Is Telstra's New Phone Insurance Worth It?

High-end smartphones often cost north of $600 outright, so insuring them makes sense. Telstra's new insurance option saves you from panicking if you lose your phone or it gets damaged, but that protection doesn't come particularly cheap.

The new insurance option, which is only available to contract (postpaid) customers, charges $14.95 a month to protect smartphones against accidental loss, damage or theft. It also covers you for the cost of any calls made on a stolen phone in the period before you notify Telstra. If your phone breaks down twice in a 24-month period, it will be replaced under the policy, One clause to watch: the amount offered to help replace a damaged phone when overseas is lower than in Australia.

Owners of older handsets can also choose a cheaper $9.95 a month package. I'm dubious about the value of this -- given the low price of "feature" phones, it might be more effective to save that amount of money yourself as self-insurance, and buy a new model if you have problems. (As ever, buying additional insurance doesn't negate your basic warranty rights.)

Telstra [via Telstra Exchange]


Comments

    The value of these insurance plans also depends heavily on the amount of excess charges payable upon making a claim. Secondly, most customers should check whether their phones are already covered under a home and contents package on their home. As with all insurance, it is up to the individual customer to decide if a certain product is 'worth' getting.

    Check your home contents insurance - if you have accidental damage cover, it's likely that your mobile is already covered (in Australia at least) if it gets lost or damaged.

    why not self-insure,
    set an autopay, $15/mth into your own online savings account?

      Because $15 x 12 = $180... which isn't enough to pay for something like a lost iPhone 4. I'm not a fan of paying that extra $15 for the "what if" situation, and if you're like me (same iPhone 3G for the past three years, still going strong) and Fiona, why would you? But if you're like Fiona's friends... $15pm is a small price to pay to allow you to continue to be irresponsible over something so expensive to replace. ;)

    For me, phone insurance is never worth it. I've had 3 phones in the last 10 years (none of which have ever died or been lost, I just wanted to upgrade each time). When I got my last phone, vodafone really tried to pressure me into getting the $10 a month insurance. (Of course I declined. If I'm going to lose/damage my phone, I'll put up with paying out the rest of my plan - gives me even greater incentive to keep my phone glued to me at all times).

    Two of my friends however - well, I get an SMS every few weeks from a random number. "Hey guys, lost my old phone, so this is my new number".
    *shakes head*

    I think it comes down to the person, but Steve's suggestion is pretty good. If you're not like my friends above, self insuring seems like a reasonable option.

    Insurance is bs.
    GF creacked iphone4 screen. Had optus insurance. Sent the phone away to get fixed. Took 4 weeks and had to pay for the repair too. $120 or something.

    The insurance just makes it abit cheaper. Had bad/rude service from the insurance company.

    Got a refurbished iphone 4 instead of hers back.

    AAMI contents insurance doesn't cover iPhones specifically. Ridiculous.

    Back when I was on Optus I used their insurance for an iPhone. I compared it with the price of adding it to my existing personal insurance and Optus was cheaper.

    Lost my phone in a swamp in the middle of the night (film shoots can be a little nuts).

    That one replacement meant my insurance more than paid for itself. And, as a bonus, my iPhone 3G was replaced by a (then current) iPhone 3GS.

    I'm now on Telstra through my business, and if we didn't already have our phones insured through our broker, I'd happily pay $15 a month to not worry about breaking or losing my phone. Who wants to spend their life looking out for an expensive box in their pocket?

    Way up the cost of insurance, 24mths x $10-$15 + $150+ excess fee if it breaks, verses whatever it would cost to have it repaired.

    Unless it is as catastrophic as losing your phone or having it stolen, insurance almost always costs you more than simply having it repaired/replaced.

    Apart from the excess, also check the line *For repair or replacement not exceeding the cost to replace the handset with a similar model.

    If anyone wants to read the PDS, is there a clause that says "we only have to pay you cash not actually replace/repair the phone. This is based on the "market value" of the phones (they usually have a table of prices).

    What can happen is that say you bought a $800 handset, after 12 months it might be "worth" $550, take off the $250 excess and they only have to pay you $300. In the meantime you've paid 12 months of payments @ $15 per month for a total of $180 so your insurance claim has only made you $120! Yet you still have 12 months on your contract to go, and only $300 in your pocket to buy a new phone.

    Dropped my Telstra HTC Desire in the toilet-9 months in on a 24 month plan. Got quoted $470 to repair, ended up getting second hand one off ebay for $340.
    Would have cost me $285 with excess for insurance so I suppose almost makes sense.
    A couple of months on probably not.

    Insurance is a 'what if' purchase.
    People familiar with the insurance industry will know that payouts are in direct correlation to the amount paid into the persons account that is claiming.

    Self-investing, is the only way this useless 'donation' of money, for someone else to hold & obtain interest on & 'possibly' payout, will ever change.

    Insurance (on personal effects only) basically says you don't know how to manage your money & fear has allowed you to find comfort in other people holding your money, which.. is kinda like the robbers just took your money. Zing?

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