly what is covered by the 3rd party company, as some do not include loss or international cover in their plans.
2) Protect you iphone within your home contents insurance plan, we talk about this in more detail below.
3) Premium or upgraded bank accounts insurance cover for your 4S. Again, we talk more about this a little further down the page.
4) Self-insurance is talked about on some chat forums, but is it really a good alternative to an insurance policy?
This depends on your personal preference, financial situation and your disciplines when it comes to looking after your financial affairs. Self-insurance is basically a method where by you set aside some money on a regular basis as an emergency fund in case something happens to your Apple handset in the future, such as it is lost or stolen, even flushed down the toilet! Don’t laugh here, this happens far more than you would imagine!
It could be a good idea here to set up a regular standing order from your bank account for £15 a month if you can afford it to a special savings account, just for this self-insurance fund.
If after 24 months nothing has happened to your iPhone and you have saved every month, you will now around £360 better off, as that money will be in your savings account, rather than in an insurance providers bank account!
If something happened to your iPhone before you have saved the full replacement cost, you can always buy a second hand iPhone from ebay, or, you could always purchase another brand of phone as an emergency. Cheap basic mobiles can be purchased new for under £25.
2 Top Tips:
A) If you damage your iPhone, always contact Apple first, as their repairs are superior and you may well be surprised at the price as well, their repairs can be cheaper than some market traders using fake components.
B) If after 36 months of you contract you lost or had your iPhone stolen, you may be able to talk your network provider into providing you with another free handset, in exchange for agreeing to another 24 month contract. Always ask them first before spending your savings!
If you think you cannot handle life without your iPhone and do not have the funds to purchase a new iPhone outright, then self-insurance may not be the right approach for you and you may want to consider another option.
Premium Bank Account Insurance Options:
Some of the High Street Banks offer free phone insurance to subscribers of their premium bank accounts, this could be a great option for some but not for others and really depends on your personal preferences and who you bank with, as some banks mobile phone insurance seems to be better than others.
The plus side. If you are already a premium bank account holder than you will want to take a closer look at this before looking at other protection options for your Apple iPhone.
You may want to check the maximum handset value that they will insure, as it is reported that some banks upper handset limit is not sufficient to replace higher value handsets such as Apples. Also check out the excess fee should you need to make a claim, along with the items that are protected, such as theft, loss, water/liquid damage, accidental damage and if you travel a lot, that international cover is included.
Finally, check out how long the claims procedure is so you know how long you could be without your handset for in the event of a claim, as it is noted on some forums that different banks vary in their replacement time scales.
Home Contents Insurance For The iPhone:
Some people recommend that you insure your iPhone by means of including it on your home contents insurance policy as an extra item of value. As home insurance policies vary drastically it makes it very hard to say that this may or may not a good option, it really is down to the individual to do due diligence by contacting the home insurance provider and getting some written information on how this might affect you.
Important things to check before insuring your iPhone on your home contents insurance:
What is the excess fee if a claim is made? –Beware that home insurance excess fees vary and may be high in relation to a claim for an iPhone.
Will the no claims bonus for the home insurance be lost if a claim for an phone is made? –If 5 years of no claims bonus was lost, the next 3-5 years premiums may rise to a level well above the cost of a replacement handset, which could make this an extremely expensive way to get iphone insurance.
Also check the maximum handset value and exactly what is covered, theft, loss, water/accidental damage and international cover, so you can be sure the cover meets your needs.
Finally, ask how quickly your home contents cover will replace your handset if you make a claim, as you do not want to be waiting weeks for the claim to be processed.
One final tip for your iphone. If possible, choose a good quality case to help protect it from everyday mishaps, such as falling out of your pocket or bag. You will be supprised just how much protection a good case will provide your handset and help you avoid the need to make a claim for accidental damage to your favourite handset. Great iphone cases can be found on sites like Amazon or get one direct from the Apple store.