Smartphones sell like hotcakes these days and you may have been one of the expectant iFans that awaited the new iPhone model like a nervous father in a maternity ward. But after the hype has calmed down and you’ve finally got your bundle of joy back home, what happens if (or most likely, when) you lose or break it?

Insurance brokers have seen many scenarios of mobile phones falling victim to theft and also heard more colourful claims that have become common; dropped into the toilet, fell into the pool, left on the roof of the car, back of the taxi, and even one case of ‘lost while invading the pitch’ at an AFL game.

So where do you stand in the event of a lost or damaged phone? If the handset is on a monthly plan, the standard reply from the Telco’s is that you would have the option to upgrade at your own cost, unless you had insurance cover as part of your contract with them. Telco’s are keen to push mobile phone insurance cover for around $10 a month but like any policy there are exclusions, namely, no cover if left unattended and most ask for their own repairer to inspect.

Many of us would have also had the misfortune of a cracked screen. In this case it’s an issue of cost of repair vs. the policy excess under a home or business policy.

Some insurers take a different stance, but a common requirement is that the phone must be inspected and considered beyond repair to be replaced. A specialist insurer for laptops, phones and mobile equipment advised that settlement is based on like for like replacement. In instances where the phone has been superseded they base settlement on the next available model. They insure the handset only, so they make no judgment between a phone owned outright and a phone on a plan.

The Telco’s offer cover with limitations, however, one point in their favour is insurance against misuse of a phone so the cost of unauthorised calls may be included in the claim up to a few hundred dollars.

With Australians being some of the most prolific mobile phone users, and our teenagers and even younger children being major users, the ‘number of users’ trend in Australia is spiraling upwards. It might be a good idea for those responsible for the bill to consider what phone insurance is right for them.