7 Myths About Phone Insurance

Wherever we go, our smartphones come with us. The average person in Germany spends over three hours a day using a smartphone. It’s therefore no surprise that many people want to protect their device as well as they can. However, phone insurance does not cover all kinds of damage and loss. We’ve made a list of the seven most common myths about mobile phone insurance.

Myth 1: Phone insurance pays for repairs to a scratched display.

In general, insurers only pay out if the insured phone is so badly damaged that it no longer functions as it should. Accidental damage caused by dropping your phone, liquid damage, short circuits and lightning strike damage are covered by most policies. Scratches and general wear and tear are considered cosmetic damage and are not covered.

Myth 2: Phone insurance covers all kinds of liquid damage.

There are many kinds of liquid and moisture damage. In these cases, insurers are very particular, and most policies come with a long list of exceptions and limitations. Damage caused by a burst mains water pipe is almost always covered – but this kind of damage is extremely rare. If you accidentally jump in a swimming pool with your phone or drop it in the bath, your insurer won’t always pay. The same applies if you spill a drink on your phone or if it gets soaked by rain. You should check the details of your policy to see whether you are covered.

Myth 3: Phone insurance covers pickpocketing.

This is another case where you should read the smallprint. If your phone is stolen from you by force, then you are usually covered. But if your phone was simply pickpocketed, you will not always be covered. Pickpocketing is only covered by more expensive policies or as an optional add-on. Even then, the insurer will only pay out if you did not leave your phone unattended and kept it as close to your body as possible. If your phone was in a side pocket of your rucksack, an outer pocket of your coat, or in an unlocked changing room, most insurers will refuse to pay as you did not take enough care to prevent the theft.

Myth 4: Phone insurance covers you if you lose your phone.

If you leave your phone in a cafe, on the train, or it simply falls out of your pocket, then you will have to cover the costs yourself. Even policies with comprehensive protection against theft exclude this kind of loss in the terms and conditions of your contract.

Myth 5: You will get a new phone if you make a claim.

If the event of a claim, insurers will first try to restore your phone to full functionality and cover the costs of doing this. So in most cases, the first action is to try to repair the damage. You will only receive a new device if a repair is not possible or not viable. In some cases, the insurer will give you a replacement of equal value, which might even be a used or restored phone.

Myth 6: In the event of a claim, I will receive the full purchase price of my device.

The vast majority of phone insurance policies are based on replacement value. This means that the insurer will only pay for the current value of the phone and not the purchase price. After one year, a phone’s value drops to just 50 to 80 percent of the original price. Most insurers will only reimburse you the full price if a claim is made within the first few months after purchase. After this time, they will only pay the current replacement value.

The vast majority of phone insurance policies are based on replacement value.

Myth 7: Older phones can still be insured.

Most insurers only insure devices that are less than three months old. There are a few exceptions who will insure devices up to 24 months old. However, in such cases, you are only covered for the replacement value of the phone. In most cases, this is not worthwhile. So if you are thinking of buying phone insurance, you should do so within the first four weeks after your purchase.

The vast majority of phone insurance policies are based on replacement value.

Time to test your knowledge!

Now that you’re informed about mobile phone insurance, it’s time to put your new knowledge to the test. Simply answer the four questions in this quiz to enter a prize draw. You have the chance to win an iPhone 11 Pro (256 GB) or one of twenty €20 Amazon vouchers. Please take a moment to read the terms and conditions of participation here.