The great iPhone insurance swindle

A few days ago, I wrote about my purchase of the latest consumer gadget – the Apple iPhone.

Unlike many others, I didn’t queue and the transaction was smooth but I was concerned that I was mis-sold insurance for the device. The conversation went something like this (I didn’t record the exact words at the time – but I wish I had):

O2 sales representative – let’s call her Emma (because, according to my sales receipt, that was her name): “Would you like any insurance for your iPhone? It’s only £7.50 a month and covers you for theft, accidental loss or damage not covered by the warranty but it’s only available at the time of purchase – not afterwards – so you would need to take it out now.”

Me: “No thanks – I know I’d be committed to the contract but even so that that’s a lot of money over 18 months. I’ll take the risk of another £269 to replace the iPhone.”

Emma: “Are you sure, because it wouldn’t be £269 – it’s more like £600 for a new iPhone from O2?”

Me: “How can that be – the handset isn’t subsidised, so I should only need to pay for a new handset at the normal retail price?”

Emma: “We don’t make the rules… that’s Apple.”

I subsequently agreed to buy the insurance, after checking that I could cancel at any time.

Yesterday, I asked about insurance in a Carphone Warehouse store and was given a similar response. I also asked in an Apple Store and was told that they thought it was just the cost of a new iPhone but that I’d need to check with O2.

Hmm… I smell a rat here. Especially when the O2 website says that:

“[…]insurance must be purchased within 28 days of activating your iPhone account with O2.”

So, not at the time of purchase then.

If got even worse when I read a PC Pro article about iPhone first impressions, from which I quote:

[in respect of] “O2 pushing £7.50/month insurance, to cover the situation that in the case of a lost iPhone, O2 will require the unlucky punter to buy a new phone and undertake a second contract”

[…]

We checked with O2 this morning and, unbelievably, this is true. If you lose your iPhone without insurance, then you will have to splash out on a new handset, and take out a new contract, paying two monthly tariffs at once. Now that is a costly mistake.

UPDATE

O2 has changed tack this morning, and is now claiming that customers won’t have to pay for two contracts at once, but they will have to source an iPhone on their own.

Now, the exact wording in the terms of service (under “Ending the agreement”) is:

“8.3 If this Agreement is ended during the Minimum Period, you may be required to pay us the monthly subscription charges up to the end of that Minimum Period. This does not apply if you end the Agreement for the reasons in paragraph 8.4 or if you purchase a new iPhone from us, but in this case you agree that a new Minimum Period will apply.

8.4 You may end this Agreement by giving us written notice if:

(a) we break this Agreement in any material way and we do not correct the situation within 7 days of receipt of your written request;

(b) we go into liquidation or a Receiver is appointed over our assets; or

(c) we increase charges for calls, messages or data that form part of your inclusive allowance or your Line Rental Charges, or change this Agreement to your significant disadvantage, in accordance with paragraph 9.2 of the General Terms, provided you give us a minimum of 30 days’ written notice (and provided you notify us within one month of our telling you about the changes). This does not apply where the increase or change relates solely to Additional Services in which case you may cancel, or stop using, that Additional Service.”

[Emphasis added by the author for clarity]

I’m no lawyer (so please don’t interpret anything written here as legal advice) but that sounds like I can just buy a new iPhone (from O2) and connect it to the account whereby a new 18 month contract will start but, crucially, there is no mention of the price of the replacement.

After spending much of the day responding on the Apple discussion forums (and not having received a response to my online query via the O2 website), I called O2’s customer service department on 08705860860. After a 20 minute discussion, I got confirmation that:

  1. A replacement handset would be available at the current recommended retail price of the iPhone.
  2. The original contract would be ended if a new iPhone was purchased; however a new 18 month contract period would commence.

The exact text of the response I received from O2 was:

“Hello Mark,

As per our discussion today. If you were to purchase a replacement handset you would pay the Recommended Retail Price for the replacement (as of the 13/11/07 it is £269, this price is subject to change). However, please be assure that you will only have to pay the same price as any new customer and would not be required to pay a premium due to the lose [sic].

The only concession you would need to make is that your contract would have to start again from the time of purchasing the replacement please see terms and conditions (relevant section follows).

“8.3 If this Agreement is ended during the Minimum Period, you may be required to pay us the monthly subscription charges up to the end of that Minimum Period. This does not apply if you end the Agreement for the reasons in paragraph 8.4 or if you purchase a new iPhone from us, but in this case you agree that a new Minimum Period will apply.”

[…]

Kind regards and enjoy your I-phone [sic],

[Name removed to protect the O2 employee’s privacy]
O2 Customer Service.”

That sounds perfectly fair to me, so why are the iPhone retailers pushing insurance on people who probably don’t need it? Sure, £269 is a lot to stump up if you lose your phone but it’s a big difference from the £600 that I was quoted for a new handset and £135 is not a small amount for insurance that I probably don’t need (chances are my household contents insurance covers me – albeit with a large excess). It seems to me that O2 are preying on consumers’ insecurities (and Carphone Warehouse seem to be even worse, based on the contents of an Apple forum thread).

I’m surprised that Apple would risk their strong brand dealing with companies that operate in this manner (I guess that’s what happens when you deal with the Devil – i.e. pretty much any telecommunications company) but I’m now seeking confirmation that my insurance has been cancelled without charge (I believe that UK law gives me 14 days to cool off from any insurance policy and I’ve yet to receive any written details of the cover) as well as a goodwill credit on my O2 account to cover me for the worry and inconvenience that this has caused. I’ll post an update if there’s any significant news on this…

80 Comments

  • Pengranger
    Thursday 15 November 2007 - 7:22 | Permalink


    Hi. Nice blog. You are right that you are provided with a period of 14 days after receipt of the full terms and conditions of the policy. If you cancel, and have made a payment during this period, you are entitled to a full refund – you would probably need to request it as I doubt it would be automatic. Incidentally, you should have received at least a Policy Summary at the time of the sale. If not, I’d complain to the firm.

    Mobile phone insurance can seem expensive. The better policy cover unauthorised calls, which means if someone uses your phone to make calls after a loss or theft, as long as you’ve met the notification requirements, you won’t lose out. There has been an occasion in the past of an £8000 bill being run up. I guess the iPhone will be a major theft target!

    Pengranger

  • Thursday 15 November 2007 - 10:14 | Permalink


    Thanks Pengranger. It’s not so much the price that bothered me as I understand it covers me for calls made without authorisation (e.g. if stolen – although I do have a pin lock on the phone) – it’s the hard selling of insurance (and blatant lies) that really annoyed me.

    Mark

  • Wednesday 28 November 2007 - 20:44 | Permalink


    Although I’ve yet to get a satisfactory response from O2 on my experience with their Milton Keynes store’s methods of persauding me to buy mobile phone insurance, it seems that the Carphone Warehouse insurance hard-sell is rife. The BBC ran a report on Carphone Warehouse’s iPhone insurance sales tactics on tonight’s Watchdog programme – here are some of the highlights:

    • If you lose your iPhone for whatever reason you will have to replace it but do not have to buy another contract.
    • Mobile phone insurance is not bad – if that’s what you want and it is sold properly; however Carphone Warehouse’s insurance is £50 a year more than O2’s and staff are paid commission on insurance sales.
    • Carphone Warehouse do not believe the practice of misleading customers in order to sell insurance is widespread [however the number of cases on the Internet and the fact that the BBC were told the same thing in three out of five stores suggests that it is].

    [Source, BBC Watchdog, 28 November 2007]

  • Wednesday 28 November 2007 - 21:38 | Permalink


    I would like to say thank you for clarifications, I was told by Carphone Warehouse sales rep who said that it will be my risks if I lose iPhone therefore have to pay for remaining 18 months contract. Thankfully I didn’t take it as I feel the insurance shouldn’t cost more than the handset! He told me that even replacing the current contract with new iPhone won’t make any difference of my duty to pay for remaining term of the contract. I think Carphone Warehouse staff needs to be given good telling off by all the customers! He deliberately played on my insecurities of high costs of contract terms to persuade me splashing out for expensive insurance.

