The short answer
Is phone insurance worth it in Australia?
Phone insurance is the cover your telco offers at the checkout, a monthly fee that promises to repair or replace your phone if you drop it, lose it or have it stolen. Here is what the pitch leaves out. It is sold on fear, the dread of a cracked screen or a lost handset, but the maths usually points the other way. You pay a premium every month PLUS an excess each time you claim, and over a typical contract that total often approaches or beats the cost of just fixing the phone yourself. On top of that, Australian Consumer Law already gives you free remedies when a phone fails due to a fault, and you may already be covered by your home and contents policy or a premium credit card. The smart move is a quick break-even calculation, not a reflex tick at the till.
Here is the core takeaway in one line: for most people on a mid-priced handset, the premium-plus-excess total over a typical contract often approaches or beats the cost of just fixing the phone yourself, so phone insurance is rarely the sensible default it is sold as. The common assumption is that cover is obviously prudent. Often it is not, because you are paying twice for a risk Australian Consumer Law and your other policies may already handle, and the two costs of cover (the monthly premium and the per-claim excess) quietly add up to more than a repair. The case flips for an expensive flagship you are likely to drop, but that is a calculation, not a reflex.
Reframe the assumption: phone insurance is not a warranty and it is not automatically prudent. It is an accidental-damage and loss-or-theft product with two running costs, sold against your fear of a cracked screen. The honest question is not "can I afford to be without it", it is "over the term, does the total cost of cover beat what a repair or replacement would actually cost me".
The blind spot
Why most phone insurance advice sends you the wrong way
Most articles about phone insurance in Australia repeat the same three mistakes, and each one nudges readers into paying for the wrong thing.
First, they quote the monthly premium and stop there. A few dollars a month sounds trivial, so the cover looks cheap. But there are two costs, not one: the premium you pay every month whether you claim or not, and the excess you pay on top each time you do claim. Add them across the term and the picture changes.
Second, they blur insurance with warranty. They imply the policy protects you if the phone "stops working", when Australian Consumer Law already gives you a free remedy for a faulty phone. Insurance is really only buying accidental damage and loss or theft, so half of what people think they are paying for is already covered for nothing.
Third, they ignore the cover you may already hold. They never ask whether your home and contents policy or your credit card already protects the phone, so readers end up paying a second time for a risk they are already insured against.
How phone insurance actually works here
Expert analysis: what you are really buying, and what it costs
What phone insurance actually covers (and what it does not)
Strip away the marketing and a phone policy buys you three things: accidental damage (the cracked screen), loss and theft. That is genuinely useful cover, because none of it is protected anywhere else. What it does not buy is protection against a phone that simply fails due to a fault, because that is already covered for free. Mixing the two is the single biggest reason people overestimate the value of cover. Read the product disclosure statement and you will see the policy is an accidental-damage-and-loss product, not an extended warranty.
What Australian Consumer Law already covers for free
Under the statutory consumer guarantees in Australian Consumer Law, a phone that fails due to a fault must be repaired, replaced or refunded by the seller at no charge, regardless of the manufacturer's warranty period. That right does not expire on a fixed date; it lasts as long as a reasonable person would expect the product to last. So you are not paying insurance for fault cover, you already have it. The complaint path is free too: the Telecommunications Industry Ombudsman handles unresolved telco disputes at no cost.
The true cost: premium plus excess over the term
This is where the maths bites. Insurance has two costs, not one. You pay a monthly premium for the whole term whether or not you ever claim, and then an excess on top every time you do. A premium near $12 a month is about $288 over 24 months, and a single claim with a $150 excess pushes the all-in cost past $430. Set that against a screen repair, often a fraction of it, or a mid-priced replacement that may not be far above it, and the premium-plus-excess total frequently approaches or beats simply paying yourself.
Cover you may already have
Before you pay for a separate policy, check what you are already insured for. Many home and contents policies include portable valuables or personal effects cover that can extend to a phone away from home, sometimes as an optional add-on. Some premium credit cards include purchase protection that covers items bought on the card against accidental damage or theft for a set period after purchase. If either applies, a standalone phone policy can be double cover: paying twice to insure the same risk.
