At a time when we are looking for ways to save money, many of us have been dumping our insurance products. But is it wise? Not all cover is created equal. Here we take a look at whether gadget insurance is worth holding on to?

Just under a third of people in the UK have cut back on insurance products over the last year, according to Deloitte. Life insurance, mobile cover and pet insurance were the most likely to be jettisoned with motor and home insurance the least likely.

Mobile phone or gadget insurance is perhaps more understandable. Three quarters of those who had it made no claims on it in a decade, according to consumer group Which, compared to just 17% making no claims on their pet insurance. 

So is there any value in having this type of cover? Our guide explains the ins and outs of gadget insurance so you can make an informed decision. We cover:

• What is gadget insurance and what does it protect?
• What are the different types of gadget insurance?
• How much does gadget insurance cost?
• Do I need gadget insurance? 
• How can I claim gadget insurance?

Read more: Is private health insurance worth it?

What is gadget insurance and what does it protect?

Gadget insurance provides cover for electronic devices such as mobile phones, laptops, tablets, smartwatches, music devices, cameras, eReaders, games consoles, sat navs, fitness trackers, wireless earbuds and even drones.

The latest phone and laptop models can cost thousands. An iPhone 15, for example, can cost up to £1,599, the latest Google Pixel 8 pro will set you back up to £1,179. An Apple Macbook Pro 16″, is up to a whopping £4,099.00. So insuring these expensive pieces of kit makes sense.

But unlike, say, car insurance which is a legal requirement, or the need for home insurance, especially if your home is prone to flooding, gadget insurance is optional.

What does gadget insurance typically cover?

Each policy will be different, but most insurers will cover you for:       

1. Theft. Gadgets can be expensive and therefore appealing to thieves so getting cover will protect you in case your gadget is stolen.
2. Loss. Misplacing a gadget whilst on the move happens so gadget insurance can protect you if you lose yours.
3. Accidental damage. If you drop your phone and end up with a cracked screen, accidental damage cover will help pay for a new one.
4. Mechanical failure. If your warranty runs out and your gadget dies, or if your device is damaged as a result of liquid, you’ll be protected.

“If you’re really concerned about being without your gadget for a long time, then making sure your policy includes ’48-hour guaranteed replacement’ is a good idea,” said Ceri McMillan of GoCompare.

Check the small print

It’s crucial that you check the small print of a policy thoroughly before you buy. The Financial Ombudsman Service often receives complaints from customers who expected a payout but were told that the policy doesn’t cover their situation.

In short, don’t assume you’ll be covered for everything, says Times Money Mentor’s consumer expert, Martyn James.

But he added that there are big things that you should look out for in a policy, including:

• What common accidents are covered, including the biggie for electronics: water damage
• How quickly you have to report theft to the police or notify the insurer of the incident
• The turnaround times for repairs and replacements
• The rules around how you secure your devices
• Do you need proof of purchase and in what form to claim – some policies won’t let you claim if the policy is still under warranty
• Are refurbished gadgets covered under the policy

“Also, often the replacement device given by the insurer is a refurbished phone, rather than a new one,” added Laura Suter head of personal finance at AJ Bell.

“You should double check the excess on the insurance too, as it could well be higher than you expect.” 

Read more: What can you do if your insurance claim is turned down?

What are the different types of gadget insurance? 

Family policy

You can get cover for multiple gadgets at the same time, including children’s tablets or game consoles. It might be the policy type to consider, especially if you are letting under-18s use your gadgets.

You will also only one set of monthly or annual payments, and one set of policy documents, to take care of.  Your insurance can cover your gadgets for accidental damage, theft, mechanical breakdown, and more. 

Multiple-gadget insurance

This might be an option for you should you want to insure more than one gadget, for example your laptop and mobile phone. Remember to check the maximum amount of gadgets you can have, as they can differ between policies.

It also may be a good idea to consider taking out several single-gadget insurance policies with the same insurance provider as they may offer a discount.  

Single-gadget insurance

This type of policy allows you to insure only one specific device. This is a good option when, say, your travel insurance falls short.

It can cost as little as a few pounds per month but the downside often is that many insurers will want you to sign up to a 12 month contract, which can push up the overall cost.

Pay-as-you-go

This type of policy is a flexible, rolling contract that can be as comprehensive as you want it to be.

It is popular with those need car insurance but don’t drive often enough to justify an annual policy.

How much does gadget insurance cost? 