  • NTW
    Thursday 3 January 2008 - 17:29 | Permalink


    carphone warehouse yet again – still at least you can always tell when one of their staff is lying, their lips move

  • Monday 25 February 2008 - 22:01 | Permalink


    Relative to your blog post above, it would be great if you would take a look at the iPhone insurance at http://www.2u.co.uk/iPhoneInsurance/ and let people know what you think.

    You can insure your iphone at any point up to 6 months after purchasing your iphone, and it covers you for all the points listed at http://www.2u.co.uk/iPhoneInsurance/

  • Monday 25 February 2008 - 22:19 | Permalink


    Duncan – from your website:

    “Why pay up to £600 to replace your iPhone?”

    Exactly. The cost of a replacement iPhone is the current RRP (i.e. around £269) – not £600 – and the replacement can be connected to an existing contract (although the 18 month contract period will start again, there will be no requirement to “buy-out” the existing agreement).

    So, unless an iPhone owner is concerned about the effect of calls being made after theft (which, once the carrier is notified, in theory you should not be liable for), even this insurance is unnecessary.

  • Tuesday 26 February 2008 - 8:35 | Permalink


    So given the choice of

    *£7.99 a month (which also covers repairs for minor damages etc) or
    or
    *£270 (which then also involves an additional 18 month contract at a minimum of £35 per month ie £630 – plus the £270 = £800)

    – which would you take? Personally, I’d take the smaller amount of £7.99 a month.

  • Tuesday 26 February 2008 - 8:37 | Permalink


    Correction – That £800 – should read £900 (its a bad maths day!)

  • Tuesday 26 February 2008 - 15:00 | Permalink


    OK… so let’s look at this another way. Insurance is about management of risk. If I choose to take the risk of not taking out insurance, then I have to consider my potential exposure.

    On day 1 of an 18 month contract, that exposure is £269 for the phone, plus 18 months x £35 – a total of £899.

    But if my phone is lost, let’s say half way through the contract, I have a choice:

    1. Buy a new iPhone (potentially by then a newer model) and connect it to my existing account with a new contract. All I am looking at is the cost of the replacement handset (that I probably lusted after anyway), plus the additional months (so, assuming I’m half way through a contract, £269 for an iPhone and £315 for 9 months service – for the other 9 months I’m already contractually bound to the expense).
    2. Buy another phone/contract (non-iPhone) and take a hit on the £315 that I will owe O2 for the remaining contract usage).

    Those figures assume my phone is lost/stolen/damaged at the half way point in my contract (the point at which my exposure is greatest). In the first half of the contract, option 1 is more attractive as extending my 18 month commitment to O2 will be less significant. As I get closer to the end of the contract, then option 2 becomes more and more attractive (relative to the cost of insurance). There is another option too – assuming that I have sufficient cover, I could make a claim on my household contents policy.

    If I take the 2U insurance when my phone is 5 months old (I have to do it within the first 6 months), then I’m looking at £7.99 for 13 months – so just over £100 – in addition to the £899 that I’m already committed to (and I can’t make a claim for the first 28 days). In addition, at £7.99 a month it’s still more expensive than the insurance that O2 sold me (although I have to take theirs within 28 days of contract commencement – contrary to the advice I was given by the O2 representative when I bought my iPhone).

    I’ve had a mobile phone since 1994 and have been lucky enough never to have needed to make an insurance claim for one. If I had bought insurance with each new phone/contract I would have paid out more than the cost of an iPhone and its associated contract by now.

    It’s a numbers game. I insure the things that I think are the greatest risk: my house (a requirement for my mortgage); my car (a legal requirement); my life (to provide my family with an income should the worst happen to me) but very little else. A few weeks back I bought a new computer – I could have taken an extended warranty but I chose not to take that risk; ditto last time I bought a washing machine/fridge/dishwasher; and the same again for protecting my credit card payments. If I insured everything that I could then I’d have no money left to buy anything.

    2U’s figure of £600 to replace an iPhone (or £900 as stated in the comments here) is irrelevant – the true figure is anywhere between £35 and £899, depending on how far through the contract I am and what I chose to do about a lost/stolen/damaged iPhone). I just wish that the insurance industry would stop trying to prey on people’s insecurities.

  • Tuesday 26 February 2008 - 18:15 | Permalink


    I understand what you are saying – It is good to look at insurance as being about risk and financial benefit. For that reason, I second your view about not preying on insecurities – better to look at it cold and clinically, looking at the financial risks and rewards.

    There is also a personal / emotional / subjective side to it – it is always a personal question-and-answer as to how long you would want to be without your iPhone, laptop, phone, or whatever item you are insuring, and how much you want to be protected against (if you are out of the country are you covered, or how much time you can afford to spend sorting it out if you do it yourself) – the more it matters to you, the more it is likely that you would want to insure it.

    Good news – I have just found out that the underwriters have lowered the price of the iPhone insurance, so it is now on the Standard policy at £5.88 a month, so it is now more cost effective to insure your iPhone.

    This means that the 13 month cost that you mentioned in your example above would be £76 rather than £103.

    It is worth pointing out that the figure you gave above for the replacement cost of “anywhere between £35 and £899″ – that £35 is only for the price plan part – there will be a bare minimum of £270 on top of that – so a total of £305 (£450 if SIM free).

    Another element to consider if you don’t have insurance is that £35 is only the basic, lowest price plan option. The other price plans are £45 and £55 per month, so you have a full term cost of £810 and £990, plus the £270 cost of replacing the iPhone.

    Plus, if you have your iPhone without the contract, ie a SIM-free unlocked version as many do, then you would not get the subsidised cost of any replacement. The £600 figure which you mentioned on the 2u site was totally true – that was the price of getting an iPhone a few months ago. This has now come down to around £450.

    Currently the going rate for an unlocked iPhone from a reputable supplier is £450 including VAT. Yes, you can get it cheaper elsewhere – but good luck with that. From experience, we tried 2 other suppliers before finding a decent provider, and had the hassle of claiming the money (£350+ each time) back from/through eBay where we got it – not impossible – just a big hassle.

    The closer you get to the end of your phone contract then the less the immediate financial benefits of iPhone insurance – or any mobile phone insurance – because you can just upgrade. Then it is more about saving the hassle, rather than the hassle and the cost.

    For this reason, there is nothing to stop you say 2 or 3 months prior to coming out of contract, stopping your insurance – then if, as and when you upgrade to a new handset, insuring that if you want.

    The “claim on your household insurance” argument is one that often gets bandied about – but when you actually consider the excess fee on most house insurance policies (often £100+), plus what a claim will do to the cost of you house insurance next year, it is not usually a viable option – or at least a last resort.

    Yes, insurance companies exist to make money – but they can effectively manage the risk as well – both financial and hassle-risk. I personally had to claim for a £400 phone last year and only had to pay the excess then I was back in business – after 5 months of paying the insurance at £7.99 a month ie £40. The whole process took 2 days, without wrangling with the networks (good luck with that one too).

    Thankfully I have not yet had a need to claim on my iPhone insurance, but a friend who did NOT have insurance showed me his iPhone which he had dropped badly onto concrete – the screen was totally shot – and he just look SO disappointed – A 50 year old man, and he was just so disappointed that his new “toy” was ruined. He is going to claim on his house insurance because he said that was his only option and just had to accept what it would do to his house insurance premiums next year.

  • Tuesday 26 February 2008 - 20:22 | Permalink


    @Duncan – You make some good points (although my reasoning behind saying that the bottom end of the range is £35 was that in the last month you would probably just stump up the last month’s rental and not be bothered about the phone – effectively you would be free to go where you liked at that point).

    And I do understand what you are saying about accidental damage – this is the first phone that I can truly say I would be upset about having destroyed by dropping it.

