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Is it better to insure your gadgets on your home insurance or take out gadget cover?

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If you have lots of gadgets you may be tempted to take out gadget insurance. Or, perhaps you’d rather save money by insuring them on your home insurance. Are there any downsides?

Insuring your gadgets through home insurance

Depending on the insurer you’re with and whether you opt for ‘budget’ cover or a more expensive policy, most contents insurance will cover gadgets you own, such as a laptop, tablet and mobile phone. There are several parts of the policy that can cover your gadget(s).

1. Accidental damage cover – this is something you may have to pay extra for. It does what it says on the tin and will cover your gadgets if you damage them accidentally.

2. Cover for possessions while they are away from your home – this may also cost extra. It’s not the same as travel insurance as it normally only covers your gadgets while they’re away from your home in the UK.

3. Specific item cover – this is useful if you have expensive items costing more than, say, £2,000. In order to use this cover, you’re normally required to specify the make and model of the item (if relevant) and/or have receipts or photos to show you owned it.

Gadget insurance

You can buy separate gadget cover from several different sources:

1. A specialist insurer. Several insurance companies offer gadget insurance that will protect one or several mobile phones, tablet computers, laptops etc. Expect to pay £2.50 a month or more for laptop insurance and £4 – £6 a month for iPhone insurance, depending on the model.

SAVVY TIP: Companies that offer this insurance include Love it cover it, Protectyourbubble, Insurance2go.co.uk, Switchedoninsurance.co.uk, Helpucover.co.uk and gadgetbuddy.com. I don’t know anyone who has policies with any of these companies, so can’t vouch for their exclusions or how they handle claims.

2. Your bank. If you pay for a premium account (otherwise called a ‘packaged account’), you may be offered gadget insurance as part of the deal.

3. The retailer or manufacturer you buy the gadget from. Mobile phone retailers, manufacturers and network providers often offer mobile phone insurance.

What to look for

Whether you’re buying separate gadget insurance or adding the cover onto your household policy, it’s worth checking exactly what you’ll be covered for. It sounds obvious, but cover can vary widely, particularly around what counts as theft and whether calls made by someone who steals your mobile will be covered.

Look for:

1. The deferred period, which is how long you have to have the policy before you can make your first claim. This may be 14 days.

2. The age of the gadgets. Some policies won’t insure anything that’s older than three years old when you first take out the insurance.

3. How your claim will be paid. Some policies will only pay the price of the item at the time you bought it, rather than the new replacement price. This isn’t so much of a problem with gadgets as prices have been falling for quite a few years, but it’s worth being aware of.

3. Limits on the cost of unauthorised calls made on your mobile after it’s been stolen or lost. Policies may not cover the cost of mobile calls if you don’t report your phone lost or stolen to the police or mobile phone company within 24 hours. This is less of a problem now that the major mobile phone companies have limited the amount you’ll have to pay for unauthorised calls to £100. However, there are some terms and conditions you have to meet to qualify for this cap.

4. The level of the excess. This is the first part of any claim you have to pay.

5. The maximum amount the company will pay out for each claim. This could be as low as £1,500, which may not be much use if you lose several gadgets at once.

6. Theft exclusions. If your laptop is stolen from your car, for example, it may not be covered if it’s not locked away in the boot. Some policies state that alarm systems must be activated as well.

SAVVY TIP: Some policies say they won’t pay out for theft from a building unless forced entry has been used.

7. The limit on the number of claims you can make in a year.

Pros and cons of household versus gadget cover

If you’re the kind of person who tends to lose or damage things, you’re probably better off buying separate gadget cover. The reason is that if you make a relatively low value claim against your household insurance, you will lose your no claims bonus, which could mean your insurance costs rise significantly. Even if you don’t have much of a no claims bonus, your premiums could go up after you’ve claimed.

Graham Trudgill of BIBA (the insurance brokers’ organisation) has these tips:

1. You may have a higher excess on your household insurance than you’d get on gadget cover.

2. If you lose a mobile phone, your household insurance will cover you for the cost of a replacement phone, but not for the cost of any unauthorised calls.

3. Talk to a broker about gadget insurance as some are quite restrictive when it comes to what counts as ‘theft’. You can visit BIBA’s website where there’s a find a broker section, call 0370 9501790 or download its ‘find a broker’ app.

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