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Should You Really Insure Your Cellphone?

For many people, the constant connectability that smartphones provide has become a basic necessity. However, this may mean having to be dependent on a device that can crack almost as easily as an egg. With replacement prices up in the $300–$600 range, investing in insurance seems like a no-brainer. But, is cellphone insurance really worth the monthly premium?

Your Carrier Isn’t Actually Your Insurer

The most common way to insure a phone is through an option made available during checkout when you purchase your phone through your carrier. The average sales pitch claims you can replace your phone the very next day for as low as $50. Insurance premiums are low and conveniently listed on your monthly statement, so it appears as if the carrier is insuring your phone.

However, if you make a claim, you’ll find that you’re dealing with a different company entirely. Customer service can be hit-or-miss — according to hundreds of reviews from customers who thought they would be dealing with their carrier only to find that wasn’t the case.

The Replacement

When you file a claim, the replacement device might not be new. You could receive a phone that’s been refurbished by the insurance company — and it may be a phone that someone else sent in when they filed a claim. It’s also important to carefully read the terms of service in your insurance contract to see if they specify that your replacement phone is the same model as the one you originally purchased. If not, you could end up with a phone of a lesser quality.

Refurbished phones are not always reliable. You may run into problems just months after you receive it. Such issues may not fall under the phone’s warranty. If that’s the case, you’ll have to file yet another claim. With deductibles higher in the first 6six months after the last claim was filed, the fee can be pretty hefty.

Sales Pitch vs. Reality

The insurance sales pitch is designed to assure you that filing a claim is economical and hassle-free. However, it’s often just the opposite.

The first issue you’re likely to run into is your deductible. If you purchased anything but the cheapest phone on the market, the deductible you pay to file a claim in the first six to 12 months will probably be much higher than you expect. Most popular smartphones policies require a deductible between $100–$300 dollars. For that amount of money, you could afford to buy a new phone, albeit last year’s model.

Most types of loss are covered, but the fine print for each type of loss lists different requirements to file a claim and that may require some footwork on your end. If your phone was stolen, you’ll probably need documentation of a police report. If your phone was damaged, you’ll have to send in the broken device. This last situation isn’t a hassle if there was no personal information on the phone, but if you have photos or conversations you don’t want a stranger in a tech center to see, you’ll have to find a way to wipe the data. Depending on how your phone was damaged, this may be impossible. You’ll just have to hope the techies can restrain their curiosity.

Should You Insure?

If you absolutely cannot imagine going without a phone for a few days, insurance through your carrier might be worth considering, as long as you have the time to sit down and carefully read the terms of service. You can call your carrier and ask them where to find this document. Otherwise, you’re better off investing in a good case and setting aside money each month to help offset the cost of replacing a phone yourself.

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