    It’s good news that the underwriters have dropped the price – and once you get down to that sort of level then it does become less of an issue – who knows, I may even take out a contract at that price – any chance of any further discounts ;-) ?

    I’ve enjoyed our virtual discussion though – thanks for dropping by my blog and for taking so much time out of your day to comment.

  • Wednesday 27 February 2008 - 8:35 | Permalink


    Mark,

    Thanks. On the 2u iPhone Insurance there is no ’12 month contract’ like many other insurers insist on – the product stands on its own merits – if you dont want it, cancel it. If you want to continue the insurance protection then you would continue paying the monthly premium.

    You would simply pay the first 3 months premium online, then pay by monthly Direct Debit for however long you want.

    Again, you can cancel at any point – for example a few months befeore the end of your contract. You can then re-insure your new phone as and when you get it.

    For anyone who wants to have another look at it, it is at http://www.2u.co.uk/iPhoneInsurance

  • Tranker
    Wednesday 5 March 2008 - 20:20 | Permalink


    My theory is that I have bought an expensive phone and therefore extra care should be taken not to lose it, get it damaged. Accidents happen and if the case is that my iPhone gets lost etc. I have to cope with that and use my own insurance policy of buying a dirt cheap handset to attach to the contract or use an old handset, I’ll be damned if Im paying another 135 quid just in case as I am on an 18month contract anyway which would be 202.50 (thats if they even do half years?) in which case your insurance policy might as well be buy two iPhones, silly really!

  • Thursday 6 March 2008 - 8:27 | Permalink


    Yes, you are always best to take near-obsessive care of your expensive phone, but here’s the thing …

    You would be paying £5.88 a month for however long you insured it for – and I would recommend that you do it for the early part of the contract – the later into the contract then the closer you are to a potential free or discounted upgrade.

    18 months at £5.88 = £105.84

    With the insurance you will not then be bound to a further contract.

    You could use an alternative phone for the rest of the contract period – but you wil be paying a high price for a data price plan – you couuld get the calls and text part of the price plan much cheaper else where. Plus you have the cost of the alternative phone – albeit cheaper than buying an iPhone, it is still likely to cost something.

    And to be honest, at least for me, after having used an iPhone for a while, going back to an ‘ordinary’ phone is going to be like losing your car and going back to cycling everywhere.

  • Rob M******
    Wednesday 9 April 2008 - 11:35 | Permalink


    Mark,

    During a protracted discussion with O2’s press office regarding this matter, we pointed out paragraph 8.3 in their iPhone terms and conditions, which stated:

    “If this Agreement is ended during the Minimum Period, you may be required to pay us the monthly subscription charges up to the end of that Minimum Period. This does not apply if you end the Agreement for the reasons in paragraph 8.4 or if you purchase a new iPhone from us, but in this case you agree that a new Minimum Period will apply.”

    We received the following response:

    “The customer simply buys a new iPhone for the normal price of £269 and we transfer the contract of the lost/stolen iPhone onto the new iPhone, so that the customer can keep the number. ”

    Pointing out that this appears to contradict their terms which state you need to take out a new contract, they referred to an internal expert and came back again with:

    “Rob’s question about how an existing customer activates a new iPhone with their existing account (i.e. when they replace their iPhone). In this instance all a customer has to do is put their SIM in the new iPhone, synchronise their new iPhone with their computer and log on to iTunes again. They are then led through a light version of the original activation process and all they need to complete this is their Mobile Phone Number. Some customers may find their Wifi isn’t working after this process, which can easily be rectified by contacting O2 Customer Services who will reset their MAC address (only an issue when putting an existing SIM in a different iPhone).”

    I replied that the above statement was not factually correct – the phone arrives with the SIM in place, and again they came back with:

    “That’s the only cost – £269 for the new device, if you’re not insured, and then carry on with the old contract.”

    So, they state that you do not need to take out a new contract, just complete the old. So good news for the consumer – so they state. Has anyone actually tried this though?

    Looking at the terms again today the relevant section has changed and does not refer to it at all.

    “8.3 If this Agreement is ended during the Minimum Period, you must pay us the monthly subscription charges up to the end of that Minimum Period.”

    As for insurance or not, that is simply a personal choice in my opinion. It relates to the individual’s attitude to risk and their ability to self insure, whether a phone costs £100 or £1,000. Having to spend an unexpected £270 is not possible to some people, and not welcome to many others.

    If you are looking for iPhone insurance though, take a look at our offer from only £4.41 per month at [link removed by request]

    Regards.

  • Wednesday 9 April 2008 - 12:34 | Permalink


    Rob,
    Thanks for this extra information. I have the quotes that I used above in writing from O2 (and notes on my account) – the situation that you describe is slightly different again so it seems that even O2 can’t decide what their position is on lost iPhones…

    Mark

  • Adrian
    Friday 18 July 2008 - 22:37 | Permalink


    Hi, does anyone know what the situation is now, with the iPhone 3G? I’m particularly concerned about having to pay contract charges on top of the replacement cost of the handset should I lose it?

  • Saturday 19 July 2008 - 11:24 | Permalink


    Adrian – I havent checked out the terms and conditions for the iPhone 3G but I imagine you would have to purchase one at the full price if you lost it, as the phone is now subsidised (as is pretty much any other handet you buy). If O2 didn’t want to play ball, I would just use your SIM for the remaining life of the contract in an unlocked phone – there are plenty out thee and they are es enough to get hold of now…

    In any case, now that insurance has dropped in price to a more reasonable level I wouldn’t see that as such a bad deal.

  • Matt
    Monday 11 August 2008 - 12:02 | Permalink


    I bought a new 16g iPhone at Carphone Warehouse last Saturday. The guy conducting the sale told me that he could offer full insurance for £3.00 per week which would work out at £35 per quarter (it actually works out at £39.00 per quarter) and £156.00 per year or £234.00 for the 18 month contract.

    I declined his generous offer and today (Monday) recived a call from 02 which went something like this.

    o2: Hi we are calling to confirm that you accepted our offer of insurance for your new iPhone.

    me: Erm no I declined that.

    02: oh, ok can you tell us why you declined?

    me: Well yeah, because it seemed very expensive and I’m sure I could get similar cover cheaper elseware.

    02: Well sir I’m glad to be able to tell you that we’ve slashed our prices recently (between Saturday afternoon and Monday morning!!!) and as you are a valued customer we can offer you 18 months full cover for a one off payment of £99.99.

    me: Well that does sound better, would you be able to send me the details of that offer in an email and I will make a decision. You do have my….

    02: click…

    So as well as getting the feeling that they are all bunch of scammers I’m now slightly concerned that I’ve been signed up for an insurance package based on that conversation. No email recived yet.

    By the way a quick search for “iphone insurance” shows that I can pick up 12 months cover for merely £52.92 from talkcover.co.uk

  • Dan
    Friday 31 October 2008 - 10:33 | Permalink


    Hi

    Great blog and very useful discussion as I purchased an iPhone 3G myself 2 days ago (from Carphone Warehouse) and have been toying with getting insurance ever since.

    In over 10 years of owning mobile phones I have never lost or broken one, so insurance has recently seemed a waste of time. In fact I think I only ever took out insurance for my first mobile.

    With the iPhone though I’m thinking that if I was to break it in say month 3 or 4 of my 18 month contract then I’d
    a). Obviously want to replace it with another iPhone, but
    b). Really, really wouldn’t want to be stung for £269 (or whatever it works out at) to replace it.

    On that basis insurance seems a good option, and I have been thinking of going for the O2 insurance @ £7.50 / month. I have looked at the other insurance offers and can see the following:

    Carphone warehouse: Chap in the shop offered me carphone warehouse insurance (called lifeline) @ £39 per quarter. This seems to be the most expensive of lifeline’s policies but it does cover loss of phone and also I’m assuming it covers the cost of the iPhone. Some of the cheaper lifeline policies don’t cover loss and ALSO cover less expensive equipment, so probably won’t stump up for the cost of the iPhone.

