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Wealth Management

MOBILE PHONE INSURANCE: DO YOU ACTUALLY NEED IT?

To insure or not to insure? It’s a question most of us face when purchasing a new mobile phone. Typically, there are two outcomes – you either take out any old policy without checking the cover your phone already has, or bury your head in the sand thinking “I won’t need insurance. I’ll be careful, the insurance company wouldn’t pay out anyway”. However, neither is a practical approach.

With prices for Apple’s latest iPhone 11 Pro starting at a whopping £1,149 if bought outright, leaving a smartphone uninsured in this day and age is a huge gamble; especially if you have a history of carelessness.

Despite this, 74% of smartphone owners haven’t bothered to take out mobile phone insurance. Is this a well justified choice? Or do we simply lack the insight to make such a decision?

We’ll help you decide whether mobile phone insurance is the right move for you.

What Does Mobile Phone Insurance Cover?

What’s offered as part of a standard phone insurance policy compared to full cover will differ depending on the policy provider. Be sure to read up on what’s actually covered before taking out insurance with your chosen provider, so you fully understand what you’ll be protected against. Typically, most policies will cover the following:

Phone accessories: E.g. headphones, chargers or USB cables. This might also include a replacement phone battery, but check with your provider before making a claim.

Worldwide cover: Policies can extend to overseas travel, should your phone get damaged, become lost or stolen while broad.

Cracked screens: In the last year, over half of Brits have smashed their phone screen within the first month of owning it. If your insurance includes accidental damage cover, it’ll cover the costs required to repair or replace a cracked screen.

Digital download: Although uncommon, you might be able to get protection against any lost digital downloads, such as movies or apps on your phone if it’s lost or stolen. However, you will have to prove they were purchased through a commercial store, e.g. iTunes or Google Play – anything that’s downloaded illegally will not be covered.

Lost device: Accidentally left your phone somewhere and can’t get it back? Your phone insurance might cover this and provide the same model or one that’s similar to the one you lost.

Theft: 70 million smartphones are stolen a year, with only 7% ever recovered. Phone insurance can cover the cost of a new phone if yours is stolen. This might also allow you to claim against any fraudulent spending that occurred after your device was stolen within a set time frame. E-wallet or digital wallet protection can cover you for unauthorised contactless payments.

Water damage: Did you know around 11% of smartphones are damaged by water each year? This’ll protect your phone against accidental liquid damage, if it’s splashed or dropped in water for example.

What are the Policy Exceptions?

At face value, you might assume phone insurance will protect your device against any scenario. However, like any insurance policy, there are always exceptions. On average, insurers will reject four in ten mobile phone claims, so it’s vital you’re aware of what you might not be protected against. This can include:

Carelessness: Your insurance company can refuse to pay out against a claim if they believe you didn’t take reasonable care to protect your phone. For example, if you drove off with your phone on the roof of your car, this would be viewed as a careless mistake on your part.

Not immediately reporting your phone as lost or stolen: Make sure you report your phone missing as quickly as possible. Some insurers won’t cover the phone if you leave it more than 12-24 hours before reporting it to them and the police.

No replacement phone: If your phone gets damaged or stops working, some insurers will do all they can to repair it or provide a refurbished phone instead of giving a new replacement. This could leave you phoneless while you wait for yours to be fixed, which normally takes between four-seven days.

Theft while unattended: If you left your phone on the seat of your car and it’s stolen, you probably won’t be covered. Be sure to check your policy wording for clarification on theft claims.

No SIM card or not the original SIM card: For example, if you switch providers, temporarily use a different handset or insert a new SIM card, you might not be covered.

Youngsters: That’s right! If you’re a parent trying to insure your teenager’s phone, you might struggle to find anyone who’ll cover their device if they’re under 16, or even 18 in some cases.

Water damage: Yes, although it’s viewed as a standard policy cover, some insurers won’t cover you against water damage as they’ll view that you haven’t taken reasonable care to protect your phone. For example, almost half of water damage phone claims in the UK are a direct result of dropping them down the toilet – a mistake you might not be covered against.

