Phone Insurance

Get iPhone and Samsung cover for less than $12 per month

Updated 6 February 2019

Summary

Phone insurance is growing in popularity in New Zealand and is designed to protect your phone if it is accidentally damaged, lost or stolen. Policies also provide protection for accidental damage, theft and faults after the manufacturer warranty period has ended.
Whether or not phone insurance offers value-for-money comes down to the value of your phone and how accident-prone you are. If you break it or have it stolen, insurers offer coverage from around $12 a month with some hefty excesses on top of that.
Our guide to phone insurance explains the pros, cons and what to watch out for. We compare policies from Spark, Vodafone and Cove who are the current providers.

Our guide covers:

Why buy phone insurance?

Phone insurance protects you from paying for an existing phone contract and a new phone if your phone is lost or stolen.
If your phone is out of warranty, phone insurance can cover the cost of any repairs should it develop a fault later.
Third-party phone insurance policies, such as those offered by Cove Insurance, can sometimes work out to be cheaper than the insurance cover quoted by Spark and Vodafone when taking into account the policies, as described on our Phone Insurance Policy Comparison below.
You might be covered by your home and/or contents insurance – check your policy or read our guide to contents insurance

What does phone insurance cover?

If you’ve owned a phone before, you will probably know that almost anything can happen to it. Depending on the policy, you may be able to claim for:

A lost phone: i.e. if you accidentally leave your phone somewhere and can’t retrieve it, phone insurance may cover you and provide you with a similar model to the one you lost.
A cracked screen: i.e. the costs of repairing or replacing a cracked phone screen and any other related repairs.
Water damage: i.e. accidental liquid damage if your phone has fallen in water or been splashed or soaked.
Battery replacement: i.e. if your battery stops working, you could claim for a replacement battery
Theft cover: i.e. if someone steals your phone, you could claim for a replacement phone that is a similar model.
Fraudulent activity costs: i.e. if a thief uses your stolen phone to make calls and/or use data
Cost of hiring a temporary mobile device: i.e. if your mobile device is lost or stolen while you’re overseas (but you’ll need to keep the receipts)
Overseas cover: i.e. if you go overseas and your phone is damaged, lost or stolen

Know This: Spark, Vodafone and Cove Insurance offer different policies
Your cover will depend on who you insure with any additional insurance you select. To make sure you know exactly what you’re covered for, it is essential to read the policy documents carefully before taking out insurance with your chosen provider. Cove Insurance allows you to insure any phone from any network, whereas Spark's phone insurance won't cover Vodafone phones, and vice versa.

Warning: Phone insurance generally has many exclusions as to what it covers.
Buying phone insurance is easy, but claiming on it may not be. The fine print of each policy explains what won't be covered, which are usually things like:

A phone which does not have your sim card in it when a claim arises (for Vodafone and Spark)
Loss, theft or damage caused by or arising from any modification or repair not carried out by an authorised repairer (i.e. in the case of Vodafone or Spark policies)
Loss, theft or damage caused by or arising from fire.
Loss, theft or damage if you didn't take 'reasonable care' to prevent the incident
Loss if you leave your phone unattended (i.e. out of your sight, possession or control) in a public place; or your workplace, any vehicle, aircraft or boat), or in an unlocked car
Loss or theft where you leave your phone in an unknown location or if you forget where it is
Damage caused by any content (i.e. downloads)
Manufacturing faults, wear and tear, gradual deterioration, slowly developing flaws, corrosion or latent defect, or damage caused by dampness of the atmosphere or by normal variations in atmospheric temperature;
Damage du to failure to follow the manufacturer’s instructions; or use accessories or software not approved by the manufacturer; incorrect connections of signal leads/power supply, power surge, or a virus
If the incident occurred after it was given, lent or sold to anyone other than you
Any manufacturer defects or a recall of the phone
Minor cosmetic damage like scratches that do not affect the phone performance or safety
A lost sim card
Any damage where the damaged phone isn’t handed in for repair
If you intentionally or maliciously damage your phone
If you know who has caused the incident but refuse to tell the insurer who this person is

