Should You Buy Cell Phone Insurance?

These days your cell phone is more than a device you pick up to make a call. It holds your calendar. It’s your camera. It’s a tool for sending instant messages. And it keeps your Words with Friends games at your fingertips. You’d be lost without it, so should you spend the money to insure it?

Warranty versus Insurance

Your cell phone likely comes with a manufacturer’s warranty. That covers actual equipment failure. It is no help for phones that hit the pavement and end up with a spider web of cracks across the display. The warranty doesn’t cover phones that took a swim in a toilet or were lost or stolen.

Your cell service carrier presents you with insurance options that add a few dollars a month to your cell bill. But the coverage itself comes from an independent third party provider and terms vary widely.

The Fine Print

These are some of the key components of cell phone insurance policies.

Deductible – Cell phone insurance comes with a deductible that you will pay to get a replacement phone. This can be as much as $100.

New Phone – The replacement phone you are given is usually a refurbished model and the insurance policy makes no guarantee that the replacement has the features of the phone you insured.

Limited Claims – Accident-prone users and parents who buy phones for their children should know that insurance policies often limit the number of claims that can be made per year. 

Terms and Conditions – Some policies won’t cover cracked displays. Others may not cover lost or stolen phones. And some may include the options to repair the phone, not just replace it. 

Is it Worth It?

Is it worth it to spend $4-$8 each month to insure your phone? The editors at Consumer Reports say they always recommend against it. The cost of the premium is low, but paying the deductible adds significantly to the cost. Money spent on premiums and deductibles can often add up to be the same or more than just replacing a phone.

Other Options

So how do you protect your investment in your phone without paying for the insurance? One veteran Verizon store employee advises customers to always keep their last phone and its charger in a safe place. In case of damage, loss or theft to the new phone, the old one can always be reactivated.

Being able to use the old phone gives you a chance to take the time to search out the best price either online or in a store for a new phone. And you have the freedom to select the phone you want with the features you want on your own terms.