“The cost of gadget insurance will vary depending on the gadget you are insuring,” said McMillan. “The make and model of the phone, the level of cover, extra features and the excess amount will make a difference.”

For example, an iPhone 14 128GB will set you back £7.13 a month on average for accidental damage, theft, loss and mechanical breakdown, according to ProtectYourGadget.com. There are savings to be made by paying annually: £75.94, meaning a save of £9.62.

An iPhone 14 Pro 256GB will cost you £9.88 on average for the same cover, with the option of saving £15.30 by paying £103.26 upfront for the year.

The high-end iPhone 14 Pro Max 256GB costs a heftier £10.16 for the same monthly cover, with the option of saving £16.80 by paying £105.12 upfront.

Read more: The new iPhone 15: how to get it cheaper and the best deals right now

Do I need gadget insurance? 

Firstly, ask yourself whether you could afford to replace your gadgets if something did happen to them. If not, that would certainly be a reason for needing insurance.

But there are ways your devices could already be covered. Other financial products might offer some protection, including: 

1. Home insurance: Contents insurance generally covers your possessions against incidents, such as theft, fire damage and flood damage
2. Credit card: If you bought your gadget with your credit card, it might be protected. Check your policy and remember to read the small print carefully
3. Bank account: Some bank accounts come with insurance as part of the package
4. Warranty: Most gadgets come with some warranty, but this typically covers mechanical breakdowns, rather than accidental damage or theft

Read more: How to limit the cost of storm and flood damage

Should I buy insurance when I buy my gadgets? 

If you want to be covered for loss and theft straight away then consider buying insurance when you buy the gadget.

However, there’s a reason to not buy insurance at the point of sale, said James.

“These policies tend to be overpriced and are impulse buys and it is likely that you could find a better deal.

“Best of all though, get a multiple gadget insurance policy for around £30 a month for five items, saving you hundreds.”

How can I claim gadget insurance? 

If your gadget has been stolen, you need to notify the police and get a crime reference number as soon as possible. Then you’ll need to contact your insurer to submit your claim at the earliest opportunity.

“You might not be able to claim if you leave your gadget in your car but not out of sight. It should be left in the boot or glove compartment.

“If you aren’t clear about the time or place you lost it, this could also impact your ability to make a claim,” explained McMillan.  

If your gadget has been broken, contact the insurer before attempting any repairs. You should check your policy documents, and have them to hand when you get in contact. You will most likely be asked to fill out a claim form, so try and gather as much information as possible about the damage.

“In both of these circumstances it is important to be aware of the excess amount included in your policy. If you make a claim, you will have to pay the excess amount, which will vary with each policy. So take this into consideration when purchasing gadget insurance,” said McMillan. 

Always keep receipts too as you will need proof of purchase for any successful claim.

How can I cancel gadget insurance?

If you need to cancel your insurance, contact your insurance provider.

But be aware that there may be a cancellation fee so check the wording of your policy before buying any policy.

Should I buy gadget insurance? The experts’ views

There are a couple of things to consider when weighing up gadget insurance, said David McDermottroe, insurance expert at comparison site MoneySuperMarket.

“First, consider how valuable your gadgets are and whether they are covered by your existing home insurance policy. You wouldn’t want to pay for insurance you don’t actually need.”

“However, the excess on your home policy could be nearly equal to the value of your gadget, making it pointless making a claim,” he added. “That could be a reason to consider standalone gadget cover.”

Limitations to home insurance

And there may be limitations even if some items are covered by your home insurance, said Martyn James.

“For example, taking the items outside of your home. Travel insurers have also got wise to the fact that we are often carrying around lots of expensive things nowadays.

“It’s possible for your hand luggage for a trip abroad with the family to have £5000 of kit or more inside, if you factor in two phones, a tablet, e-watch and laptop. So I recommend having gadget insurance for these pricey bits of tech.”

If you’re not already covered through your home insurance policy, adding extra cover is often cheaper than buying a separate gadget policy. 

“Most people don’t need gadget insurance as their items will usually be covered by their house insurance.

“And even if they did need it I’d suggest it should be the first one to ditch if they need to budget. Certainly rather than far more essential insurances like life, car, house, protection and so on,” said Suter.

You could self-insure

The alternative to having insurance is to self-insure. “This is when you set aside the equivalent amount of money that the gadget insurance would cost, to help pay for a new item.”

“After a couple of years you could easily have the value of the item saved,” said Suter.

Read more: Your rights: how travel insurance could catch you out