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Your mobile phone is probably one of the most valuable things that you carry around with you every day. Unfortunately, mobile phones are also susceptible to loss, theft and accidental damage.

It’s for these reasons that many of us choose to insure our mobile phone. But what needs to be considered before you choose a policy?

For example, some mobile phone insurance providers have high fees or a limited range of things that they cover you for. Because of this it is important to decide what you need from your insurance policy before you opt into one.

When you are on a contract, the cost of your mobile phone is subsidised by your airtime provider (your network). This means that you often don’t know the true cost of replacing your mobile phone if it were lost, stolen or damaged beyond repair. The cost of replacing your mobile phone could be many hundreds of pounds – a Blackberry Pearl costs £250 to replace and even the basic iPhone 3GS 8GB costs a whopping £419!

Although some policies may differ as to what circumstances a payment will be made, some of the areas that are generally covered in include:

• Theft of the device
• Loss
• Protection from unauthorised call costs in the event of theft
• Accidental damage
• Mechanical breakdown (usually after the manufacturer’s warranty expires)

Another thing to consider is finding an insurance provider with fast replacement times. In general it shouldn’t take more than 48 hours after a successful claim to get your replacement. Check with each provider you make enquiries with and learn their turnaround times.

Make sure you read the wording on the policy carefully before you sign. Not every company will replace your phone for the one lost. Instead it may be their company's contracted brand that is of similar value or a refurbished unit.

Finally, To get the most out of your insurance you will need to report any incidents immediately. The longer you wait the higher the risk that you will be denied. If your phone is stolen for instance, file a police report and submit it to your insurance provider at once - most insurers require you to have filed a police report within 24 hours of the theft.