Cell Phone Insurance: Worth The Cost?

Cell phone insurance is a highly debated topic. Some people believe that it is a waste of money, while others argue that it is a wise investment, especially if you have an expensive phone. The decision ultimately depends on various factors, such as the cost of the phone, your financial situation, and your risk tolerance.

Cell phone insurance typically covers loss, theft, accidental damage, and mechanical failure. It can cost anywhere from $5 to $20 per month, depending on the device and coverage. When choosing whether or not to get cell phone insurance, it is essential to consider the likelihood of damaging or losing your phone and whether you can afford to repair or replace it. Additionally, it is worth noting that some credit cards offer free cell phone insurance if you pay your monthly bill with them.

Cost-effectiveness: Monthly premiums vs potential savings

When considering the cost-effectiveness of cell phone insurance, it's important to weigh the monthly premiums against the potential savings in the event of damage, loss, or theft.

The monthly cost of cell phone insurance varies depending on the insurance provider, the type of phone, and the level of coverage. Premiums can range from as little as $3.99 per month to upwards of $20 per month. For example, AppleCare+ for iPhones starts at $3.99 per month, while SquareTrade's family plan costs $19.99 per month and covers up to four devices. It's worth noting that insurance purchased directly from your mobile network provider may be more expensive than standalone insurers.

In addition to the monthly premium, there is usually a deductible that you must pay when filing a claim. Deductibles can range from $50 to $499, depending on the type of damage and the value of the phone. For example, a cracked screen repair may have a lower deductible than replacing a lost or stolen phone.

Now, let's consider the potential savings. The average cost of repairing a cell phone is around $330, and the cost of replacing a phone can be several hundred dollars, often exceeding $1,000 for smartphones. With insurance, you would typically only be responsible for the deductible, which could result in significant savings compared to paying for repairs or replacement out of pocket.

When deciding whether to purchase cell phone insurance, it's essential to consider your personal circumstances. Ask yourself if you can afford to replace or repair your phone without financial strain. Also, evaluate your risk of losing or damaging your phone. If you have a history of losing or breaking phones, or if you work in an environment that puts your phone at risk, insurance may be a wise investment.

Additionally, there are alternative options to consider. Some credit cards offer free cell phone insurance if you pay your monthly bill with the card. You can also include your phone in your home contents insurance or renters insurance policy, although this may increase your premium. Another option is to set aside the money you would have spent on insurance each month into a dedicated savings account, creating your own insurance fund.

In conclusion, the cost-effectiveness of cell phone insurance depends on several factors, including the monthly premium, deductible, likelihood of damage or loss, and alternative options available to you. By carefully considering these factors, you can make an informed decision about whether cell phone insurance is a worthwhile investment for your specific situation.

Coverage: What does cell phone insurance cover?

Cell phone insurance covers you in the event of loss, theft, or damage to your device. This includes accidental damage, such as a cracked screen, water damage, or camera damage. Some policies also cover accessories like power banks, chargers, and headphones.

There are different types of cover options to choose from, depending on your unique needs. You can choose to insure your device comprehensively (covering loss, theft, and damage) or just for damage. Some insurance providers also offer optional add-ons, such as the Excess buy-down benefit, which reduces your basic excess by a certain percentage in the event of a claim.

It's important to note that cell phone insurance typically does not cover gradual damage, such as wear and tear, maintenance, depreciation, or other gradually operating causes. Additionally, there may be exclusions for devices that are on loan or stolen from an unattended vehicle, unless there are signs of forcible entry.

When considering cell phone insurance, it's essential to review the terms and conditions of the policy carefully to understand what is covered and what is not. It's also worth noting that the premiums for cell phone insurance are usually based on the value of your device.