    Talk cover (£4.41/month) and iPhoneinsurance.co.uk (£5.88/month) which is actually 2u insurance. Both of these are provided by Supercover Insurance Plc and underwritten by Equity Red Star. The main point I’ve seen in the terms and conditions is the comment:

    “Replacement
    This policy offers replacement only and is not a replacement as new policy. If the electronic equipment cannot be replaced with an identical electronic equipment of the same age and condition, we will replace it with one of comparable specification or the equivalent value taking into account the age and condition of the original electronic equipment. ”

    Now what on earth does that mean? Seems to me they are saying if I lost my phone 6 months down the line, then they would take a view as to it’s age/condition/value and try and replace with a phone of that same age/condition/value. If this cannot be found then they will replace with a different phone of the equivalent value (which may not be what it originally cost for my iPhone in the first place). I think the key is in the statement “replacement only and not a replacement as new policy”.

    Hmmmm – think I might go for the o2 insurance!

  • Rob M******
    Monday 10 November 2008 - 9:52 | Permalink


    As Dan has commented on TalkCover phone insurance [link removed by request] terms and conditions above I thought I would clarify our policy on replacement handsets.

    All replacement handsets are brand new. If the same make and model of your handset is available at the time of replacement then it will be provided. If the same make and model is no longer available then a brand new replacement handset of equivalent specification and value will be offered in discussion with you.

    In practice with the iPhone this means providing a brand new replacement iPhone.

    Our customers who insured the original (2G) iPhone from July 2007 onwards are now being offered the iPhone 3G as a replacement handset.

    For those who would like to take a look at the details see http://www.talkcover.co.uk/apple/iphone3g/insurance.asp

  • Andrew
    Monday 24 November 2008 - 15:10 | Permalink


    I just emailed O2 to clarify the replacement cost of the iPhone 3G on a pay monthly contract, as clause 8.3 in the Terms of Service is no longer the same as it was when this blog was originally published. Here’s an extract from the response:

    “If the iPhone lost or stolen within 18 month contract period and you don’t have insurance on the phone, we don’t offer a replacement iPhone. In that case you can buy an iPhone at Pay & Go price. The new iPhone 3G 8GB for Pay & Go will be available for £349.99 and the 16GB version for £399.99.”

    So it’s much more of a financial sting to lose/damage your uninsured iPhone now than it was previously, making O2’s insurance seem like a more attractive option. If the old rules still applied, you would be able to replace your 16GB iPhone 3G for £159 plus a new 18 month contract (a contract that you might be willing to renew anyway) – but under the new rules it will cost you £399, although you wouldn’t be required to sign up for an additional 18 months.

    I’m still on the fence. I’ve never had to use mobile phone insurance before, despite having paid for it for years, but I really couldn’t afford to take a £399 hit if my one year old decided to give my iPhone a bath.

  • Monday 24 November 2008 - 15:33 | Permalink


    @Andrew – you’re right that the Ts and Cs have changed since I originally wrote this last year – in part that will be because the first generation iPhone was not subsidised by the networks, whereas the iPhone 3G is. What’s disappointing though is that, based on the information you were given, O2 will charge you the PAYG price (which is higher so as to make up for potential lost revenue through the lack of a contract), rather than something closer to the retail price of the first generation iPhone.

    As I’ve said before – whether you need insurance is all down to your view on risk… and with two small children of my own, I’d reckon that something happening to that iPhone is fairly high risk with your one-year-old unless you keep it with you (or out of reach) at all times.

  • Gillian
    Tuesday 10 February 2009 - 12:22 | Permalink


    hi
    I took out an iphone contract 17 days ago with 02 and never took insurance about 2 days later I got a call from 02 saying would I like the insurance as it was half price £5 per month I said I would think about it anf get back to them, I decided to take the insurance and called 02 yesterday and was told it was too late I had to take it out not later than 14 days after my contract started. I dont understand this and wondered what I can do, can anyone give me an address of getting phone insurance if not will put it on my household.
    Gillian

  • Tuesday 10 February 2009 - 13:42 | Permalink


    Gillian – according to the O2 website, you can take out insurance within 28 days:

    Pay Monthly customers
    You can buy your insurance at the same time as purchasing your iPhone. Alternatively you can complete this form within 28 days of purchasing your iPhone and we’ll add the £10 monthly charge to your account.

    Pay & Go customers
    You can buy your insurance at the same time as your iPhone in an O2 store. Alternatively you can call 2427 from your iPhone within 28 days of purchase. Insurance will added for a 12 month period at a cost of £120 which will need to be paid for in advance.”

    Other comments above have suggested alternative insurance companies but it seems to me that whoever you spoke to at O2 was misinformed (or else their own website is incorrect).

  • Tuesday 10 February 2009 - 14:08 | Permalink


    Who in their right minds is going to pay £10 a month for iPhone insurance when there are now so many alternatives? Just Google “iphone insurance” and the first page throws up a growing range of providers, all of which (apart from O2) are much less than £10 – most are around the £5 mark.

  • Gillian
    Tuesday 10 February 2009 - 14:10 | Permalink


    Hi Mark

    Yes I noticed I can take 02 insurance out 28 days after purchase but it doubles in price they quoted me £5 by phone online its £10.
    I have been onto a site called Talk cover they seen reasonable and the excess is ok £25 for theft or accidental damage and £50 for loss. I found a student site saying if you key in a code and say you are a student at university you get it even cheaper (lost the site name)I can’t find the site, I find this strange as Im not at uni so I would have thought I was lower risk and should get it cheaper. It works out at £52.92 a year if you pay it up front and £5.88 if you pay by standing order. I think it seems ok and less than my household insurance which has an excess of £100.
    Has anyone any cheaper deals or have bad things to say about talk cover would be interested
    Forgot to say if your claim is outside Uk excess is £75.

  • Tuesday 10 February 2009 - 14:22 | Permalink


    @iPhone Insurance Dude – yet another comment spammer on this blog post… I’m getting a bit tired of this… especially as there is a discussion above with your colleague (or pseudonym?) Duncan Ritson-Elliott about the 2U cover (that your site sells). Consequently I’ve removed the link to your website from your comment (in line with this site’s rules for comments).

    @Gillian – sorry I mis-understood your question – £10 a month does sound excessive. Talk Cover have left some comments on this blog post themselves (see comments from Rob M******) but you might find better advice elsewhere on the ‘net as this post seems to have been besieged by insurance companies trying to counter my original argument that O2 tried to rip me off when I bought my first iPhone – as a result I can no longer vouch for the objectivity of any of the comments here!

  • Gillian
    Tuesday 10 February 2009 - 15:02 | Permalink


    hi mark
    I dont understand why iphone dude is getting so abusive I only made a comment on my findings and i was pleased to find your site and read your comments.
    I have just found out another interesting thing when you tak out an iphone from 02. you cannot get billed for the account so you have set up a standing order pay throught the 02 web site or give a card over the phone. I just hope this I phone is worth it. I also was told by 02 that no one would phone me offering me £5 a month insurance from 02 itself gosh I must be hearing things in my old age and I wonder who gave my number out to another insurance company NOT

  • Tuesday 10 February 2009 - 15:04 | Permalink


    Mark,

    My comment was not comment spam. Your commenting system asks for a website so I gave it. I put my name as “iPhone insurance dude” because that
    a) Displays my cards in openness, and
    b) Succinctly outlines what I do.

    My name is Simon. I run the site at http://www.iphoneinsurancecover.co.uk as an affiliate of 2u. It is the same policy that Talk Cover and other 2u affiliates offer underwritten by Equity Redstar – they are all the same polcy ultimately.

    It is not comment spam to contradict the original post if the original post is ignoring alternatives. All other sites who have commented here including Talk Cover and 2u have given valid and valuable comments, help and pointers to people.

    I refer you to my comment earlier today (which you accused of being comment spam). My comments were valid. The O2 policy at £10 is ridiculously overpriced and is blatantly taking advantage of having a cornered customer who knows no better at the point of sale.

