Gadget insurance – bang for your buck?

January 18, 2024

You may have received a shiny new smartphone for Christmas or treated yourself to a flashy fitness tracker with those new year intentions in mind! Chances are, you’re weighing up whether it’s worth taking out insurance on your new device.

Many of us hesitate when asked to add insurance due to concerns around cost and what’s involved. It’s all too easy to agree to an insurance policy at the sales counter without fully understanding what you’re paying for. Here’s a guide to the main things to consider when deciding on gadget insurance.

What gadget insurance is

Gadget insurance is extra cover you buy to protect your device in certain circumstances. As we rely more than ever before on electronic/digital devices, gadget insurance offers extra protection if something unexpected happens.

Gadget insurance typically covers loss, theft or damage to your device. The intention is to put you in the same position you were in before the incident with your device happened. For example, your smartwatch screen gets accidently smashed so your insurer replaces the screen.

Read any policy carefully

Make sure to read through all the terms and conditions of any policy. These set out your level of cover as well as what might be excluded. If for example, you own a laptop, smartphone and camera, a multi-gadget policy can be cheaper than a separate policy for each. Check too for worldwide travel cover.

Top Tip

Gadgets decrease in value the longer you own them. You should reduce the level of cover each year, or cancel the policy altogether if the cost of the insurance becomes greater than the value of the device.

Your consumer rights

It’s important to remember that your consumer rights remain the same whether you choose to buy insurance for your electronic device or not. Gadget insurance is always an extra. If the phone or smartwatch becomes faulty, you are entitled to return it and seek redress. You do not need insurance to get redress for a faulty product.

Check your existing policies

Your new device may already be covered by any existing insurance policy you have. For example, a house or contents policy. If covered under your existing house insurance policy, check your excess. The excess is the amount you pay towards any claim before your insurer pays the balance. You cannot claim for less than the excess.

The excess could be higher than the actual cost of the new device so it’s important you know what it is. You need to be sure your device is actually worth insuring! If not already covered, ask your insurer if there’s an option to add your electronic items to your existing home or contents insurance policy too.

Our Money Hub has further information on gadget insurance.

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