Insuring your mobile phone may end up quite costly and you could get verylittle in return, writes Laura Slattery.

You go into the shop with the sole intention of buying a phone, but you come out with all the accessories: the neon cover, the protective leather case, the additional ring tones, the hands-free set. . . the insurance policy.

A mobile phone is stolen every few minutes, phone providers remind their customers: a statistic that convinces many of us to opt for the "peace of mind" the company's mobile phone insurance policy will allegedly bring.

"Don't let a lost or stolen mobile phone interrupt your life," cautions Vodafone on its website, before going on to describe the "sheer frustration" of losing your mobile phone and the destructive impact it could have on your business and personal life.

Just in case you had not fully grasped what life without a mobile phone would be like, Vodafone explains that, without a phone, "you won't be able to make or receive calls or use text messaging". Insurers, however, promise to replace your phone within a mere 48 hours.

However, paying an extra €5 or €6 a month on top of your monthly bill might not seem too much but you could be paying it for years before the phone goes AWOL and you need to make a claim.

Even at that stage, policyholders face paying a high excess on the policy and sometimes may even have to battle to make the insurer pay out.

For example, an O2 customer who chooses to insure their phone through its Phonecover product, which is underwritten by insurer Eagle Star, could feasibly pay €6 a month for, say, 18 months before the day that their phone is snatched. That person would have paid a total of €108 in insurance premiums and would then be liable for the first €35 of any claim, bringing their total bill to €143.

Given that most phones cost less than €200, going insurance-free doesn't seem such a big risk to take. The customer may have paid more than €200 when he or she first bought the phone those 18 months ago, but 18 months is a long time in telecommunications.

Under the terms of the insurance policy, the mobile phone company will only replace lost or stolen phones with an identical model, or the closest to it.

But over the course of 18 months, the original phone - overshadowed by newer models complete with picture messaging, USA compatibility and polyphonic ring tones - will have fallen in value. Replacing it yourself won't cost too much more than the cost of insurance.

Once you have made a claim, it makes even less sense to carry on insuring the replacement mobile, as the amount customers have to pay as an excess on the policy in the event of a second claim can more than double.

For example, Meteor customers who opt for the Meteor Minder insurance, underwritten by Homecare Insurance, pay a €33 excess on the first claim and €66 on subsequent claims made within a six-month period.

On Vodafone's Stay Mobile Insurance, underwritten by Royal & Sun Alliance, the excess payment jumps from €31.74 to €75 for all subsequent claims and €125 for claims for handsets worth more than €634.50.

Claiming successfully on more than one occasion can be tricky, as unlucky two-time crime victims may be treated with suspicion. One insured mobile phone user mugged twice within two weeks in Dublin had to write to the Insurance Ombudsman before the phone company would issue a second replacement phone.

Mobile phone insurance policies also contain a variety of exclusions that can get in the way of a successful claim.

In general, policies will not cover repairs covered by warranty or mechanical breakdown; mobiles stolen from unattended vehicles, unless the phone was in a glove compartment or locked boot; mobiles lost or stolen when not in the possession of the named person on the policy; claims not notified to the Garda or phone company within 24 hours; or claims that are the result of undue care or negligence.

But the insurance company's definition of undue care or negligence may not exactly coincide with your definition.

For example, a British consumer who placed her mobile phone on the table in front of her in a restaurant, a practice routinely repeated by diners everywhere, was deemed not to have taken reasonable care of her phone.

Vodafone refers to the cover it sells as "extensive", however the terms and conditions specify that the policy does not cover loss, theft or damage where the phone is left behind at any place to which the public has access or on any form of public transport.

Customers might wonder if such a clause would exclude the most likely situations where their mobile could be lost or taken.

O2's Phonecover product, although it is slightly more expensive, gives customers wider cover.

"We will cover for loss of mobile phones in public areas, so if you lose your phone in the pub or the park, we will cover it, and not every provider will do that," says a spokeswoman.

Some 92 per cent of claims received are settled, she adds.

Carphone Warehouse's Lifeline Complete cover is also comprehensive and, at €2.30 a week, sounds quite cheap. However, this works out at €119.60 a year - almost twice as expensive as Vodafone's policy.

Despite the restrictions on its policy, Vodafone claims that bill customers are more likely to insure their phones now than ever before, with newer, more sophisticated models most likely to be insured.

Meanwhile, the O2 spokeswoman says that 95 per cent of customers who buy O2's handheld pocket PC, the O2 XDA, takes out insurance, suggesting that obtaining cover makes more sense for owners of top-of-the-range gadgets than it does for basic phone users.

However, Mr Leslie Branagan, business development manager at Meteor's partner Homecare Insurance, believes insurers will have to differentiate how they insure mobiles according to their value. Since the arrival of the Nokia 7650, Sharp GX10 and Panasonic GD87 camera phones, the number of claims has increased sharply, he says, making them uninsurable at current rates.

In the future, he believes owners of more expensive models will pay even more for their insurance. O2 already charges people who want to insure handsets worth more than €400 a separate rate: at €9 a month, this will cost users a substantial €108 annually.

"It's inevitable that premiums are going to have to go up," he says. "The one-size-fits-all approach that has been used for the last five years won't be suitable anymore."

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Consumers may already have cover for their mobile phone under their home insurance policy if they have "all risks" cover.

This option covers accidental loss or damage to items such as jewellery and electronic equipment when removed from the house, usually for up to 60 days.

But consumers will have to check if their mobile phone, camera phone or digital assistant is covered with their insurer. According to Carphone Warehouse, 80 per cent of home policies do not cover mobile phones.

Some policies do cover mobile phones without specifically highlighting that they do, but a heavy claims experience means this cover is likely to either cease or be given a separate, more expensive rate. For example, at AXA Insurance, all risks cover costs €1.74 per €100, or €17.50 for items with a total value of up to €1,000. That's significantly cheaper than most mobile phone insurance policies.

Bicycles, however, are insured at a cost of €6 per €100, and as Mr Willie Sparkes of AXA Insurance notes, "it's far easier to lose a mobile phone than a pedal cycle". Mr Sparkes confirms that there has been "a lot" of claims for the camera phones since they arrived on the market at the end of last year.

Even if your home insurer will cover your mobile, the excess on home insurance policies is typically at least €125, so it won't make sense to claim for a basic handset.

Some insurers also offer a no claims discount of up to 20 per cent on premiums, which will be lost if consumers claim for a lost mobile phone. For this reason, it is better to claim for high-value items like jewellery only, according to Mr Sparkes.

Home insurance policies will only cover personal items only, so mobile phones or other equipment provided by your employer will not be insured. However, some mobile phone companies will offer businesses cover at a discounted rate.