    For this reason I suggested using Google to do some research (note in fairness I did not push people to my site). In Google you will find a number of alternatives.

    Mark, you run a good blog which has value. I understand you are trying to protect it but please dont ruin your blog by falsely accusing your visitors and commentors (who are adding to and building up your blog content) of things which are not true.

    Structured suggestion:
    If you are concerned about some questionable commentors using your blog for linking purposes, why not remove the option to add their website? Why not remove the “Website” field?

  • Tuesday 10 February 2009 - 15:11 | Permalink


    Gillian,

    My apologies – I in no way intended that to be aimed at you personally – rather at O2 (as I answered to Mark’s comment). It was not intended to be abusive to you rather my personal dismay at O2 and Carphone’s continued questionable selling practices – even after Carphone got found out for dodgy selling of iphone insurance in the TV show ‘Watchdog’.

    I have just re-read my earlier comment – and yes, I admit – it does rather sound like I am talking to you personally :( Sorry – so please accept my apologies and consider my comments redirected at those selling iphone insurance at £10 !

  • Gillian
    Tuesday 10 February 2009 - 19:15 | Permalink


    hi iphone insurance dude

    Apology accepted. so you think talk cover is ok insurance for my iphone?

  • Ashley
    Tuesday 10 February 2009 - 19:23 | Permalink


    Hi, I just saw your post after I googled about iphone insurance, I bought an iphone today and was conned into an £11 a month deal with geek squad, I refused at first and he played on my insecurities about damaging etc.

    I am going to go back to carphone warehouse tomorrow to cancel this scheme because I think its too much money. Will it be a big deal to cancel?

  • Tuesday 10 February 2009 - 19:28 | Permalink


    @Ashley – it’s my understanding that you should have a cooling off period (I think it’s 14 days) with any new insurance policy, so your policy with Geek Squad should be fairly easy to cancel.

  • Ashley
    Tuesday 10 February 2009 - 19:39 | Permalink


    Ah thats good, thanks. The guy in store said that I could cancel at anytime which is the only reason I went for it, it was only when I thought about it at home (and when I mentioned it to my mum how much it was) that I realised it was a rip off! I’ve had my itouch for over a year and not a scratch on it (I did drop my last phone at new years and broke it – but I think I’ll be more careful with an iphone)

  • Tuesday 10 February 2009 - 19:48 | Permalink


    Yes – by Financial Services Authority rules – and ALL insurance providers must be authorised and regulated by the FSA or they are breaking the law – the cooling off period is 14 days.

    I do know that 2u will cancel and refund any policy within a month – for the simple reason that the FSA have a huge amount of power over any business it regulates and frankly, any sensible FSA-governed business will keep the beast content!

    There are 2 questions within what you ask;

    1. Can you get a refund?
    2. Can you cancel the contract?

    The answer is yes to both according to FSA rules, within 14 days.

    All the Equity Redstar underwritten policies (2u.co.uk, Talk cover, iphoneinsurancecover.co.uk and the like) are all without 12-month contract, so can be cancelled at any point on a monthly basis.

    Gillian

    I did outline in a post earlier today which hasn’t been published yet that the Equity Restar policies are the same (talk cover, 2u.co.uk, iphoneinsurancecover.co.uk etc), and most of the sites you will see are resellers for 2u.co.uk, so yes, talk cover is a viable option as are the others underwritten by Equity.

  • Pengranger
    Tuesday 10 February 2009 - 21:35 | Permalink


    Your blog has certainly attracted a lot of attention. How about an alternative low(er) cost view?

    If you have a bank account which you have to pay for each month, you are likely to have mobile phone insurance included as part of the deal. Most will also cover the iPhone as standard.

    Most people have home insurance. If you do, check whether it covers your personal possessions whilst outside of the boundaries of your home, and check whether you would receive the full value of an item claimed, or the receipt value e.g. if you paid £60 for the phone, you would only receive £60. The cover is normally called C&PE or All Risks. This wouldn’t remove the risk of unauthorised calls, but if you put on the phone lock and SIM card lock, the risk of someone else using your airtime is significantly reduced.

    Oh, and by the way, if you’re a bit clumsy, but a nice protective case. I’ve seen many 3G iPhones with smashed screens and they’re not a pretty sight!

  • Tuesday 10 February 2009 - 21:57 | Permalink


    @iPhone Insurance Dude (Simon) – firstly, please let me apologise for your earlier post not getting through. It was identified as spam by the software that I use to save me from wading through hundreds of spam comments a week. I’ve now unblocked it.

    Secondly, to let me address the issue of comment spam. I try very hard not to do anything in comment moderation that will affect the natural flow of comments; however the rules for comments (a link for which is displayed above the comment fields) clearly state that:

    “Things that will lead to comments being edited/deleted include:

    […]

    Blog-spam of any kind (even if your comment is relevant, I reserve the right to remove any link to your site if I consider it to be blog spam).”

    The point there is that it’s my decision on whether a comment is spam and on the action to take. It’s unfortunate that you saw my decision as falsely accusing you; and in fairness I’ve let other comments through on this post before, that puts me in a difficult situation here. For that reason I have restored the links. You are absolutely right in openly displaying your affiliation – I thank you for this and I appreciate this is different to many of the blatant comments that I do receive each day that, frankly, drive me up the wall and make me wonder if its worth continuing the effort that running this blog has become.

    I also welcome your constructive suggestion; however the website field is there for the many people who comment on the various (more technical) posts on this site and whose links add to the process of finding and retrieving useful information on the ‘net – a process from which I benefit in my work and to which I give back through the information on this site. If I remove the field, then it’s gone for everyone, and reciprocal links are what keeps the Google juice flowing. Indeed, it’s links like that which have helped my site to become more prominent in the listings.

    @everyone, I think the key point that Duncan, Rob and Simon make is that there are third party insurance providers who will offer a much more cost effective policy than O2, CPW and others. I cannot comment on the levels of cover; and I’ve already made it clear that I personally would rather take the risk of losing or damaging my phone than take the insurance. Not everyone will be comfortable with that level of risk and so you may consider that taking a policy out is the right thing for you to do.

    Finally, I should note that the terms and conditions referred to in this post are from my original iPhone contract. Things have changed with the iPhone 3G (which is part-subsidised by O2) and so the cost to buy the phone on a contract is not the same as the cost to replace the device. For that reason, you might consider that insurance is a more compelling offer on an iPhone 3G than I considered it to be with the original iPhone.

  • Gillian
    Tuesday 10 February 2009 - 23:33 | Permalink


    Hi All

    Well I have gone for talk cover it cost £52.82 to cover my iphone for a year.

    I have an idea and I was wondering what you think. It seems a lot of people are wanting to insure their phones but a bit cheesed off with mobile companys insurance scams. How about a block booking on say talk cover so for every 10 people you send them Mark talk cover gives them a discount or maybe you something (how about an Iphone for a year).
    Just a suggestion because I think this site is good and I think people trust your views.
    Gillian

  • James
    Saturday 14 February 2009 - 0:46 | Permalink


    Hi Mark,

    Fantastic blog but I’m still really confused about what I should do in order to resolve the particular dilemma I’ve found myself in so I really hope that you can help!

    About two months ago I took out an 18 month contract with O2 on a 3G iphone which I paid approx. £150 for! At the point of sale I was offered the option of taking out insurance, however, when I asked the shop assistant exactly how much it would cost me to replace the phone if I didn’t take out the £8pcm insurance policy being offered I was told that it would basically cost me about the same price as I was paying for the phone, ie, another £150! As I considered the risk/reward exposure to be relatively small I declined the offer. Just under two weeks ago I accidently casued water damage to my phone. I took it along to apple to see if they would repair it but they basically said there was nothing they could do with the phone, they advised that in order to replace the phone it was going to cost me approx. £350 and becasue of the fact that I’d taken out a contract with O2 I had to deal with them directly.