10 Phone Insurance 'Must Knows'

Check your phone can be covered before you take out insurance

Some phones may not be covered, or not eligible depending on its history. Before you take out any phone insurance policy, it is a good idea to check:

Whether your phone was bought directly from Spark, Vodafone or 2Degrees, a mobile phone retailer or certified online retailer, and not second-hand from Trade Me or an overseas online auction website.
Whether your device is already damaged (even small cosmetic hairline cracks can grow into more significant problems)
How old the phone is
Whether you have proof of purchase

When you buy phone insurance, you will need to confirm that the information you provide is correct and true. If there are any incorrect details, the insurer could decide to deny a claim later on.

You're six times more likely to damage the phone than have it stolen

Phone insurance is not cheap when you consider the number of exclusions and monthly costs. We believe there is a lot of profit to be made from phone insurance when sold by a retailer, so we suggest not instantly saying "yes" to the quote they give you.

Unless you completely break the phone, the cost of repairs are a lot less than you may think. You can also get it fixed within an hour or same-day, whereas with phone insurance you will be given a standard waiting time which can be up to two weeks.

If you don't want to take the risk of breaking your phone, our Phone Insurance Policy Comparison sets out what the benefits and costs are.

Do you have a habit of losing or damaging phones?

Phone insurance isn't compulsory, so it's worth asking yourself how likely you are to lose or damage your phone. If you haven't had any issues with other phones over the years, you're more likely to be low-risk and in less need of a phone insurance policy. On the other hand, if you continuously find yourself with a broken or damaged phone, it may be an idea to look at phone insurance. The decision will come down to the cost and whether or not you are happy to take a risk.

Frequent phone insurance claims usually lead to higher excess charges

Unlike most insurance, phone insurance is usually a fixed-price policy no matter what your claim history is. While this gives you the certainty of ongoing costs, there are usually restrictions on how often you can claim, and may cancel or stop you from renewing your insurance if you have claimed more than it permits.

Specifically:

Vodafone has an excess of $200 for your first claim, or $250 for a second claim within 12 months (where a phone is valued below $1,801). If the phone's value is $1801-$2,100, the first claim excess is $350 and the second claim excess within 12 months is $400. Vodafone's insurer also has the right to review your policy "if you make two claims within any 12 month period" and can decide not to renew your policy.
Spark has an excess of $195 per claim, with a limit of three claims per year. After the third claim, Spark will cancel your policy.
Cove has a standard excess of $200 per claim, with no caps or limits on how many times you can claim. You can pay less monthly and agree to a $400 excess, or pay more for a $100 excess.

Phone insurance is all about whether you can afford a total loss of the phone

If you have a 'low-value' phone, i.e. under $500, phone insurance probably isn't going to be cost effective - you will pay around $400 over two years, even if you don't claim. However, if you own a new phone, i.e. a $1,900 iPhone or $1,700 Samsung, ask yourself - can you afford to buy another one if you lose to break it? If the answer is no, then paying around $12 to $16 for phone insurance may be cost-effective. In such cases, the $150 or $200 excess will most likely be cheaper than paying for repairs on a brand new phone with a third party.

Owning a phone is expensive, but having an expensive phone destroyed or stolen with insurance means a difference of $200 for an excess fee or a $1,800+ loss.

Leave your phone on a plane or at the beach and you WON'T be covered

Leaving a phone unattended anywhere is a big no-no when it comes to phone insurance. Quite simply, you won't be covered. There are no exceptions - if you've left it in "in any public place" or
"your workplace, any (public) vehicle or aircraft" then you are not covered. This means if you leave it on a bus or plane, or anywhere you're not present, you won't be able to claim for the loss.

There is one exception - an optional add-on currently offered only by Cove Insurance which covers loss of your phone. We explain this in the point below.

