Is gadget insurance a rip-off?
Once upon a time it was just our wallets and keys that we needed when we left the house, today there's a good chance you've got a pricey smartphone in your pocket and a tablet or laptop in your bag.
Research from insurance company Esure even went as far as to suggest that the typical commuter carries more than £4,000 worth of gadgets in their bag made up of Blackberries, iphones, laptops, e-readers, ipads and other tablets.
This puts us all at an increased risk of theft, so what's the best way to insure your gadgets?
This growing risk has been spotted by specialist gadget insurers such as protectyourbubble.com, helpucover.co.uk and mygadgetbuddy.com, which have all begun offering standalone policies.
"Good standalone cover should protect gadget owners worldwide for theft, accidental damage, liquid damage, mechanical breakdown outside the manufacturer's warranty, loss, and unauthorised calls [should your phone be stolen]," says Stephen Ebbett, director of insurer Protect Your Bubble (PYB).
But you'll pay for the privilege. PYB will insure an iPhone 4s 16GB for £5.99 a month add an iPad 2 wi-fi 3G 32GB and you'll pay £10.78 and if you've also got a kindle Fire HD e-reader in your bundle of goodies, insurance will set you back £12.04 a month and that includes a 15% discount for insuring three gadgets. Typical of other standalone policies, while you'll be covered for theft or accidental damage, you won't automatically be covered for loss, despite it being listed by Ebbett as a key feature of good standalone cover.
If you want to add cover for loss to the above example, your PYB premium will rise to £15.44 a month - a loading of 28%. There's also a pretty hefty excess fee, with a charge of £75 levied on laptops and £50 for smartphone, iPad, tablet or iPhone claims. Loss claims incur a further £25 excess fee and international claims are subject to a £75 excess.
It's also worth bearing in mind that accidental damage claims made in the first three months from the policy start date incur an additional £25 excess charge and that if you pay your policy on a monthly basis, you are required to pay the remaining unpaid monthly payments before your claim will be agreed in full. Ouch.
However, the policy does cover your gadgets abroad (albeit for a single trip of up to 90 days in any 12-month period), but is that really enough of a redeeming feature and do standalone policies really offer value for money?
Ebbett says that standalone cover is better than the most common alternative of adding personal possessions cover to an existing home contents insurance policy.
"Most home insurers will require you to pay an additional premium for personal possessions cover and, if a claim is made, annual premiums may rise," he says. "Some insurers will also offer a no-claims discount, which will obviously be affected by any claims made."
But consumer champion, Which?, disagrees. A spokesman told Moneywise: "Instead of buying separate gadget insurance, it often works out cheaper to extend your home insurance to cover personal belongings away from home."
Research from gocompare.com reinforces this opinion. We asked the comparison website to crunch some numbers for us and it found that almost all policies (99%) on the market offer some form of personal possessions cover, either as standard or as an optional extra.
Based on a 27-year-old accountant living in a two-bedroom property in Bath, Gocompare looked at the annual policies available for contents insurance without personal possessions cover, as well as personal possessions cover up to £1,500 (that insures individual items under £1,000). The cheapest average quote returned for a policy without personal possessions cover was £54.57, while the average policy including the extra cover came in at £69.17.
That puts the average annual cost of adding personal possessions to your home contents policy at £14.60 a whopping £170 less than the cost of an annual bundle policy with Protect Your Bubble.
Some insurers will also continue this cover when you go on holiday – but check the terms of your policy first before you pack all of your gadgets.
This is more usually a feature of car insurance but it can also crop up in contents, mobile phone and pet insurance policies. An excess is the amount of money you have to pay before the insurance company starts paying out. The excess makes up the first part of a claim, so if your excess is £100 and your claim is for £500, you would pay the first £100 and the insurer the remaining £400. Many online insures let you set your own excess, but the lower the excess, the more expensive the premium will be.
Does exactly what it says on the tin: covers the contents of your home for theft and damage and also may insure certain possessions (jewellery, cycles) outside of the home. Things to watch for include the excess and also the maximum payout on individual items. Another grey area is kitchen fittings, as some contents policies say these are not contents but part of the fabric of the property and covered by buildings insurance and some buildings policies don’t cover them because they regard them as contents.