    So. I currently have no phone! I still have approx. 16 months left on my contract with O2. I’ve resigned myself to having to pay approx. £350 for a new iphone if thast’s what I want to do, however, how on earth do I make sure that going forward I have the phone insured if I place my original contract sim card into it? O2 advise that their insurance would be invalid if I didn’t use the phone wth the actual PAYG SIM card being sold with the new phone and it appears that the policy being offered by Equity wouldn’t work either. All I want is a new iphone and pay a reasonable amount for insurance, allowing me to benefit from the £35pcm I’m contracted to pay O2 but would mean going forward I wouldn’t have to fork out another £350 ever agian! I guess I could check with my bank per the advice from pengranger but I definitely don’t want to start playing around with my contents insurance policy.

    I’m sure this situaton must be quite common so I’m absolutely amazed that O2 can’t offer me a solution without putting me in a compromised position.

    Can anyone offer me a solution to this apple nightmare?

    Many thanks,

    James

  • Saturday 14 February 2009 - 1:32 | Permalink


    @James – that’s rotten luck. It’s a shame that the O2 rep you spoke to hadn’t been more clued up (exact opposite to the one who mis-sold me my insurance) because, unlike the original iPhone, with the iPhone 3G the handset is part-subsidised by the network so the replacement cost is higher than the retail price.

    As for your SIM, when I had my iPhone 3G replaced under warranty a few weeks back (by Apple), they transferred the SIM between phones and told me to contact my insurer and tell them the IMEI of the new handset (or else the insurance would still apply to the old one). It would be worth checking the situation with any insurer before taking out cover though.

  • Saturday 14 February 2009 - 7:49 | Permalink


    You can source your own iPhone replacement and get a cheaper iPhone insurance to cover it (my site “iPhone Insurance Cover” or another Equity policy are the cheapest – and that is not personal bias – the Equity policy is the cheapest).

    You *can* get an iPhone on eBay but our insurance specifically cannot cover items brought on an auction site (even if you bought it new there – there is no decent way to discern between an eBay second hand product and an eBay new item – and we cannot cover second hand items).

    If you get your replacement from a shop and have a receipt for it there is no reason you shouldn’t be able to insure it (although obviously O2 wont be happy to).

    The reality is that the price for a new iPhone, no matter which reputable store you buy it from, you are looking at over £300.

    BUT once you have it you should be able to cover it after you have bought it. You will just need a receipt or invoice as proof of purchase.

  • Saturday 14 February 2009 - 7:58 | Permalink


    Oh – and FYI – if a customer of ours changes their phone during the insurance policy, all they need to do is contact us with the new IMEI to continue the same policy (which saves you having to cancel the old and set up a new policy)

  • Oliver
    Tuesday 17 February 2009 - 12:04 | Permalink


    I’ve spent a lot of time researching these alternative, cheaper iphone insurers. There are a number of dubious reviews on ReviewCentre that dont speak too highly of custom services, the claims process and very specific T&Cs that make me cautious. I was also suprised to get a call the first day I had my iphone from an insurer with a very dodgy website (see http://www.theregister.co.uk/2005/01/20/cpw_phone_insurance/). All of which makes it very difficult to decide which policy to buy.

    I’ve just cancelled my Geek Squad cover (very quick and easy to do over the phone) because it certainly is the most expensive. Hoping to get the O2 insurance for £5 when I speak with them later.

    Would certainly consider the other insurance companies who have posted here – if someone with first hand experience of their customer service / claims process could comment. However, there seems to be an active practice of competeing companies commenting (covertly and overtly) on review centre and other articles i’ve read which makes getting accurate, trustworthy reviews necessary to make an informed decision difficult.

  • Duncan Ritson-Elliott
    Tuesday 17 February 2009 - 18:31 | Permalink


    Believe it or not, I actually have personal experience of our own claims process! I had to claim about 18 months ago when I jumped into the paddling pool with my kids. Important point – I did NOT pull rank in getting the claim sorted – I used the usual claims channel and had a new one back within 48 hours. I wrote the whole thing up for our affiliates if you want to read more about it at
    http://www.2u.co.uk/my-mistake.php (remember this page was written as a message to our affiliate resellers hence the wording at the end)

  • justin
    Tuesday 3 March 2009 - 18:54 | Permalink


    Sorry if this is slightly off topic but it is somewhat related, and didnt want to start a new thread.
    When i bought my i phone from C.P.W i took out their lifeline insurance at £40 per quarter, after much sales pitch and scare tactics. Also on the understanding i could cancel my insurance cover at any time and that after 6 months my insurance cover would buy out my remaining contract. Have now heard conflicting reports over this last comment. I was also told that this was the only insurance i could get for my iphone and that i was likely to recieve a phone call from a company offering me cheaper iphone insurance, and to ignore it as it was a scam but there would be no need to report it as 02 were aware of this and were investigating the matter, and so was told just to decline the offer even though it worked out just over half the price of lifeline cover.
    Can anyone confirm if i would have to wait six months before i could buy out my contract (18 months) with said insurance cover, and is it possible to cancel lifeline cover and get insured with an alternative company for less.
    I have had my 3g i phone for over 4 months now

  • Tuesday 3 March 2009 - 19:25 | Permalink


    Justin,
    You would have had a 14 day cooling off period during which you could cancel the policy but after that I guess it comes down to the terms and conditions you have signed up for with CPW. It does seem odd that the policy would let you buy your way out of an iPhone airtime contract unless the handset was stolen.

    I’m afraid you may find that NTW’s earlier comment was true…

  • Pengranger
    Tuesday 3 March 2009 - 20:56 | Permalink


    Justin

    It is true that after 6 months the CPW cover does allow for you to be bought out of airtime contract. You do have to surrender the phone if you take the option. I believe it is often used by CPW staff so they can get new phones on a regular basis.

    As for other organisations which may contact you, this is true. A recentish episode of BBC Watchdog gave an insight into the scammers who operate out of Swansea. Not all companies are like this though, but you would have to consider how they would know they knew you had just bought a phone!

    Whilst other cover is cheaper than CPW, their claims process is normally completed in their stores. It can be very effective. If you can afford it stick with CPW. Next step I’d consider whether you already have, or could have, cover through your current account. Alternatively, unless you really need airtime abuse cover, consider covering it on your household insurance.

  • Tuesday 3 March 2009 - 22:36 | Permalink


    Well, maybe I wrote CPW off a little to quickly there… thanks for the feedback Pengranger.

    Incidentally, in a private e-mail conversation, one of the insurance providers (who will remain anonymous) told me this (and was happy for it to be repeated here):

    “The call that Gillian received is common unfortunately. The caller pretends to be from O2 and states that person is in line to receive a discount from the current £10 insurance premium they are paying to around £5. In fact what is happening is that an unethical insurance sales agent is cold calling possible iPhone telephone numbers and selling them a new policy, taking new payment details. They then mention at the end of the call the fact that they will have to cancel the current policy with O2 – if they do not do this then they pay for 2 policies. Whilst the customer may actually end up with an insurance policy that is cheaper, the route taken is unethical, if not down right immoral.

    Unfortunately many do not care…”

  • Avalon34
    Wednesday 11 March 2009 - 19:19 | Permalink


    Hi All

    Just so you know , I work in the home insurance sector …In rating actually and a single claim on your home insurance for approximately the cost of say an iphone will rarely make more than a minimal difference to next years premium. Inflation will hit you harder than the 0.5% to 1.5% load you’d get for an iphone. However as soon as you get into the realms of multiple claims it is going to start to hurt a bit

  • Hannah
    Monday 16 March 2009 - 9:38 | Permalink


    Has anyone apart from Duncan Ritson-Elliott had first-hand experience with TalkCover or any other of these phone insurance companies?

  • Pengranger
    Monday 16 March 2009 - 20:54 | Permalink


    Hannah, I have. What do you want to know.