When it is genuinely worth it
Cover is most defensible in a narrow band of cases. An expensive flagship where a replacement would be a real financial hit, a genuine history of dropping, losing or having phones stolen, or having no home-contents or credit-card cover to fall back on. In those cases the premium-plus-excess can buy worthwhile peace of mind. Even then, compare the telco's policy with standalone insurers and with self-insuring (setting aside what you would have spent on premiums), and run the break-even before you commit.
Interactive explainer
Is phone insurance worth it for you?
Set your premium, excess, phone value and how long you will keep it. The tool adds up the true cost of cover and compares it to just replacing the phone.
Monthly premium:
Total cost if you claim once
Illustrative only. The comparison assumes a single claim over the term and ignores any excess you would also pay to a home-contents or credit-card claim. Real premiums, excesses and prices vary by product. Source: typical product disclosure statements and consumer guidance.
The same numbers, in plain text
A worked break-even example
Using the tool's defaults: a $12 monthly premium, a $150 excess, a $1,000 replacement phone and a 24 month term.
| Line item | Amount | What it means |
|---|---|---|
| Premiums over the term | $288 | $12 a month for 24 months, paid whether or not you ever claim. |
| Plus one excess | $150 | The fee you pay on top each time you make a claim. |
| Total cost if you claim once | $438 | Premiums plus a single excess: the all-in cost of using the cover once. |
| Versus just replacing the phone | $1,000 | On this mid-priced handset, the cost of cover is most of the way to a full replacement, before counting a screen repair that may be far cheaper. |
What this means in real life
How Australians overpay for phone insurance
The mechanics above are not abstract. They are exactly how people end up paying for cover that does not pay them back:
They pay premiums for years and never claim
Someone takes the cover at the checkout, looks after their phone, and never drops or loses it. Over two years they quietly pay hundreds in premiums for a risk that never materialised, money that would have more than covered a repair if it ever had.
They pay the excess and barely come out ahead
A person finally cracks a screen and claims, only to pay an excess on top of two years of premiums. Once they add it up, the total is close to, or above, what an out-of-pocket screen repair would have cost in the first place.
They insure a phone twice
A household already has portable valuables cover on its home and contents policy, or purchase protection on a premium credit card, then buys telco phone insurance as well. They are paying two providers to insure one phone against the same risk.
They claim insurance for a fault they could fix free
A phone develops a fault, and the owner reaches for the insurance policy and its excess, not realising Australian Consumer Law entitles them to a free repair, replacement or refund from the seller. They pay to use cover they did not need.
The insider insight
Phone insurance is priced to win, not to pay you
Here is the part the brochure does not spell out. Insurance is a business, and a phone policy is profitable precisely because, across all the people who buy it, the premiums and excesses collected comfortably exceed the claims paid out. The premium is set so the insurer wins on average, which means the average buyer, by definition, loses on average. The fear of a cracked screen is doing the selling; the numbers are doing the opposite.
The non-obvious truth: for a mid-priced phone, you are often better off being your own insurer. Take the roughly $12 a month you would have paid in premiums, set it aside, and after two years you have around $288 banked, with no excess to pay and no fault risk to insure because Australian Consumer Law already covers faults free. If you crack a screen, you pay the repair from that pot and keep the difference. The winning move is to insure only the rare, genuinely catastrophic loss on an expensive phone, and to self-insure everything else.
So the practical lesson is to stop buying cover out of reflex and start running the break-even. The policy is real protection; it is just rarely the value it feels like at the checkout.
Grounded in the analysis
What you should actually do
Moves that follow from how phone insurance really works in Australia, not generic advice.
Run the break-even before you tick the box
Add up the premium across the months you will keep the phone, add one excess, and compare that total to a likely repair or replacement bill. If the cost of cover approaches the cost of fixing it yourself, skip the policy and self-insure.
