As vital as cell phones have become many people have taken to insuring them in case something happens, especially with smartphones.
After all, someone could be out a tidy sum of cash if they bought the latest iPhone only to have it slip out of their hands and crash on the way home—or into the hands of a thief looking to sell it for some quick cash.
There’s also the case of those whose screens have cracked and are just waiting for their contract to end, in order to avoid a hefty payout. That’s where cell phone insurance could come in handy.
Yet not everyone is convinced. According to Consumer Reports, cell phone insurance typically runs from $5 to $7 per month. Deductibles range from $25 for lesser-value phones up to $199 for the latest smartphone.
“If you file a claim after 18 months, you’ll have paid a total of $115 to $325, and the insurer might replace your phone with a refurbished model,” Consumer Reports noted in May, 2012. “If you file a claim after 18 months, you’ll have paid a total of $115 to $325, and the insurer might replace your phone with a refurbished model.”
In a 2009 survey the publication found that only one in five readers who bought a new phone within the previous two years did so as a replacement for one that was damaged, lost or stolen.
The magazine advises consumers to hang on to their old phones after an upgrade so they can reactivate it if necessary and use the old phone until their contract is up for renewal. Another option would be to buy a less costly “unlocked” replacement.
As with any contract, whether it’s from a cell provider or an independent insurer, the devil is in the details. A cell phone insurance plan is likely to state that a replacement could be a “comparable model,” rather than something identical to the phone that was insured.
In August, 2010 the magazine noted that consumers would be unlikely to save money with cell phone insurance because there could be fine print exemptions and if a phone is replaced it could be a different or a refurbished model.
Yet for someone who is into extreme sports or has a clumsy teenager in the family, cell phone insurance might make sense. It really comes down to crunching the numbers, considering the odds of needing a replacement and reading the fine print to find out what exactly what kind of losses are covered and what would be provided in case of a claim.
