White Paper: Sustainable Replacements. A comparative look at mobile phone insurance claims, in Australia vs the UK within the Home and Content channel.
- larapdenney
- Sep 4
- 4 min read
Updated: Sep 12
Prepared By: PhoneCycle Pty Ltd
Author: Owen Jones
Role: Managing Director
Date: September 2025
Download the paper here:
Executive Summary
This white paper explores the contrasting approaches to mobile phone replacement under home and contents insurance policies in Australia and the UK. In Australia, the prevailing practice among insurers is to replace damaged or lost mobile phones with new devices. In contrast, the UK insurance industry leans heavily toward refurbished replacements. As the demand for sustainable solutions increases globally, Australia faces an inflection point: maintain the high standard of customer satisfaction driven by new-for-old replacements or transition towards more environmentally conscious refurbished options. This paper presents insights, comparisons, and future recommendations for insurers, consumers, and regulators.
1. Introduction
Mobile phones have become one of the most valuable and frequently claimed items under home and contents insurance. With flagship devices now exceeding AUD $2,000 and claims steadily rising, the way insurers handle phone replacements is under increased scrutiny. At the same time, sustainability and circular economy goals are prompting a reconsideration of traditional replacement models.
This paper examines how insurers in Australia and the UK approach mobile phone claims, why these differences exist, and what opportunities lie ahead as markets strive to balance cost-efficiency, customer satisfaction, and environmental responsibility.
2. The Sustainability Imperative
Replacing a new mobile phone claim with a refurbished device can deliver significant sustainability benefits:
Key sustainability facts:
Australians generate ~21 kg of e-waste per person per year, one of the highest rates globally.
Less than 10% of mobile phones are properly recycled; the rest sit unused or end up in landfill.
Producing a new smartphone generates ~55 kg CO₂e — about 80–90% of its lifetime footprint.
Extending a smartphone’s life by one year cuts its annual CO₂ footprint by up to 30%.
Switching 25% of insurance claims to refurbished phones could save the equivalent CO₂ of removing 5,000–10,000 cars from the road each year.
Each phone contains 30+ rare materials; refurbishment reduces new mining and conserves natural resources.
Example CO₂ Savings:
Number of Replacements Switched to Refurbished | Estimated CO₂ Savings |
10,000 claims | 467,500 kg (467.5 tonnes) |
50,000 claims | 2,337,500 kg (2,337.5 tonnes) |
100,000 claims | 4,675,000 kg (4,675 tonnes) |
By integrating even a portion of claims with refurbished replacements, insurers can make a measurable environmental impact while positioning themselves as sustainability leaders.
3. The Claim Landscape in Australia (Mobile Phone Insurance Claims)
In Australia, most home and contents insurance providers adopt a new-for-old replacement model for mobile phones. This means that if a covered phone is lost, stolen, or irreparably damaged, insurers will typically replace it with a brand-new device of the same or similar make and model.
Key Insurer Examples:
NRMA Insurance: “We’ll replace it with a new item of the same or similar model.”
AAMI: “If we can’t repair it, we’ll replace it with a new item, or one with similar specifications.”
Allianz: Offers new-for-old on most household goods, including portable electronics, with few exceptions.
Driving Factors:
Customer expectations: Australians expect high service standards and brand-new replacements.
Retail partnerships: Insurers often partner with major electronics retailers like JB Hi-Fi or Officeworks to fulfil claims.
Low refurb infrastructure: Unlike the UK, Australia has a relatively undeveloped ecosystem for high-quality refurbished mobile devices at scale.
The result is a strong customer experience but a replacement model that is potentially costly and less aligned with sustainability goals.
4. The UK Comparison
In contrast, the UK insurance industry routinely replaces mobile phones with refurbished devices, particularly through third-party claims fulfilment services.
Typical UK Insurer Approach:
Aviva: “Where possible, we will replace your item with a refurbished equivalent.”
Direct Line: Works with partners like Likewize to supply refurbished phones.
Market Characteristics:
Cost control: Refurbished replacements significantly reduce claim costs.
Mature refurb market: Strong supply chains for certified, grade-A refurbished phones.
Environmental goals: Many UK insurers link refurb practices to ESG and net-zero targets.
While some UK consumers accept refurbished phones, especially when well-communicated and backed by warranties—others feel short-changed, particularly when the replacement differs aesthetically or functionally from their original device.
5. Sustainability vs Expectation
There is an inherent tension between customer satisfaction and sustainability. In Australia, consumers are conditioned to expect new replacements, seeing this as fair compensation for loss or damage. However, this approach contributes to electronic waste and increased carbon impact.
By contrast, the UK model embraces refurbishment as part of a circular economy strategy. Yet this is not without risk: if the customer experience suffers, insurers face reputational damage and reduced retention.
For Australia, the challenge is to move the conversation forward—educating customers about refurbished quality and sustainability benefits without compromising perceived value.
6. Challenges and Opportunities
Challenges for Australian Insurers:
Limited refurb infrastructure: Few local providers can meet the scale, consistency, and warranty demands of insurers.
Policy wording inertia: Most policies still favor new-for-old, and changing this may require regulatory clarity.
Consumer mindset: Changing expectations around what constitutes a ‘fair’ replacement will take time.
Opportunities:
Choice-based models: Offer customers a refurbished device or a cash equivalent with a sustainability incentive.
Partnerships: Collaborate with certified refurbishers to ensure quality and consistency.
Sustainability leadership: Position refurbished replacement as part of a wider ESG or net-zero strategy.
Australia can lead in creating a high-standard, customer-centric refurb model, rather than waiting for regulation or economic pressures to force the shift.
7. Recommendations
For Insurers:
Clarify policy wording and customer expectations at point of sale.
Introduce warranty-backed refurbished alternatives as a claim option.
Emphasise sustainability benefits in communications and brand positioning.
For Regulators:
Provide guidance on sustainable insurance practices.
Incentivise or recognise insurers that offer circular economy-aligned models.
For Industry Stakeholders:
Invest in refurb capability within Australia.
Educate consumers about device quality, performance, and environmental impact.
8. Conclusion
Australia’s home and contents insurance market currently delivers one of the most customer-friendly mobile phone claim experiences in the world. However, as environmental concerns grow, the pressure to shift from new-for-old to more sustainable models will intensify.
Learning from the UK experience—both its successes and pitfalls—can help Australian insurers develop a better-balanced, future-ready claims model. With the right partnerships, policy clarity, and consumer education, refurbished replacements can enhance both sustainability and trust.
Appendix / References
Sample policy documents from NRMA, AAMI, Allianz (2024)
ACCC: Home and Contents Insurance Monitoring Report (2023)
Association of British Insurers (ABI): Claims Performance and Environmental Strategy
Consumer feedback from UK Trustpilot reviews (Aviva, Direct Line, Likewize)
Industry interviews and third-party repairer insights (2024)
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