If you’re a cell phone owner, or you’re in the market for a new phone, then one question that you should ask yourself is whether or not you should invest in insurance for your device. Cellular phones are expensive pieces of machinery, and phone insurance gives you an extra measure of protection in case something unforeseen happens to yours. Let’s take a few moments to go over the pros and cons of cell phone insurance, and we’ll give you some concrete examples of the math involved as well.
The Difference Between Cell Phone Insurance and Your Warranty
There are some people who might not necessarily know the difference between your cellular phone warranty and insurance. They’re not the same thing. Your warranty covers things like hardware malfunctions and manufacturing defects. Most new cell phones come with a one-year warranty, though you can get an extended warranty through the manufacturer for an additional fee.
That is not the same thing as having insurance for your device. The insurance covers things like dropping your phone and breaking it, the device getting submerged in water, someone stealing it, or you losing it while you’re traveling. Most unforeseen circumstances can be covered by insurance, provided you get a plan with comprehensive coverage.
It is possible for you to have a warranty for your phone without insurance. Likewise, you can have insurance for your phone even after the warranty on the device has expired.
Why Would You Want Phone Insurance?
The answer to the question of why you would want phone insurance becomes evident if you take some time to think it over. After all, cell phones aren’t cheap, especially if you get the latest models. A top-of-the-line iPhone, Galaxy, or something along those lines can easily cost you in excess of $1,000. If you get a model that has 256 GB of space on it, then it can hold more apps, music, etc., but you could be looking at $1,300 or more.
Whether you’re paying for your device all at once or on an installment plan, knowing that it is insured lets you breathe easier every time you leave the house. There are all kinds of things that could potentially befall your phone; some of them might be your own doing, while other times, it might simply be bad luck.
If you look at it in that way, you’ll see that the decision not to get insurance is like a form of gambling. You’re betting that nothing is going to happen to your phone. If your assumption turns out to be correct, then you can save yourself some money over the months and years. If something happens to your phone, though, and you had no insurance for it, then you might quickly come to feel that you should have invested in it.
Cellular Service Provider that Offers Phone Insurance
There are lots of different cellular service providers around the US. Virtually all of them can offer you insurance for your phone. That’s going to be true regardless of whether you bought the device on your own or if you purchased it from your service provider when you signed up with them.
You can also get cell phone insurance from third-party vendors. In trying to determine whether a third-party vendor makes the most sense or whether you should get insurance from your service provider, you’ll want to look at things like how much each plan costs and what comes with each one.
There are four major cellular service providers in the US, and they are sometimes referred to as The Big Four. Those are Verizon, T-Mobile, Sprint, and AT&T. AT&T offers a plan called Mobile Insurance through Asurion. It costs $8.99 per month. Sprint offers Sprint Complete through Asurion, and you can also get that with AppleCare if you purchased on iPhone through them. That will cost you from $9-$19 per month depending on which plan you get.
If you have T-Mobile, you can get their Protection 360 Plan through Assurant, and they also offer AppleCare for iPhone owners. Their cheaper plans will cost you $7 per month, while the more expensive ones are $15 per month. Verizon Wireless has its Wireless Phone Protection Plan. It is offered through Asurion. It will cost you from $6.75-$15 per month.
Are These Plans Worth It?
When you’re trying to determine whether phone insurance is worth it to you, there are a couple of different ways that you can approach the question. You can look at it through the numbers alone. For instance, let’s say that you have Verizon. You just signed up with them, and you brought your own phone that you purchased on Amazon. The phone you brought along was an unlocked iPhone XS Max with 256 GB of storage. At the moment, such a phone will cost you $664.95, plus tax.
The Verizon plan that we mentioned, the Wireless Phone Protection Plan, costs $12 per month for a single device in what Verizon considers “Tier 2.” It costs $15 per month for “Tier 1.” Your iPhone XS Max would be Tier 1, which basically means a newer or fancier phone.