  • Hannah
    Wednesday 18 March 2009 - 21:19 | Permalink


    Well, to ask how it was really. Have you tried to claim? Are there any catches?

  • Pengranger
    Wednesday 18 March 2009 - 23:00 | Permalink


    Dealing with any insurance business can be difficult. I now tend to stick with established brands who I know will be around tomorrow.

    After looking at the TalkCover website, it is very unclear who the seller of the insurance actually is. TalkCover doesn’t actually exist – it’s a trading name of [Name removed on request]. After checking on the FSA register, they are an Introducer Appointed Representative of Supercover Insurance Plc. To sell this type of insurance product you need to be a full Appointed Representative of the principal firm, not an Introducer. I’m not totally convinced that the TalkCover is selling within the current FSA regulations. The policy is however provided by a major UK insurer.

    Every claim is dealt with on it’s own merits. It’s impossible to judge whether a claim would be accepted. It’s not clear who actually handles the claims, however the responsibility ultimately lies with Equity Red Star. Many policies of this type try to find any way possible to reject claims.

    It is likely that every policy will require you to provide the proof of purchase at the time of the claim. Make sure you keep it safe. The handsets sent as replacements can be refurbished, not brand new. Tiered excesses can get expensive. Some of the exclusions e.g. “If the original SIM card was not in a mobile phone at the time of the loss, damage or theft.” are ambiguous. One of the exclusions has now effectively been outlawed by the the FSA , and the claim notification requirements have already been deemed “unfair” by the FSA. Where they state claims are accepted within 48 hours, you have to ask “within 48 hours of what” – you notifying a claim? or the claim being accepted? The wording is very ambiguous.

    I’d say you pay for what you get.

    By the way, I’d ignore the battery and upgrade offer – it’s not worth the paper it’s written on.

  • Thursday 19 March 2009 - 0:52 | Permalink


    BTW, there was a piece on a recent episode of the BBC Radio 4 Moneybox program about an insurance scam with cold calls (mostly originating from the Swansea area) selling iPhone insurance to people who have just purchased an iPhone – a report is available on the BBC website.

    I’m not saying that scam is associated with any of the insurance providers listed on this page – just that it’s something to be aware of.

  • Martin
    Friday 27 March 2009 - 13:48 | Permalink


    Hi, I’m going to get an iPhone on an 18 month contract but I think the £10 O2 Insurance is too expensive. After reading all the posts in this blog I’m probably going to with Talk Cover or 2U as it’s half the price! So I have a few questions…

    If I damage my iPhone and get it replaced will I have to start another contract with O2 or just continue the existing contract?

    I’m asking this because I’ve read that you have to take out a new contract for 18 months if your phone is replaced without insurance. I’m not sure if this was in the old O2 Terms & Conditions. I’m a bit concerned about having two contracts or one really long contract?
    Is more importantly, will I have to pay two lots of £35 per month or just one until the contract(s) runs out?

    Also, if I have to make a claim, will an insurance company liase with O2 on my behalf and deliver a new phone to my door, or will I have to do all the work? (I’m hoping someone from TalkCover or 2u is reading this.)

    Sorry Mark for putting this here but I thought it was the best place to get impartial advice…and would be useful for everyone to know the process. :o)

  • Friday 27 March 2009 - 14:38 | Permalink


    How it works for all our iPhone insurance policies (from iphoneinsurancecover.co.uk or 2u or any 2u affiliate or any Equity Redstar underwritten policy) is as follows:

    Assuming your iPhone is stolen, lost or beyond economical repair, you will get a new O2 iPhone handset. You then simply put your existing SIM card (chip) into this new phone and away you go. That is basically it. You continue with your previous number and contract and monthly bills etc – all that remains the same. You are simply getting a new O2 iPhone handset.

    (Martin this next bit wont apply to you, but for others using an unlocked iPhone…)

    Note: The new iPhones are supplied locked to O2. If you previously had an unlocked iPhone and were using it on a different network, you will either need to go onto an O2 SIM or get the phone unlocked yourself.

    As an example, only this week (!!) I dropped my iPhone into my kids bath and only realised after a while, so it was dead. I previously had an unlocked iPhone, using my T-Mobile SIM. I claimed on our own insurance system (without pulling rank because I wanted to mystery-shopper test the system) and got my new iPhone within 48 hours of making the claim. It is brand new and locked to O2.

    I made the decision that I could not be bothered with the hassle of unlocking it (I did this before and it is a bit of a chore) so I have opted for a SIM-only contract because that is then much cheaper.

    Anyway, to answer your question, if you need to make a claim with our insurance you do not need to start a new contract again.

    You will not need to liaise with O2 once you get your new handset other than to register the new IMEI serial number if you want, purely for their records, but that is not mandatory. Your O2 SIM will simply work once you put it into your new O2 iPhone.

    I hope that answers your question.

  • Liz
    Sunday 29 March 2009 - 22:51 | Permalink


    Sorry if I’m being dim, but re. above comment how can you “simply put your existing SIM card into the new phone” if it IS lost or stolen.
    Daughter wants an iphone but is not dreadfully careful so insurance is a must……the above comment was really helpful other than if you have lost the original phone with its sim how do you get a new one?

  • Monday 30 March 2009 - 10:03 | Permalink


    The SIM card can only be replaced by your network because it is unique to you from them ie it has your mobile phone number and details registered to it.

    So you would get the SIM replaced from O2. I have just called O2 for you and here are the details:

    Your first replacement SIM card is free.

    Thereafter a replacement from O2 over the phone and delivered to you is £10.

    Or you can get a free SIM replacement from your local O2 shop which will be a ‘blank’ SIM. You then phone O2 to register it to your account which attaches it to your phone number.

    You can then put this SIM into your replacement iPhone.

  • Liz
    Monday 30 March 2009 - 19:34 | Permalink


    Thanks,thats really helpful……not had a contract phone before just monthly SIMS so wondered how it works.

  • sbcreative
    Sunday 5 April 2009 - 18:59 | Permalink


    Just a query to put to iphone insurance dude.

    If I’ve took out the 24 month contract and want to purchase the upfront yearly payment after the first year is up can you pay another yearly fee for the coming year or because the phone is a year old you can’t purchase another year?

    Great blog and info btw mark, cheers

  • Monday 6 April 2009 - 8:43 | Permalink


    You can always continue an existing policy, no matter how old the phone.

    If you already have insurance with us then any continuation is seen as continuation, not a new policy, so that is OK.

    So long as you get your iPhone insured within the first 6 months then maintain continuous cover then you can carry on as long as you need.

    So if you get insured with us, after the first year, you can renew your policy

  • Ali
    Sunday 12 April 2009 - 22:17 | Permalink


    hi,

    i had bought an iphone last month as well, was mis-sold the insurnace, the 02 rep had told me that i have to take it with 02,

    & it cost me £10 per month, guna cancel the insurance with 02,

    I found few other companies doing iphone insurance for £4.99 or an anual fee about £54.00 lump sum.

  • Nick H
    Sunday 3 May 2009 - 11:22 | Permalink


    Please…everyone out there. Do not use Talkcover. From bitter experience, they are rotten.
    And all that talk about replacing a 2G with a 3G (Rob [M******], Nov ’08)…well, that’s just lies.
    I had my 2G stolen late last November – and I was told they wouldn’t replace ‘any’ iPhone handset as they didn’t get provided with them by Apple (something they neglected to tell me when I took out the insurance). They didn’t replace my handset, they just sent me back the original cost of my iphone – which didn’t cover the cost of a new one. So I was left ‘dumped’ without a handset of any sort. There were no 2G handsets around anymore and I couldn’t afford a new 3G handset – so had to go back to a Nokia.

    Talkcover’s service was terrible. The process took ages. And they don’t provide you with replacement iPhone handsets. They were devious and I would warn people to stay away.

    I work as a marketing consultant and I think it’s sick how companies in the telecoms sector flaunt the words ‘customer care’ or ‘customer service’. It’s a joke.

