Anyone who has bought a mobile-phone contract over the counter will recall the unrelenting pressure at point of sale to take out insurance. "Nice phone you've got there," the salesman might intone menacingly while chewing a ballpoint pen, "shame if anything happened to it." I'm violently allergic to parting with money without having the time to consider my options; I bought a cheap watch the other day and had to reject three attempts to get me to insure it against eventualities such as fire, landslip and terrorism. But if you turn down mobile insurance – particularly if you're buying a high-end handset – they look at you as if you've refused to don a spacesuit before going on a lunar mission.
But many people blithely accept, and this proves expensive. When I bought a T-Mobile G1 last year, I was offered insurance of £8.99 a month to cover a handset notionally worth £329. But a quick search online revealed companies that would insure a handset twice as expensive for about half that price. And in the end, my home-contents insurer let me add the phone to my policy on an all-risks basis for £14 – for a whole year. That's nearly an eighth of T-Mobile's quote.
According to James Parker, mobile manager at moneysupermarket.com, some 90 per cent of mobile insurance is taken out with the networks, and many people aren't aware that they may even be covered already by their bank in the terms of their current account. For some reason our bargain-hunting instincts evaporate, and that's partly why the scam uncovered last week (where new customers are called by insurance sellers posing as the networks) has been so successful. True, networks' policies may include extras such as paying out for fraudulent calls made between the time of theft and the moment you report it stolen, but that still doesn't explain their inflated prices.
Taking out insurance always involves an assessment of risk; if you're a serial phone-loser who has left handsets scattered around pubs the length and breadth of the land, it'll always make sense. Those of us who have never lost one, however, will essentially be subsidising phone-losers for a claim we may never make. But no one should pay over the odds – and this means not being bullied, and just spending 24 hours having a little shop around.
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