Cell Phone Insurance - Should You Get It?
Should you get cell phone insurance? Given that smartphones
are virtually 100% penetrated (i.e. everyone has one!), coupled with
the phasing out of subsidies, the cost to replace these high tech
gadgets is really quite high. Thus, considering phone
insurance is a much more realistic and common consideration.
Many different companies will offer you the opportunity to
insure your cell phone. Even at the point of sale you will
have retailers and
wireless providers attempting to get you signed up
to a policy that will add extra costs to your monthly payment.
Or you may have been approved, or seen ads from third parties
wanting to sell you insurance (i.e. not related to your wireless
provider). Of course the purpose of insuring a mobile phone
should be clear to most, since you will usually have invested a
significant amount of money in the handset itself. So adding
a little extra to make sure
it's properly protected
seems to make a lot of sense depending on your personal situation and
The problem with cell phone insurance is that not every policy will
give you the same coverage, and like any kind of insurance you will
unfortunately need to read the small print to find out just what will
be required of
you. For example, some policies will be comprehensive,
covering accidental damage, loss, and theft of your cell phone, so that
you don't have to worry about coming up with a wad of cash to cover the
of replacement or repair. On the other hand, others will only
deal with one or two of these eventualities, and there can be all sorts
of clauses to validate/confirm your situation,
including excess charges to pay if your wireless handset is
particularly expensive. In short, making a claim can
be a relatively complex procedure if you choose the wrong cell phone
insurance policy, so doing your due diligence is advised.
experience, the cell phone insurance provider was fast and easy to work
with, and I experienced no problems whatsoever. In other
words, it doesn't have to be a bad experience!
Do you need it?
The main thing to think about when looking at cell phone insurance
policies is whether you will actually need the coverage. If
you regularly lose or damage your mobile phone, or if you have a
particularly expensive smartphone then a policy could well be worth
penny for the peace of mind. If you are careful with your
phone, do not have a
track record of leaving it on public transportation, at restaurants,
etc., or have an inexpensive handset that will not be that costly to
replace, then there should be less reason to invest in insurance.
In addition, keep in mind that the longer you have the phone,
the less value it has, meaning that you can replace it with the same or
even better model at a much lower cost. It's really the first
12-18 months where replacing it will be the most costly.
companies behind the coverage will be banking on trustworthy users
helping to subsidize those who are careless with their gadgetry, and
since there are no premium hikes for serial smartphone losers, there is
usually a flat rate that everyone pays, regardless of your claim
Not every insurer will charge a flat rate for coverage as
this is usually something which wireless providers do.
Some will take into account the value of your phone, and
give you cheaper deals based on this. But it does mean that
particularly expensive models will be paying more if you go for an
independent insurer rather than the one-size-fits-all package that is
generally offered by wireless providers. Equally noteworthy
is the fact that wireless company insurance deals will usually
have small excess charges, but deals with outside insurers may require
higher excess payments if a full replacement is required.
Watch out for deductibles!
It's also important not to forget about deductibles. A
is when you have to pay a fixed amount when you make a claim.
example, $50 for a feature phone, and $150 for a Smartphone
are usually covered in the bold print, and are inferred above when I
spoke about possible extra charges. Deductibles are
because if you have to pay $100 or $150 to receive a replacement phone
from the insurance company, you may just be better off buying a new
phone, or trying to find a used one on eBay. Awhile back I
used to have
insurance on my smartphone; it was $7/month with a $50 deductible.
This was worth it because the phone cost many hundreds of
dollars at the time. However, as phone prices started to come
down, and the deductible was increased to $100, it made no sense for me
to continue with the cell phone insurance plan; I canceled it.
That said, I have insurance on my wife's smartphone, as she
usually has the top-of-the-line Samsung Galaxy, and has a history of
One final aspect to bear in mind about cell phone insurance is whether
or not you already have coverage without realizing it!
If you purchased your phone using a credit
card, many U.S. credit cards offer automatic insurance for lost,
stolen, or damaged products. Usually lost or stolen coverage
is just for 30 to 90 days though, while warranty coverage usually
manufacturer warranty up to one additional year. Lastly,
consider paying for insurance for the first 12-18 months, and
canceling it thereafter, knowing that at that point getting a
replacement will be much less costly, and you may be ready to upgrade
if you do lose or damage your phone at that point.
your decision will largely have to
with your personal situation and comfort level, so don't feel pressured
one way or the other!