    This should be a an age of transparency, honesty and trust.
    Not tying people into unnecessary 18-24 month contracts, hitting customers with hidden costs and some deceitful insurance companies with their mis-direction.
    These bad practices will change over the next 5 years thank goodness – and they will change due to the pressure of companies delivering ‘good practice’ outside the telecoms sector.

  • Ed
    Tuesday 5 May 2009 - 12:53 | Permalink


    Thanks for the heads up Nick…I was going to go with TalkCover but will have to put some more thought into it I think.

    Has anyone had any good experiences with third-party iPhone insurance companies? Or any others I should watch out for? I just can’t bring myself to pay £10/month…

  • sajid ali
    Tuesday 5 May 2009 - 14:16 | Permalink


    hi,

    people you can get FREE iphone insurace with barclays banks, if you have one of ther accounts,

    :-)

  • Wednesday 13 May 2009 - 22:37 | Permalink


    @Car Insurance Dude – as you should know, insurance is a risk-based industry. The risk of getting your car stolen/being involved in an accident relative to the cost of paying out (and administering the policy) is lower (relative to the value of the item) than it is for getting your mobile phone stolen and somebody running up a big bill.

    Also, here in the UK, even a low risk driver (e.g. a 35-year old woman with a clean driving licence and full no claims, driving a family hatchback) would pay more than the $500 you quote for car insurance.

    @Everyone. The original article was about O2 ripping me off with their overpriced insurance but now the comments on this post have got out of control. There are comments here that are accusatory (I’m not sure if Rob M****** has had the opportunity to approach Nick H directly), some that are just plugging alternative insurance policies, and I’ve even been approached to set myself up as a 2U affiliate (it’s tempting, but probably won’t do much for my perceived impartiality).

    As the primary purpose of this website is a technology blog, I’m not sure that moderating these comments is a good use of my time, nor is it relevant to my normal readership’s interests.

    Consequently I’m leaving comments open for a few more days, in order to allow those who haven’t said their piece to have a chance, then I’ll be removing the ability to leave further comments on this post.

  • Car Insurance Dude
    Wednesday 13 May 2009 - 22:16 | Permalink


    Phone insurance, unlike car insurance isn’t necessary or required when you buy your phone. It’s frustrating that even though you have to pay $10/month for the iphone insurance, you also have to pay a considerable deductible. Think about this – a deductible for car insurance is $500 whereas for an iphone, it’s $100. These numbers are totally out of whack. An iphone deductible should be $25 or less!

  • Thursday 14 May 2009 - 7:12 | Permalink


    One of the primary reasons for an excess fee is to put off pointless or fraudulent claims. This is particularly true of iPhone insurance – the fraud-claim rate is comparatively higher than in other areas.

    ie situations where the person wants to get a new iPhone or wants to sell their old one so makes a claim on the insurance. This is completely illegal and is insurance fraud but it does happen. The excess fee helps to discourage this.

    So the excess fee is designed with this in mind, to discourage fraudulent claims.

  • Rob M******
    Thursday 14 May 2009 - 9:02 | Permalink


    @Mark – thanks for the opportunity to respond, the administrators have not been able to trace Nick H from the few details given. I’ll try to keep it brief.

    @Nick H – As has been said before the merit of any claim is decided on an individual basis. It appears as if you have been badly let down however as you should have received a replacement if your claim was approved. If you would email me on my direct email ( [email address removed on request]) I’ll be happy to look at your claim to see how we can assist. Whilst the administrators sometimes give a cash payment when it is easier for the customer to obtain a replacement handset than it is for us to obtain one, the objective is for the customer to obtain a replacement, not be stuck unable to afford one. I cannot really comment further without knowing the details of your case, but I said, email me and I’ll be happy to look at it.

    @Pengranger – TalkCover is an Appointed Representative of Supercover Insurance Plc, not an IAR as you mistakenly stated, and is fully FSA compliant. This can be checked at http://www.fsa.gov.uk/register/.

    @iphoneinsurancedude – TalkCover policies are now underwritten by Fortis Insurance, not Equity RedStar, and so are not the same policy you resell.

  • Mark Roberts
    Thursday 14 May 2009 - 11:55 | Permalink


    Hmmmm, I took out iPhone insurance with 2U.co.uk – £52.92 for a years premium, happy days.
    Only to get no email communication – allthough I had noted down the ref no and phone number. I emailed them a few days later and had no reply so finally called the number supplied. After being on hold for a while, I finally got through and was told “there is an error”… we’ve only received payment for the first six months. I explained the deal I had on the internet. She said she could take the rest of the premium there and then. £35 something.

    After finishing work and checking my online banking I saw £52.92 had indeed come out of my account to 2U.CO.UK as well as the £35 to Supercoverinsurance. Back on the phone (naturally not a free phone number) after an even longer time on hold I got through and was told “you’ll have to prove that you’ve paid the £52.92 by sending us your bank statements as we’ve not received that”.

    I was left bemused, baffled and slightly annoyed by the experience and at a bit of a loss as to the difference between supercoverinsurance, 2u.co.uk and Mobile Phone World LTD. – Can anyone help or shed light on the whole mess? Thanks in advance

  • Duncan Ritson-Elliott
    Thursday 14 May 2009 - 15:17 | Permalink


    @Mark Roberts. You ordered at a time when we had just begun the process of changing over to the new system of offering the discount and unfortunately you ordered before we had the email system fully up to notify you of your order. I understand that 6 days after ordering you are making an insurance claim, which the Administrators are looking into.

    For clarity:
    2u is owned by Mobile Phone World Ltd who are authorised and regulated by the Financial Services Authority. Supercover are the administrators for the 2u insurance. They do a good job at administering the insurance effectively and processing legitimate claims effectively. Supercover do the administration for all such Equity policies as well as the Fortis / Talkcover policies. Either way, it is a sound policy.

    @[Rob M******] The Fortis policy is pretty much word for word the exact same as the Equity policy. It was split/changed for political and admin reasons. Otherwise the Fortis policy is the same cover and the same Terms as the Equity policy.

  • Mark Roberts
    Thursday 14 May 2009 - 16:22 | Permalink


    @ Duncan Ritson-Elliott Thanks for the clarity re the companies. I’m not attempting to claim on my insurance – I was simply ringing up to clarify whether the transaction had gone through and to see if I was covered. My concern is that I’ve been charged £52.92 and then a further £35 something due to supercover telling me there was an error – which I’m assuming there wasn’t as U2.CO.UK charged me the full £52.92. So now supercover are telling me that I have to send details of my transactions in to them to claim back the £35 that they charged me incorrectly….That and being on hold for in excess of twenty minutes.

  • Duncan Ritson-Elliott
    Monday 18 May 2009 - 11:24 | Permalink


    @ MarkRoberts
    Apologies for the confusion. A colleague has emailed you directly with more specific details than I will not publish here for your own privacy. Suffice to say – wires were crossed when you called – and the full refund is being processed for the overpayment of the £35. You are covered and have paid for the whole year.

    Thanks

  • Mark Roberts
    Monday 18 May 2009 - 20:22 | Permalink


    @Duncan Ritson-Elliott. They have and thanks for help sorting this out. Cheers!

  • Nick H
    Wednesday 27 May 2009 - 13:22 | Permalink


    An update on my earlier post…

    …just to say that after being invited to contact Rob [M******] (Talkcover) over my ordeal, I dully did.
    Rob was actually very helpful and looked into my circumstances.
    Whilst the person who originally dealt with my claim had moved on – he accepted that I had been unfairly dealt with and went about repairing the damage that had been done by recompensing me.

    I can only say that the guy was genuine and very helpful. Maybe Talkcover aren’t that bad after all. Maybe I just got unlucky with a certain operative.

    My feelings have changed.

  • Wednesday 27 May 2009 - 21:40 | Permalink


    OK guys (and girls) – thanks for all the contributions to this discussion. As previously notified I’m now closing comments on this blog post.

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