mobile phone insurance

littlebluebottle

i have posted this also in the insurance section, apologies, im just really not quite sure where it will get the right viewing.
i'l try and be brief:
i am to buy the SE k700 worth around £200. i have never lost a phone, but have come close once or twice.
i use my phone a lot in public areas such as on buses and on the streets.

so, obviously there's the possible need for insurance here, but would you recommend the network-provided insurance (i will be with o2)? for loss cover it seems relatively reasonable, but has anyone experienced any real problems when it comes to actually making a claim? i dont want to pay, have it stolen when i leave it on some table somewhere, and then be told it breaches some invisible t&c rule.
also, i realise this is vague, but does anyone know whether home insurance, when you get the personal possessions cover to cover things like your phone, whether they generally cover loss? i'm with cornhill, and i realise i should contact them about it but have no time as i need to order it today.
finally, and most importantly if i order the phone from o2 online, and not the insurance, and then decide a week/month down the line that i actually want the o2 cover, does anybody know whether this would be possible?

thank you very much in advance for any help you could offer.
cc