Okay, this is my recommendation.
If you're with Optus, sign up for SafeGuard Essential immediately (the 8.13 one). With Optus insurance, all you have to do is be able to make a call on the phone (to prove that it hasn't already been lost, stolen or destroyed). Within the first 3 months, you have to pay an extra $65 to get it repaired or replaced. There is also a charge of $50 to get it repaired, or a charge of $100 to get it replaced. This means that it will cost you $165 to get a replacement.
Still a lot better than buying a new phone. Correct me if I'm wrong on any of these points. Here is the site with all the details:
Optus Phone Insurance
Here are the relevant points from the Terms and Conditions:
1. Your completed form does not constitute a covernote. Your SafeGuard insurance policy is issued on the date your application form is received. However, your insurance protection only commences when you have made your first successful "outbound" call with the insured phone on the Optus Mobile Network.
EXCESSES
SafeGuard Essential and Business
Sections 1 & 4
General Excess
You must pay the following first amounts of all claims under Sections 1 and 4 in respect of Insured Equipment arising out of any one event:-
$50 for all claims where the Insured Equipment is repaired.
$100 for the first claim arising from any event occurring in any twelve month period where the Insured Equipment requires replacement,
$175 for the second or any subsequent claim arising from any event occurring in the same twelve month period where the Insured equipment requires replacement.
The General Excess for replacement is reduced to the following amounts when at the time of loss the SafeGuard Insurance Plan applicable has been in force for the following continuous periods and no previous claims have been lodged in that period:
$75 for more than 12 months $nil for more than 24 months,
New Insurance Excess
You must pay the following additional amount when at the time of loss the SafeGuard Business or SafeGuard Essential Plan has been in force for the following continuous periods only:
$65 less than 3 months.
SafeGuard Basic
You must pay the first $50 of all claims under Section 1 in respect of Insured Equipment arising out of any one event.