The great GADGET insurance RIP-OFF

MILLIONS of us will have unwrapped new high- tech gadgets this Christmas.

But with mobile phones, smartwatches and tablet computers now costing up to £1,500, should you take out insurance?

Gadget cover is now as much as £300 a year for full protection against theft, loss and accidental damage.

But if you buy the cheapest £50 insurance, it may cover you for only half the cost of your phone, research by Money Mail reveals.

Many of us would rather take the risk and not bother with insurance at all.

But if you could not cope without your device — and could not afford to replace it if the worst happened — experts say you should consider it.

Buying cover from the store you purchased the goods from will rarely be good value. It is always worth shopping around via comparison sites.

However, it is also crucial to check the small print to ensure it covers you for what you want it to.

Earlier this year, Money Mail discovered that some policies are riddled with up to 40 exclusions which can make it very difficult to make a successful claim. Some policies are simply often ‘not worth the paper they are written on’, according to consumer complaints service Resolver.

First, check you already have cover. Many home insurance policies, bank account packages and premium credit cards cover valuables outside the home from theft, loss and accidental damage. But making a claim on your home insurance could involve a big excess and bump up your premium when you renew.

A typical excess of gadget insurance is just £50 compared to £100 to £250 for home insurance. Home insurance will typically only cover items for up to £1,000 each, unless you pay an extra premium.

Packaged bank accounts — where you pay a monthly fee for add- ons such as travel and phone insurance — can also be a good way to insure your device. Nationwide, for example, charges £13 a month for its FlexPlus account, which includes travel and phone insurance plus commission-free cash withdrawals abroad and breakdown cover.

This will cover you and your family’s mobile phones for up to £1,000 per claim against loss, theft, damage or breakdown.

Halifax’s Ultimate Reward account costs £17 a month and includes travel insurance, breakdown cover, home emergency cover and phone insurance for up to £2,000 per claim.

If you decide to take out stand-alone gadget insurance, shop around on price comparison sites such as uswitch.com, gocompare. com and moneysupermarket.com.

However, be warned that the lowest-cost policies will not pay out for the cost of the phone.

For example, the cheapest policy to insure a new iPhone XS Max 512GB would cost just £76 a year with i-Digital, according to GoCompare.

But you would only be insured for a maximum of £900 per gadget, minus the £50 excess — so you would receive just £850.

To replace this phone would cost £1,449 brand new — leaving you almost £600 out of pocket.

From £135, you could cover multiple gadgets against loss, theft and damage with no limit with Switched On Insurance and Trusted Insurances. This could be a better option for those with several expensive devices which they regularly take out of the house. Debenhams’ ‘ Ultimate Plus Cover’ includes ten devices and costs up to £310 a year. It covers claims of up to £7,500 a year and includes key cover too.

James Daley, of Fairer Finance, says: ‘Many of us are now walking around with expensive items, particularly straight after Christmas. You see people working on the train with £1,000 laptops and £1,000 phones out on the table. They could be easily dropped or stolen.

‘If you rely on these devices and you would struggle to find that kind of money overnight, you should consider insurance. But do your homework first.’

Mr Daley also advises that extended warranties should never be bought in-store. When consumers buy expensive electrical items or white goods, they will generally come with a one or two-year warranty. This is a guarantee the goods will be replaced or repaired if it breaks during this period.

But shops will also try to sell extended warranties that provide this guarantee for longer — typically three to five years and costing up to £100.

Consumer groups say this is almost never worth the money.

This is partly because the chances of an expensive electrical device breaking between exactly two years old and three or five years old is fairly slim.

Consumer laws also protect you beyond the warranty. Amy Roberts, of money

saving expert. com, branded many extended warranties a ‘waste of money’, saying: ‘Sometimes the warranties cost almost as much as buying a new product. In which case, it is better to take the risk.’

Under UK consumer law, all goods must last a ‘ reasonable time’, so if your television explodes after two years and you are outside your warranty, it is worth contesting.

If you want extra peace of mind, use comparison sites such as compare extended warranties. co.uk or a stand-alone firm such as Surewise.com.

Rory Stoves, of uswitch.com, says: ‘ When it comes to extended warranties, it really doesn’t pay to pick one up at the counter. These policies are typically expensive and restrictive, two things you don’t want from your insurance policies.’