 

How Can I Insure My Phone?

A big gripe we have with mobile phone insurance is the price, as it isn’t always cheap, particularly if you are already paying through the nose for the handset and contract each month. Thankfully, you can get the best price by simply exploring your options. Overall the cost of your policy will depend on your phone brand, model and the level of cover. Here are some of the most common ways to obtain phone insurance:

Home Insurance:

You might be surprised to know that your mobile phone could be covered against your home contents insurance if it’s stolen during a break-in, or your policy includes accidental damage cover for belongings in and outside of your home.

This is a relatively cheap way to protect your phone, but it can get very complicated when you do claim against your home insurance. If you did decide to claim on your contents insurance for your phone, it could increase the cost of your premiums when it’s time to renew. You could also wind up paying heavier excess fees than on a standard phone policy. If price is a big concern for you, it’d be best to keep your mobile phone and home insurance separate.

Home insurance claims can also take a long time to process, leaving you phoneless in the meantime. If you selected the right mobile phone insurer, you should be able to get a new handset straight away.

Network Provider:

One of the easiest and quickest ways to get cover is through your network provider, as many will offer it to you when you purchase a phone contract from them. But with O2’s costing £15 a month for basic coverage, Vodafone’s priced at £13.50 and EE’s starting at £8, you could be spending up to £360 to cover a two-year phone contract. This might not include excess either, or even be the full level of cover.

A cheaper option is to purchase cover from one of the independent firms now offering to insure smartphones, away from the big-name retailers. For example, Raylo provide full insurance as a standard in their subscriptions for the latest iPhone. Once your subscription ends, you simply return your old phone and receive an upgrade to the latest model. This way, you get the most up-to-date phone available, with dedicated insurance included in the package, a saving of £855 compared to the big mobile networks.

Bank Account:

Some current accounts offer mobile phone insurance as one of the benefits, though it’s usually something you’ll have to pay extra for. For example, TSB offer AA Breakdown cover, AXA travel insurance and mobile phone insurance for £9.95 a month; while Halifax’s Ultimate Reward Currency Account provides similar benefits for £17 a month.

If you and a partner share a joint account, it might be worth insuring both of your phone through your bank under one fee. However, they share very similar insurance costs to network providers, so it’s worth evaluating whether you’re getting the right benefits here.

 

What About my Phone Warranty?

If something goes wrong with your phone, the issue might be covered under the manufacturer’s warranty, such as refusing to turn on or crashing. Most phone warranties last between 12 months – two years and you’ll also be covered under the Consumer Rights Act which states the phone must be of “satisfactory quality and fit for purpose”.

However, this will only cover repairs that aren’t your fault; meaning you won’t be able to claim against the warranty if your crack your screen or drop it in water. You’ll also invalidate the warranty if you’ve installed an unofficial version of your operating system.

If you have a manufacturing issue with your phone, you need know who’s responsible. If you purchased your phone via a contract, you’ll have to claim against your mobile network provider. On the other hand, if you bought the phone outright and SIM free, the retailer will be responsible for resolving your problem.

 

So, Will I get Value for Money?

Value for money isn’t just about price. Getting the most out of your insurance policy will depend on your individual circumstances. In general, you’ll benefit from having phone insurance if one of the following applies to you. Remember, these are just guidelines:

Previous history: Look at the experiences you’ve had with your phones in the past. Do you have a history of them being lost, stolen or breaking? If so, insurance would definitely be worthwhile for you.

Lengthy contract: On average, more and more mobile phone contracts are lasting 36 months. You’ll need to be sure that you can care for your phone well enough during this time if you’re not going to purchase insurance.

Replacing your device: Most of the latest models from flagship brands such as Apple and Samsung will now cost you at least £1,000. Think about it, could you actually afford to replace your phone if the worst should happen? If not, you might have to downgrade to a cheaper model.

