Device insurance: do you really need it?

       

Warren Peters

In today's technologically advanced era most people own some sort of device, the most common being mobile phones. Although there are many different gadgets out there serving different purposes, most devices today overlap in the services they offer. For example, mobile phones are no longer solely used as a means of communication. Many models today are so advanced that they can be used in place of a laptop.

Losing or damaging one's device can not only have a significant financial impact on the owner but can also result in other personal losses e.g. information and security loss. With this in mind it is imperative that we explore the idea of getting insurance to cover any potential losses. That way you won't eventually end up needing to take out a payday loan to replace lost or damaged devices.

What is device insurance?

As a starting point one needs to understand what device insurance is. Although it may seem self-explanatory, electronic device insurance is essentially a type of insurance that covers theft, damage and loss.


laptop with stethoscope

Some policies may also cover the following:

  • Water damage
  • Negligence
  • Cracked screens

You should be aware that the terms covered can vary between providers e.g. number of devices covered, the maximum amount covered, and the reasons covered for loss or damage. There is an abundance of cover options available in the UK market which can prove quite daunting for consumers. However, fear not as there are various comparison sites available that will make your decision process simpler.



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Insurance from manufacturers

One of the most common forms of insurance policies are those offered directly by manufacturers. You may find that manufacturers provide insurance packages on purchase. Insurance provided by manufacturers creates a greater sense of security, as when the purchased device malfunctions or is damaged, a guaranteed replacement will be provided to them if included in their insurance policy.

Carrier insurance

Major mobile network providers offer insurance packages to devices on their networks. This can be obtained by contacting your provider's customer service team. Devices do not necessarily have to be new or in mint condition. In many instances coverage will include theft, loss or damage to your device. Do not forget to compare coverage costs with that offered by your device's manufacturer and any third parties.


cracked smartphone on ground

Third party insurance

Also available are third party insurance policies and companies, these include any service providers that are not your device manufacturer or network provider. As with carriers insurance and manufacturers insurance, coverage may range from physical damages and technical malfunctions to theft and loss. Ensure you check what you may claim, for how much and what the minimum term offered under these policies are. Comparison websites should have a list of such firms and their policies. It may be the case that these third parties offer a more competitive price than your current network provider or device manufacturer.

Choosing the best insurance for your needs

If you do decide to go ahead with insuring your devices, in order to save yourself from needing a payday loan, make sure you choose the policy that is best tailored to your needs and device. Below are a few suggestions and tips that may help in your decision making.

The first step is to decide what type of coverage and insurer you will need. Ask yourself whether the average insurance provider covers the risks that you are most prone to. This should help narrow down your search focus immensely. Once these are answered move on to searching for the appropriate insurance provider.

Once you have identified your coverage needs, it is time to shop around. Factor in costs (both on purchase and post purchase of policy; as some may have additional future charges linked to policy), minimum coverage periods (how long your devices are covered for under said policy), and what exactly is included or not included in packages (does this policy include damaged, lost or stolen cover). Checking online search engines and comparison sites should help simplify this. You can also contact your network service provider and device manufacturer for additional information if unavailable online.

It never hurts to negotiate your way to a better deal. Slap on your 'grafting' hat and inform providers what your budget is then ask if a suitable package is available within your price range. In doing so, you may find that you end up getting a plan for much less than you thought you would have otherwise paid. Think economically to get the best cover at the right price.

Do not forget to ask your friends and relatives if they have an insured device and who their provider is. Skim through company or policy reviews and online blogs about insurers to gather as much information as you can on providers. Word of mouth is one if the biggest marketing tools, use this when on the hunt for device insurance, you never know you might pick up some additional tips or even find the best option for you this way.

Another important factor to consider when choosing device insurance is to know what your budget is. Draw up a budget, or if you already have one, refer to it and figure out how much you can afford to spare on your device's insurance. This will help you filter out the more expensive plans and focus on the ones that fit within your present budget.

One final tip for choosing device insurance is to review terms and conditions. This is crucial as you need to know how long your coverage lasts, what additional or unanticipated charges may be incurred and under what conditions your device may not be covered. You may also be informed of the time-frame required to replace or repair devices. Reading the fine print is important as it may save you from further disappointments in the long run and help to further create a sense of security.

You should be aware that many customers share horror stories about their claims being rejected by insurers or not getting the payout they need in times of crises. With that being said, ensure that the insurance provider you choose has a good track record. You can also always use free insurance complaint tools if it happens that you're dissatisfied with their services and need somewhere or someone to complain to.

Monthly fee vs. one-off cost

For those avoiding long-term payment plans, you may prefer to pay the initial one-off fixed price. This payment should typically help with coverage for an extended period, usually no shorter than a year, depending on the service provider. However, as this is a lump sum you may not have the funds available at that time. Be realistic about what you can commit to and let that steer you in the right direction.

Also, note that if you choose to pay incrementally or in instalments, some providers may request that the remainder of the premium be paid in full before any claim will be settled so do keep this in mind. As mentioned earlier, pay attention to the fine print so that you are confident that in the case of an emergency your insurer has you covered, and a replacement or repair can be issued on request.

Multi-device policies

If you have more than one device you need insured, it may prove to be that multi-device policies are your best option. This is because you may end up getting a more economical deal than you would if you got insurance for each one individually. It also means you will not be liaising with various insurance companies to ensure your claim is handled. This is also a perfect idea if you want to include your family or friends in the plan as well as household gadgets too.

Fix it yourself

Another option, if you find device insurance isn't for you, is to fix it yourself in case of damages. This could cost varying amounts depending on the extent of the damage and where you fix it. Be wary that a certain level of technical ability is necessary to safely and congruously repair electronic devices, ensure you are able to do so yourself, if not consult the many electronic device repairers on your local high street for a professional finish.

If you'd rather take the risk and ditch the insurance this is a viable option that could end up saving you money. However, in the case that your device is lost, there isn't much that you will be able to do apart from reporting it stolen to your local authorities and hoping that someone turns it in. Thus, an insurance policy might be suitable if you are prone to losing or having your device stolen.

Saving money

Some people are caught between whether or not they need to get device insurance, typically being put off by the prospect of paying for a service that may never be used. It is somewhat near impossible to predict when or how your device could be damaged, destroyed, stolen or lost. Without insurance you could end up spending more than you ever anticipated. If you do have a history of damaging or losing devices getting insurance may be your best option.

Before getting an insurance policy set up, check if you have any existing claim through home or property insurance just to make sure you aren't wasting money and time on a new policy. Also check if you already have an insurance policy with your existing network provider or device manufacturer.

Conclusion

Device insurance isn't for everyone but it can help create a level of security. However, before going ahead to get insurance, make sure you look out for the best deals and be absolutely certain of what you really need and do not need. By taking the time to find the best plan, you should find that you won't need to take out an online loan.