Check the cover you already hold
Before paying for a separate policy, look at your home and contents portable valuables cover and any credit-card purchase protection. If the phone is already covered, telco insurance is double cover for the same risk.
Use your free rights for faults
If the phone fails due to a fault, claim a free repair, replacement or refund under Australian Consumer Law from the seller, not your insurance. Save the policy, if you keep one, for accidental damage, loss and theft only.
Compare phones and plans and decide on cover with the numbers, not the fear.
Current figures, last updated 2026-06-15
Key facts about phone insurance in Australia. Sources: the Australian Consumer Law consumer guarantees via the ACCC (accc.gov.au) and consumerlaw.gov.au, individual product disclosure statements for premiums and excess, and the Telecommunications Industry Ombudsman (tio.com.au). Premiums and prices change often; confirm before relying on them.
The bottom line
Why this matters right now
As phones get more expensive and the cover is pushed harder at every checkout, the marketing is getting louder, not clearer. The gap that decides your value is not between insured and uninsured, it is between the people who run a quick break-even and the people who tick the box out of fear. Add up the premium and the excess over the term, check what your home and contents policy or credit card already covers, and use your free rights under Australian Consumer Law for faults. Do that, and you only ever pay for phone insurance when the numbers, not the nerves, say it is worth it.
Common questions
A Selectra expert answers your phone insurance questions
For most people on a mid-priced handset, the honest answer is usually no. You pay a monthly premium and then an excess every time you claim, so over a typical 24 month period the premium-plus-excess total often approaches or beats the cost of simply repairing or replacing the phone yourself. Insurance can make sense for an expensive flagship you are genuinely likely to drop or lose, but the decision should be a break-even calculation, not an automatic tick at the checkout. Work out the total cost of cover over the term, compare it to a likely repair or replacement bill, and factor in how often you actually damage phones.
You usually do not need it to. Under Australian Consumer Law, the statutory consumer guarantees mean a phone that fails due to a fault must be repaired, replaced or refunded free of charge by the seller, regardless of any manufacturer warranty period. So insurance is not buying you fault cover, that is already there for free. What phone insurance actually buys is accidental damage (like a cracked screen), and loss or theft, none of which the consumer guarantees cover. Read the policy as accidental-damage-and-loss cover, not as an extended warranty.
You might be, which is why paying for telco phone insurance can mean paying twice for the same risk. Many home and contents policies include portable valuables or personal effects cover that can extend to a phone away from home, sometimes as an add-on. Some premium credit cards include purchase protection that covers items bought on the card against accidental damage or theft for a set period. Check what these already cover, and the excess on each, before you take out a separate phone policy. If you are covered elsewhere, a standalone phone policy can be redundant.
More than the monthly figure suggests, because there are two costs, not one. A premium of around $12 a month is roughly $288 over 24 months, and if you claim you also pay an excess, often $100 to $300, on top. So a single claim on that example can cost you well over $400 all up. Compare that with what a repair or replacement would actually cost: a screen repair is often a fraction of it, and a mid-priced replacement handset may not be far above it. Run your own numbers with your premium, excess and phone value before deciding.
Cover is most defensible in a narrow set of cases. If you own an expensive flagship where a replacement would be a serious hit, if you have a genuine history of dropping, losing or having phones stolen, or if you are not covered by home and contents or a credit card, then the premium-plus-excess can be worth the peace of mind. Even then, compare the telco policy with standalone insurers and with simply self-insuring (setting aside what you would have paid in premiums). The test is the same: does the total cost of cover beat the likely cost of fixing it yourself.
It depends on the dispute. Complaints about your mobile service, billing or a telco that sold you the cover can go to the Telecommunications Industry Ombudsman, which is free to use. Complaints about an insurance product itself, such as a declined claim, generally go to the Australian Financial Complaints Authority. Either way, raise it with the provider first and keep records. Australia is a fully competitive mobile market, so you can also switch telco or insurer if the service or the cover does not stack up.
