Love your new laptop or iPhone? Then insure it

Gadgets are more than toys, and adequate cover for them has become an important part of modern life. Chiara Cavaglieri investigates the options

With expensive smart phones, pocket-sized games consoles and laptops, gadget fans are a walking temptation for thieves. At any given time we could be carrying thousands of pounds' worth of equipment and, without proper protection in place, risk losing the lot.

Most people will have to replace a gadget at some point. Each year in the UK, up to six million mobile phones are lost, stolen or damaged – with a massive 600,000 dropped in the toilet. With so much potentially at stake, it's crucial that you have appropriate protection in place.

"When you are the proud owner of a top-of-the-range handset, you inevitably want to make sure that if you lose it or break it, you'll get a replacement or that it will be fixed," says Stephen Ebbett, director of specialist gadget insurer ProtectYourBubble.com.

In some instances a few tweaks to a home contents insurance policy is enough to offer peace of mind. Although a basic policy will not typically include extras such as accidental damage or cover away from the home, both of these can be easily added to your policy.

"Depending on the value of the gadget, you may also need to name it specifically on your policy to ensure that its value will be covered when you are taking it away from your home," says Gareth Kloet of comparison site Confused.com.

This can be a relatively cheap way to protect your goods, with premiums rising by an average of £30 a year if you want to add accidental damage and by about £17 per year if you want to cover your gadgets away from home, according to Confused.

The big problem, however, is that if you make a claim you will have to pay an excess which could be more than £250. For gadgets worth less than this, a high excess could dwarf the real cost of replacing it yourself, particularly when you take into account further increases to your premium upon renewal. On a more practical level, you may also have to wait a long time to get a replacement phone.

This is where specialist gadget insurance can be a better alternative. These policies will offer cover for not only theft and accidental damage but also for mechanical breakdown, which home insurance policies do not cover. Many also offer discounts on multi-gadget policies if you need to cover a number of items in one go. There's even a new comparison website dedicated purely to gadget insurance from Moneymaxim.co.uk, but at present this compares only eight providers including Protectyourbubble, Gadgetcover and Laptopguard.

One rule of thumb, however, is to think twice before taking insurance in-store as this tends to be expensive and may not offer a high level of cover. O2, for example, charges new customers £15 a month for iPhone insurance and sets an excess of up to £100 for some handsets.

"Taking out a policy on point of sale, in-store or over the phone is convenient, but what many consumers don't realise is that if they spend a few extra minutes on the internet they could save themselves more than 50 per cent," says Mr Ebbett.

Prices for a specialist policy range from about £9.99 a month for three gadgets to £14.99 a month for five. Protectyourbubble will also cover an iPhone for just £6.99 a month, including up to £100 worth of unauthorised usage with an excess of only £50 and items replaced within 48 hours.

"As you can see, the annual cost is considerably more than adding the extra cover on to your home policy. But you will need to weigh up the other factors such as the amount of excess you will need to pay, the type of cover that is on offer and your no-claims bonus to decide which cover is right for you," says Mr Kloet.

Finally, your current account is an avenue worth investigating. Lloyds, for example, offers cover for phones up to £2,000, up to £1,500 for unauthorised use, with a £30 excess on all its fee-paying current accounts, which cost upwards of £7.95 a month.

Case Study

Victoria Williams, 44, from Neath, West Glamorgan

After already replacing her 17-year-old son's laptop and mobile phone, Ms Williams, an office worker, decided to take out a policy with Protectyourbubble.com in June.

Within two months this proved a timely decision when her son dropped his second iPhone 3GS, breaking the glass screen.

Instead of taking the phone to an Apple authorised dealer to be fixed, which could have cost £150, Ms Williams was able to claim on her policy and pay only £50 excess to have the phone fixed through Protectyourbubble. "I am covered by my home insurance and I did claim for the first iPhone we lost. But when I renewed the policy they put my premium up so I didn't want to risk claiming again," she says.

Instead, Ms Williams now relies on her discounted multi-gadget policy costing £126 per year, which covers not only her son's phone but also his new laptop and her own HTC Desire handset.

"I definitely recommend taking out separate cover if you've got young kids with expensive gadgets – they're not the most careful people in the world!"