Only Cove Insurance offers additional cover for excess-free damage and loss

Spark and Vodafone will charge you the standard excess for any minor damage if you decide to make a claim. However, Cove Insurance offers cover 'upgrades' on its standard monthly cost. These include:

$2/month for excess-free screen damage - any accident, big or small, can be covered without having to pay the standard $200 excess charge.
$3/month to cover losing your phone - this means if you leave it on a plane, at a cafe or anywhere, you can make a claim.

Spark and Vodafone will cover your phone if you're overseas

As long as you're outside of New Zealand on a non-permanent basis (i.e. have a return ticket home), you will be covered exactly the same as if you were in New Zealand. Cove Insurance does not offer this protection.

The annual cost of a phone insurance policy adds up

Monthly policies look reasonable, between $12 and $16, but over one year that adds up to between $144 and $192, and if you make a claim, you're looking at around $200 for the excess per claim. When you compare it to the cost of repairs (see the point below), it may work out to be more cost effective to 'self-insure', i.e. put aside money for repairs as you need them.

Repairing a screen or water-damaged phone with a trusted repairs technician will often be cheaper than phone insurance

To compare the annual insurance cost with the price of repairs, we estimate that standard phone insurance with one claim will cost around $350 to $400 including the excess. In comparison, TechnoFIX offers iPhone 7 and Samsung screen repairs from $119 and water damage repairs from $99, which includes a same-day service. Our view is that if you drop your phone twice a year, you'll pay around $600 in insurance and excesses, or as little as ~$240 if you pay for the repairs yourself.

iPhone 7

Screen Replacement - $119
Battery Replacement - $99
Diagnostic Check - $29
Speaker Replacement - $99
Back Body Replacement - $189
Power Button Repair - $129

Samsung Galaxy

S4 Screen Replacement -$149
S5 Screen Replacement - $159
S6 Screen Replacement - $239
S7 Screen Replacement - $269
S8 Screen Replacement - $479
Water Damage Repair - $99

Prices correct as of 6 February 2019

Phone Insurance Policy Comparison

Spark, Vodafone and Cove Insurance are currently the only companies to offer phone insurance. 2 Degrees does not offer phone insurance and has no plans to introduce it. Many people sign up for phone insurance when they buy a new phone, but you can usually get a policy with an existing phone if you think that's right for you later on.

Insurer	Monthly Cost	Excess***	Worldwide Cover?	Unauthorised Costs?
Spark (Download Policy)	$11.95* or $15.95*	$150 or $195	Yes	Up to $1,000
Vodafone (Download Policy)	$15.50	$195 or $350	Yes	Up to $1,000
Cove Insurance (Download Policy)	$14.61**	$200	No	Up to $1,000

*Spark's monthly cost:
$11.95 for phones with a recommended retail price (RRP) of below $800, and $15.95 for any phone with an RRP above $800.
**Cove's monthly cost:
Cove Insurance offers cover upgrades, including a $2/month for excess-free screen damage, and $3/month to cover losing your phone
***Excess details:

Spark has an excess of $150 for phones with a recommended retail price (RRP) of below $800, and $195 per claim for any phone with an RRP above $800. There is a limit of three claims per year. After the third claim, Spark will cancel your policy.
Vodafone has an excess of $200 for your first claim, or $250 for a second claim within 12 months (where a phone is valued below $1,801) or $350/$400 if the phone's value is $1801-$2,100.
Cove has an excess of $200 per claim, with no caps or limits on how many times you can claim. You can pay less monthly and agree to a $400 excess, or pay more for a $100 excess.

Unauthorised Costs: These include data costs, app costs, phone calls and other related expenses incurred by a third party if your phone is stolen

Phone Insurance FAQs

What happens if I don't have phone insurance?

It depends on the issue with your phone. If you believe there is a fault due to a manufacturing problem, you will need to check your manufacturer's warranty first to see if it’ll cover the cost of repairs. If the warranty has expired, you can ask for a quote for out-of-warranty repairs with the retailer or manufacturer. Alternatively, you can take it to any phone shop to see if they can help.

