Consumer watchdog ‘Which?’ challenges mobile phone insurance products

With smartphones becoming increasingly popular, consideration of ‘gadget’ insurance is becoming pertinent to more consumers as the replacement value is much higher than that of original mobile phones.

Products offered on the market traditionally consist of insurance offered at the point of purchase, as part of a special deal with, for example high street banks or as an endorsement on household policies. More recently, on-line products have sprung up offering specialized insurance to a potential market audience who prefer to ‘shop’ in this way.

Whilst the mobile phone insurance market would argue that its products offer value for money and a specialized service, they have being against recent criticism from consumer groups and the ombudsman. ‘The Post’ reports that the Financial Ombudsman Service (FOS) has seen an increase in specialist insurance complaints – 1791 formal complaints last year — a 66% increase on 1076 the previous year. The FOS attributes around half of these specialized insurance complaints to mobile phones.

According to consumer group Which? the best value is that offered as a typical endorsement to household insurance by adding to personal possessions outside the home to contents insurance. It is important to consider other factors however when reviewing mobile phone insurance. For example, loss/theft is a frequent occurrence which could impact household premiums.