Reliance: With the average Briton checking their phone every 12 minutes, it’s clear we’re living in an age of smartphone dependency. If this applies to you, insurance would be worthwhile as the policy would cover the cost and provide a replacement. But make sure you choose one that offers a rapid replacement service.

However, if your phone is old and in bad shape, it probably won’t be worth insuring it, as you’ll be paying far too much for what your device is actually worth. This will also apply to those who buy cheap handsets solely for calls and texts, as you won’t be too out of pocket if your phone is lost or stolen – it’s the complexity and features of flagship smartphones that makes them so expensive. Put some money aside for a new phone should the unthinkable happen instead of taking out insurance if this sounds like you.

Deciding whether to purchase mobile phone insurance is a puzzling decision to make, as  when most of us aren’t sure what we’re actually singing up for. However, given the surge in smartphone prices and how accident prone we’ve become with them, getting insurance seems like a no brainer. If you take time to research the providers out there, you’ll definitely find a policy that’s perfect for you.

 

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Wealth Management

THE TRIALS AND TRIBULATIONS OF TRADERS TRADING FROM HOME

HOME

Steve Haworth, CEO of TeleWare Group

Banks had hoped to keep their London trading floors open amid the worsening coronavirus pandemic, insisting traders were “key workers”. But trading floors were quickly cleared and employees sent to work from home in isolation.

Firms needed to quickly adapt to remote working. This meant recreating the carefully monitored environment of the trading floor at thousands of sites.

With major disruption across the entire sector, it seems the Financial Conduct Authority felt no other choice but to relax regulations on recording calls. But does this measure introduce more problems than it solves?

 

Why call recordings are regulated

Whilst regulations differ globally, authorities in the UK, US and Hong Kong have long required trading floor phone calls to be recorded for certain activities.

In the UK, the FCA demands financial institutions keep records of all trades and transactions related to certain types of business for at least six months. Recording calls and reporting trades are essential to the regulators’ ability to monitor the markets for abuse, such as insider trading. Requirements to record calls apply to companies that receive and execute client orders to buy or sell in the financial markets.

Steve Haworth

Each trading floor in a financial firm also has its own set of policies which staff must abide by. For instance, the trading floor manager must ensure that all trade-based calls are recorded and monitored. An often-used policy that still exists is to ban all mobile phones on the trading floor. To enforce this, mobile phones are often stored in lockers and traders are required to use turrets to host calls.

Beyond call recording, most traders and salespeople need to sit together on a monitored trading floor in order to meet regulatory rules. A range of compliance complexities under GDPR, MiFID II and Dodd Frank have meant working from home has simply not been an option for many traders.

 

The rush to relax regulations

Traders are now required to work from home – if they can. The FCA has said it accepts that some scenarios may emerge where recording calls may not be possible. Adding that it expects companies to “consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice recordings.” If financial services companies are unable to record calls they are then expected to “come up with a plan to fix the problem”.

Yet, trading firms have enough problems to solve without having to decipher call recording requirements. Why should traders spend extra time updating the FCA and coming up with an alternative solution when one already exists?

 

A smart alternative

Smart solutions – such as mobile call recording which meet global regulations – have perhaps been overlooked as a way to maintain business continuity.

Mobile voice recording technology (MVR) is not new. It has existed since 2011 and includes secure and reliable voice and SMS recording, easy to use conferencing and robust, accessible voicemail. It has matured over the years and proven itself to be flexible and highly reliable.

Technology can keep traders trading from wherever they are. Ensuring they can operate effectively at home while remaining compliant.

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Business

STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19

COVID-19

By Alex Balcombe, Partner at Harris Balcombe

 

The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.

While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike.  For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.

 

Mixed Messaging

In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.

Alex Balcombe

The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.

How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.

Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.

That said –  don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it –  though those with this cover are unlikely to realise it.

 

How Could I Be Covered?

Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.

To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:

Infectious Disease Extension 

Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.

Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.

However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.

 

Denial of Access Extension (non-damage)

Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.

If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.

 

What now?

It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.

People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.

These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.

 

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