Alternatives: Other ways to protect your phone

• Get a protective case and a screen protector: A protective case can help prevent damage to your phone if you drop it. Otterbox is a popular option for protective cases. You can also get a screen protector to keep your screen safe in case of accidents.
• Use a credit card that provides free cell phone insurance: If you pay your monthly cell phone bill with a credit card that offers this protection, you can save money and avoid the hassle of insurance. For example, American Express has 11 different credit cards that offer up to $800 in coverage with a $50 deductible.
• Try a repair shop: If you've damaged your phone, a local repair shop may be able to help you out for a lower cost than insurance.
• Check your homeowners or renters insurance policy: Cell phones may be covered by renters or homeowners insurance, which can be helpful if you damage, lose, or have your phone stolen. Look at the "personal property coverage" section of your policy or contact an agent to discuss your current cell phone protection.
• Build an emergency fund: Instead of paying for insurance, consider putting the money into a savings account. That way, if something happens to your phone, you can use your own funds to repair or replace it. If you don't end up needing to repair or replace your phone, you'll have a nice little savings account to keep or spend on something else.
• Protect your phone from hackers: Your cell phone holds sensitive personal information, so it's important to take steps to protect it from hackers. Keep your software updated, back up your data regularly, use a PIN or passcode to lock your phone, and take advantage of mobile operating systems that can help you find, lock, or erase your phone if it's lost or stolen.

Deductibles: What you'll pay when filing a claim

When filing a claim for your cell phone insurance, you will likely have to pay a deductible. The deductible is the part of the claim that you pay out of pocket, and it can be quite high, so it is important to read the fine print of your policy carefully. The deductible varies depending on the insurer and the policy, but they typically range from $50 to $200. Policies can also have different deductibles for different types of damage. For example, screen repairs, which often do not require a replacement phone, are more affordable than replacing a lost or stolen phone.

The deductible for screen repairs for AppleCare+ is $29, while other types of damage typically result in a $99 deductible. If the phone is lost or stolen, expect a $149 deductible. For Samsung Care+, repair services fees are set at $0 to $99, while deductibles for lost or stolen phones range between $99 and $199. SquareTrade has a flat deductible of $149. Asurion's deductible ranges from $29 to $499.

It is important to note that the deductible is per claim, not per year, and there may be limits on the number of claims you can file annually. Additionally, you will still be paying the monthly cost of your cell phone insurance on top of any deductible.

Providers: Who offers cell phone insurance?

There are a few different ways to insure your cell phone. You can purchase insurance through your wireless carrier (AT&T, T-Mobile, or Verizon) as an add-on fee to your monthly bill, or through a third-party subscription service (AppleCare+, Samsung Care+, SquareTrade, etc.).

• AKKO: This provider offers some of the lowest premiums in the industry, with coverage options starting as low as $5 a month if you pay annually. AKKO offers two plans: "Phone Only" and "Everything Protected". The Phone Only plan covers basic phone protection, including cracked screens, liquid damage, accidental damage, theft, and vandalism, as well as damages resulting from natural disasters. The Everything Protected plan extends coverage to up to 25 other electrical items, including tablets, laptops, and video game consoles.
• SquareTrade: Backed by Allstate, SquareTrade offers affordable rates, multi-device policies, and higher annual claim allowances, making it a good option for families. It covers all phone makes and models, regardless of carrier or age, and offers coverage for cracked screens, touchscreen failures, liquid damage, speaker/audio failure, battery failure, and charging port failure. SquareTrade allows up to four claims per year per individual device plan and up to eight claims per year for family plans.
• AppleCare+: This provider offers affordable coverage specifically for iPhone and other Apple devices. It provides coverage for unlimited incidents of accidental damage protection annually and offers coverage if the battery retains 80% or less of its original charging capacity. AppleCare+ also includes 24/7 priority access to Apple experts and onsite services. AppleCare+ with Theft and Loss covers two incidents of theft or loss every 12 months.
• Samsung Care+: This insurance product is offered by Samsung and covers Samsung phones. It includes coverage for accidental damage, liquid spills, screen cracks, and mechanical breakdowns after the 12-month manufacturer warranty expires. Samsung Care+ Theft and Loss plan covers three incidents of theft or loss within a 12-month period. Customers can take advantage of 24/7 support and receive original Samsung parts for repairs.
• Asurion: Asurion is a popular choice for cell phone insurance, working directly with several top wireless providers, including Verizon, AT&T, and USCellular. Their coverage includes loss, theft, and damage, as well as device defects and some failures due to normal wear and tear. Asurion has an easy claim process, and customers can typically expect a replacement phone within 24 hours. They also have over 700 repair stores where customers can take their devices for repairs or work directly with a technician.
• Progressive: Progressive offers customizable coverage for cell phone insurance, allowing customers to choose the device type, coverage amount, and policy term. They cover theft and damages, including water damage, drops, accidental damage, cracked screens, and natural disaster-related damages. Progressive also offers affordable multi-device plans and the option to bundle several device protection policies.

Frequently asked questions