If you enroll in that plan, then you’re covered for three claims within a twelve-month period, excluding cracked screens. However, you can only start to make such claims after you hit the deductible for your insurance plan.
A Brief Word on Deductibles
If you are not familiar with this term yet, a deductible is an amount that you have to pay within a designated period, usually, one year, before your insurance kicks in.
Generally speaking, the better insurance plans have lower deductibles. That means that if you have a policy with a higher deductible, it is not considered to be very good. That is not exclusive to cell phone insurance plans. It also goes for vehicle insurance, health insurance, homeowner’s insurance, etc.
Verizon Insurance Plan
Let’s return to the Verizon insurance plan for your iPhone XS Max that we were discussing. The deductible for that plan is $249. In other words, if you wish to make a claim, then you first have to pay $249 out of pocket if something happens to your phone.
Let’s say that your phone was stolen. You have that insurance plan, which means that you have to first pay $249 for the phone’s replacement. Now, you can make a claim, and your phone should be replaced. You paid $664.95 for the phone at first, and now you’re paying $249 to Verizon to get it replaced. That’s less than half of the original cost of the phone. It seems like a pretty good deal, right?
Hold on a minute, though. You haven’t yet taken into account the monthly cost of the insurance. It’s $15 per month, and let’s say that you signed up for Verizon six months earlier. That means the actual cost of your new phone is going to be $249 plus $15×6. $15×6 is $90, so the actual price of getting that phone replaced is $339, or $249+90.
Did you get all that? Looking at it in that way, you can still see that the cost of getting a replacement phone will be just about half of what it would be if the phone were stolen, and you had no insurance for it. In that sense, getting phone insurance can certainly prove to be worth it for you.
Importance of Phone Insurance
This would seem to bring you to the logical conclusion that it’s always worth it to get insurance for your device. However, just because the odds worked out in your favor in that particular scenario, it doesn’t mean that they are always going to do so.
For example, it might be that you’re paying the $15 per month for your phone, and nothing ever happens to it. Cellular service plans through Verizon, or any other company, aren’t exactly cheap, especially for the high-end, unlimited data plans. You might end up paying that extra $15 per month for years on end, on top of what you’re already being charged. If you’re careful with your phone, then that money is essentially paying for nothing.
This goes back to the gambling aspect that is inherent to all forms of insurance. You aren’t required to have insurance of any kind, except in some states where you are forced to have minimum coverage for your vehicle. Let’s say that you’re a homeowner, though, and someone slips and falls on your property. If you don’t have homeowner’s insurance to cover instances like this, you could be in serious trouble.
You Need to Take Several Factors into Account
All of this is another way of saying that if you’re trying to decide whether or not phone insurance is for you, you need to think about a few different things. First, how much is your phone worth? If you have an older phone model, then you probably won’t be as upset if it goes missing or you break it. If that’s the case, then you probably will not want insurance. The money simply isn’t worth it.
Aside from that, what do you know of yourself? Are you a caring person who never lets anything happen to their phone, or have you broken or lost a couple of devices in the past? Try to make an honest assessment of yourself. If you are a bit clumsy or you seem to have bad luck with phones, then that is probably going to have an impact on your decision.
One more factor worth considering is how much money you have to spend every month. Maybe your funds are limited. You’d like to get insurance for your phone, but you simply don’t feel like you can afford it. If it’s a matter of being able to afford monthly cellular service or being able to get the insurance, then most people would agree that having a working phone is the more critical thing, even if the device is uninsured.
All of that taken together is what is ultimately going to determine whether you get cell phone insurance or not. We can’t say definitively that you should or shouldn’t get it. What we’ll say is that you need to judge whether it’s worth it on a case-by-case basis, weighing each of the factors that we’ve mentioned.
If you have the money, you have an expensive new device, and you know that unfortunate things seem to happen to your phone frequently, then getting insurance might be a foregone conclusion for you. If you have a phone that’s several years old, you always take great care of your devices, and you’re on a tight budget, then that extra few-dollar fee per month is something that you can probably avoid.
