Is Phone Insurance Worth It?

Our daily lives are becoming more and more reliant on our cell phones. In addition to keeping in touch, we rely on our phones for financial transactions, business dealings, and information about anything from local weather to global news. We need better, more expensive technology as our reliance on cell phones grows, which raises our financial risk.

There are many options on the market for protecting your phone, some of which provide better security than others. Plans for cell phone insurance provide thorough protection, often at a low monthly cost. Nevertheless, not everyone should purchase phone insurance.

The Cost of Cell Phone Insurance

Each plan’s cost for cell phone insurance is different. Some plans offer a comprehensive array of safeguards that protect against losses such as accidental liquid or drop damage, cracked screens, and power outage surges, and theft. Cell phone insurance typically does not cover cosmetic flaws, modifications, and normal wear and tear.

When it comes to protecting your cell phone, you have several options.

Manufacturer Insurance Plans

Some makers of mobile devices give insurance packages that offer additional protections to the warranty. For instance, Apple provides two phone insurance plans for its iPhone products: AppleCare+ and AppleCare+ with Theft and Loss.

Frequently, you can acquire a manufacturer’s cell phone insurance plan at the time of purchase or within a certain time frame later. These kinds of plans frequently have annual claim limits and could charge service fees or have a deductible. For instance, the Apple plans have service fees or deductibles of $29 for a broken screen, $99 for other damages, and $149 for loss or theft, as well as a limit of two claims per year.

The cost of the manufacturer’s cell phone insurance may vary depending on the model of your phone. For example, AppleCare+ with Theft and Loss coverage costs $3.99 per month, or $79 per year, for an iPhone SE, while coverage for an iPhone 13 Pro runs $9.99 per month or $199 per year.

Service Provider Insurance Plans

For their consumers, major service providers frequently provide cell phone insurance coverage. For instance, Verizon offers a package that includes screen repairs at a fixed price of $29 and covers damage, loss, and theft. The manufacturer and model of your phone will determine the monthly prices and deductibles. For instance, security for an iPhone 12 is $17 per month with a $229 deductible while coverage for a Samsung A610 costs $14 per month with a $19 deductible.

Depending on the device type, AT&T also provides a plan with a monthly fee between $14 and $17. Every 12 months, it will pay for up to three claims for loss, theft, or physical damage. Additional features include limitless battery replacement and a $29 screen repair.

Educational Cell Phone Insurance Plans

For their students, faculty members, and staff, some colleges and universities provide cell phone insurance policies. For instance, the Information Technology department at Columbia University offers device coverage for phones starting at $11 per month. The deductible for each incident under the Columbia plan is $99 per occurrence.

Homeowners or Renter’s Insurance Coverage

Most common renters’ and homeowners’ insurance policies provide just minimal cell phone coverage. Your policy’s property coverage will protect your phone if it is damaged in a covered event, like a fire. In the same manner, personal property insurance shields your phone from theft or vandalism, whether it happens at home or while you’re traveling.

However, the majority of renters’ and homeowners’ insurance policies do not cover accidental phone damage. Consequently, if your phone falls, and cracks its screen, you can’t rely on your home insurance coverage.

A few well-known insurance providers provide separate coverage for mobile devices. For instance, Allstate provides a phone protection plan for $12.99 per month thanks to a collaboration with SquareTrade. This policy includes coverage for unintentional losses such as a broken screen or liquid damage, in addition to charging port and battery failures.

Credit Card Cell Phone Protection

Protection for cell phones is one of the perks of credit cards. As an illustration, certain credit cards from Wells Fargo provide up to $600 in cell phone coverage with a $25 deductible. Cell phones that are damaged or stolen are covered by Wells Fargo’s insurance, but lost phones are not.

With a $50 deductible, the Visa Signature credit card also provides coverage for lost or stolen cell phones, and American Express offers up to $800 in phone coverage.

A lot of credit card insurance programs supplemental coverage. So, if your phone is covered by your homeowner’s insurance, you must exhaust that coverage before filing a claim with your credit card company.

Considering the Risk/Reward of Phone Insurance

Consider the cost of the plan and the level of protection it will offer when deciding whether to purchase phone insurance. Are you able to afford the monthly or annual insurance premium? If your phone is broken, lost, or stolen, will you be able to afford to get a new one?

When you need it, phone insurance can come to your rescue. By having coverage, you can be guaranteed that if your phone is stolen or damaged, you can afford to replace it or have it fixed.

When Is Phone Insurance Worth It? 

Consider how crucial a cell phone is to your everyday life when deciding whether to purchase phone insurance. More importantly, think about how life might be without your phone.

Staying Connected

People who depend on their phones a lot probably require phone insurance. Maybe you rely on your phone to access the internet or to keep in touch with your loved ones. People who depend on their phones for work probably need phone protection so that a replacement may be obtained quickly.

Damage or Loss Potential

Parents who give their young kids access to their pricey phones for calls or games run the danger of causing significant harm. Commuters who take public transportation are at risk of having their cell phones snatched and stolen. While working out at the gym or going on a hike, active folks run the danger of harming their phones. Others simply tend to drop their phones.

Cost Considerations

A smartphone typically costs around $350, but the iPhone 13 Pro can cost up to $1099 so consider whether you can afford a replacement. Phone insurance is particularly important if you purchase a high-end phone through a monthly installment plan, otherwise, you could be on the hook for months or years of payments if your phone is damaged, lost, or stolen.

When Isn’t Phone Insurance Worth It?

Not everyone should purchase phone insurance. Some people never leave home without their phones, while others use them solely for calls and the occasional web search. Others maintain a telephone connection while working from home.

You generally don’t need phone insurance if you purchased your phone using an installment plan and have since paid it off. Decide whether you can afford to buy a new phone if yours is broken, lost, or stolen before canceling coverage, though.

People who purchase cheap phones are not eligible for phone insurance. Paying $15 a month or more for a phone that costs $150 doesn’t make sense from a financial standpoint.

The Bottom Line

People who buy pricey phones and those who strongly rely on them can benefit greatly from phone insurance phone every day. The market offers several ways to protect your phone, with manufacturers’ and service providers’ plans. Home and renters insurance policies, as well as some credit card companies, also provide phone protection options.

The value of owning a cell phone and your capacity to replace it will determine if you require phone insurance.

Frequently Asked Questions (FAQs)

How long should you keep insurance on your cell phone?

If you purchase a phone using an installment plan, you should maintain phone insurance up until the last payment has been received. If you buy a pricey phone with a high resale or trade-in value, you should think about keeping insurance.

What is an alternative to purchasing a cell phone insurance plan?

Typically, phone insurance policies include security against theft, loss, and damage that cannot be matched by other forms of insurance. A lost phone will not be covered by your rrenter’sinsurance, even though it might pay to replace a damaged or stolen phone. Similarly, credit card phone coverage simply offers supplementary security, which most likely isn’t sufficient for a pricey phone.
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