It is an interesting time to be examining the gadget insurance market in the UK. Over the past 18 months or so, it has been the subject of two regulatory reviews, while new developments in mobile technology and related infrastructure continue apace.

In value terms, gadget insurance is one of the smaller general insurance product lines. However, it is widely held. Mintel’s research reveals that millions of British adults have some form of gadget or related mobile phone cover. Being a staple part of the packaged current account proposition, many consumers have policies attached to their current accounts. However, the biggest growth area of recent years is the standalone policy market, which has been boosted by the arrival of a host of new online-only operators.

In this report, Mintel will assess current product penetration and the market’s prospects for future growth. It will also identify the leading players and the issues that are currently occupying them, along with examples of recent innovation. The market analysis is complemented by the results of an independently commissioned consumer survey, which provides a unique insight into the attitudes and behaviours of gadget owners.

Gadget insurance is a general insurance product that covers gadgets against loss, theft, accidental damage and breakdown. Policies can be taken out by individuals, joint policyholders and families.

A gadget is defined as an electronic device that has been designed by the manufacturer to be portable. Generally, it will have its own internal power source, and can be used in or away from the home. Hence, gadget insurance policies cover such items as mobile phones, laptops, tablets, iPods, portable games consoles, digital cameras, camcorders and satellite navigation systems (Sat Navs).

Most gadget insurance policies come with 48-hour replacement as well as worldwide cover, meaning that they cover the gadgets being taken abroad, for example on holiday. In the case of mobiles and smartphones, most policies cover the cost of unauthorised calls that have been made following the theft or loss of the device. Some firms also include mobile phone or online data back-up on registration, so if the policyholder loses their phone or laptop, they still have access to all their important information.

Common exclusions are leaving a gadget unattended or knowingly putting it at risk. Standalone policies typically require the policyholder to report a loss or theft within a certain timeframe (eg 24-48 hrs), to avoid invalidating the policy. However, policies sold as part of a packaged current account tend to be more lenient, allowing the policyholder to make a claim within 28 days of becoming aware of the gadget’s loss, theft, damage or breakdown etc.

Most policies impose age restrictions. Standalone/dedicated policies will typically not insure gadgets if they are more than 12-36 months old (or more than five years old in the case of many policies sold with packaged current accounts). Also, most only insure items purchased new, as opposed to second-hand.

Policies may levy different excesses based on the type and value of the gadget and category of risk. The excess for theft, for example, could be lower than the excess relating to a claim for a lost item.

Mobile phone insurance is a very similar product, except that it is designed to cover exclusively a mobile or smartphone. Hence, for the purposes of this report, it is essentially a sub-set of gadget insurance.

Gadget and mobile phone insurance products compete with home contents insurance. However, most home contents policies do not cover personal belongings taken outside of the home as standard. Usually, this costs extra. Moreover, there are distinct differences in terms of coverage, exclusions, price points and levels of policy excess. Hence, gadget insurance is designed to complement home contents (and personal belongings) cover.

Most gadget and mobile phone policies are sold as add-ons to other products, principally as an insurance benefit included in a packaged current account or as an add-on to the sale of a new mobile, laptop, tablet etc. (Note: in regards to the latter, there is some overlap with extended warranties/service agreements, but these are not the primary focus of this report). The standalone gadget insurance market is smaller, with providers principally operating online.

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