However, if you have damaged, lost or had your phone stolen and don't have insurance, you are on your own and will have to repair or replace the phone at your own expense. If you are still under contract, you will probably need to look at buying a new or second-hand sim-free phone and continue paying the contract until it ends. Alternatively, you could ask for a quote to end the deal early and decide what's more cost effective and suits your needs.

Can I claim for my phone on my home and/or contents insurance?

It depends on your policy and whether your phone is covered, and then there will probably be fine print that you will need to navigate to see if your claim is valid. Our guide to contents insurance has more details. It's also worth noting that if you do claim on your home and/or contents insurance policy, it may make your next premium more expensive as you are seen as 'higher risk' to an insurer. The excess may also be much higher ($400 to $750 etc.) compared to phone insurance ($100 to $200 etc.), so it may not be cost effective to make a claim.

Do I get a new phone, or will it be repaid instead?

If you have your phone stolen, you will be given a new phone. If your phone develops a fault or is damaged, the policy is to (usually) send it to be inspected. In any such instance, the insurer will attempt to repair the phone with new or refurbished parts if it is cost-effective, or if it isn't, the insurer will replace the phone with a refurbished phone or a new phone or similar specification. In most cases, this will take up to 10 working days - Vodafone and Spark may offer a free temporary replacement phone, but this is on a case-by-case basis.

How much is the excess, and is there a limit to how many times I can claim?

The excess, and how many times you can claim, depends on the insurer:

Spark has an excess of $150 for phones with a recommended retail price (RRP) of below $800, and $195 per claim for any phone with an RRP above $800. There is a limit of three claims per year. After the third claim, Spark will cancel your policy.
Vodafone has an excess of $200 for your first claim, or $250 for a second claim within 12 months (where a phone is valued below $1,801) or $350/$400 if the phone's value is $1801-$2,100.
Cove Insurance has an excess of $200 per claim, with no caps or limits on how many times you can claim.

What happens if my phone is stolen and apps and calls are made?

Spark, Vodafone and Cove all over you up to $1,000 for unauthorised spend.

My phone is too old or damaged to be covered by any policy - can I still get insurance?

If your phone cannot get cover because of its age and/or condition, then phone insurance probably isn't an economical way to protect your phone given a year of cover and one excess will cost at least $350.

If I have contents insurance already, do I need phone insurance?

You might be covered by your home and/or contents insurance – check your policy or read our guide to contents insurance. Contents insurance won't cover unathorised use costs, overseas theft or damage and may have more exclusions. Also, with phone insurance, you can walk into a Vodafone or Spark store with a fully broken phone and they handle everything directly, rather than making an insurance claim with your contents insurer.

What to do if you need to make a claim

What you'll need to do depends on what has happened to your phone, as we outline below. If in doubt, call the insurer urgently and ask them to confirm their claims process and what exactly they need from you.

Was your phone stolen?

Step 1 – Block your phone by calling your network's customer services team to block your mobile and SIM card.
Step 2 – Report the theft to the policy and obtain a police report reference number to use with your claim.
Step 3 – Claim your loss directly with your insurer.

Was your phone maliciously damaged?

Step 1- Report the theft to the policy and obtain a police report reference number to use with your claim.
Step 2 – Claim your loss directly with your insurer.

Was your phone accidentally damaged?

Step 1 – Claim your loss directly with your insurer.

Phone Insurance - Our Conclusion

We're not fans of phone insurance overall. The cost is high - there are a lot of situations where you won't be covered. We particularly raise an issue with no cover for any problems "caused by manufacturing faults, wear or tear" or similar, which can be very widely interpreted. In our view, there is more downside than upside.
If you buy a brand new expensive phone under contract and wouldn't be able to afford losing it, then phone insurance may be a necessity to limit the risk of theft or damage. Otherwise, the ongoing costs may represent poor value for money.
Phone insurance claims mean you'll be without your phone for a number of days, whereas repairs with specialists can often be completed in a same-day service.