Mobile phone thefts force up premiums: A wave of stealing has made some insurers charge pounds 90 a year

TENS of thousands of mobile phone users face the prospect of soaring insurance premiums because of thefts from cars and break-ins. Mobile phone premiums have risen by up to 50 per cent in the past six months and can now cost pounds 90 a year.

Chris Webb, a spokesman for the industry's trade body, the Federation of Communications Services, says: 'We estimate that about 10,000 mobile phones are being stolen each month. More than 40 per cent of car break-ins in Greater London are now related to , mobile phone thefts, according to the Metropolitan Police.'

Stolen cellular phones can be reprogrammed to give them a new identity and are then sold on. Or they can be 'cloned' by stealing the identity of a legitimate mobile phone and running up huge bills on its account.

The cost of the crime wave for the cellular phone industry is put at pounds 50m a year.

Publicity has recently been given to 'jamming' - thefts from cars where the driver has stopped at a set of lights or is moving slowly through the traffic. But the FCS says that despite this worrying trend, most break-ins happen when car owners park their vehicles with a mobile phone in full view of passers-by.

Some experts fear costs will rise further unless the spate of thefts is checked. Colin Westcott, a registered broker whose south London firm, Knighthood, provides insurance through one phone dealer, says: 'Ten years ago, insuring a mobile phone might have cost about pounds 1 or pounds 2 each year per pounds 100-worth of phone. Two years ago, it was pounds 6 or pounds 7. Today, it could be up to pounds 10, with an excess of pounds 50 if it is stolen. In practice a person is paying up to pounds 200 between premiums and excess when a phone is stolen. We may reach a point when they become uninsurable and that time is approaching now.'

Although some insurers, such as Eagle Star, are prepared to offer cover under the terms of a person's household and contents insurance, this is on condition that the phone is not for business use. Excess penalties still apply when phones are stolen.

Entertainment & Leisure Insurance Services, an insurance firm based at Great Ouseburn near York, charges pounds 60 a year to provide cover for a mobile phone worth up to pounds 300 if used in rural areas, and pounds 73 if used in a city. A phone worth pounds 400 costs pounds 76 a year in rural areas and pounds 94 in cities.

Many private users are concluding that they are better off without insurance. They calculate that as they have only spent pounds 100 or so to buy a phone, the cost of replacing it will be low. If so, they could be in for a shock.

'The problem is that phones sold nowadays are heavily subsidised by the companies that supply the airtime. They look to making their money back by charging for the cost of calls,' says Mr Webb.

'But if their phone is lost or stolen, the dealer will expect them to pay the full value, which comes to between pounds 300 and pounds 600. If a phone has been cloned, they could find themselves paying a hefty phone bill.'

Business users could also find themselves personally facing large bills, even though their phones are owned by the company they work for.

Mr Westcott says: 'If the company decides to save money by cutting down on its insurance, you get a lecture by the fleet manager on how to look after the mobile phone. He will then tell you that you are liable to pay for it if you leave it unsecured.'

The FCS has one tip for the 1.7 million mobile phone users: never leave one unattended in a car. Users should either take their phone with them or lock them out of sight in the boot of their vehicle.

Mr Webb says: 'If users took just this one simple precaution, nine out of 10 losses could be prevented.

Entertainment & Leisure Insurance Services freephone 0800 590 561

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