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Is Insurance on Your Smartphone a Smart Idea?

Should you get insurance on your smartphone? The upfront, honest (and perhaps unsurprising) answer is: it depends on lifestyle factors, your budget, and what your other existing insurance policies cover. 

If you don’t have insurance on your smartphone and accidently drop it on the sidewalk, you could be out $600—$1,200 to replace it. Or you could end up paying for insurance coverage you never use. To avoid either situation, read on to learn more about the types of coverage, plan providers, and how to make the most of any insurance.

Plan providers

Smartphone insurance plans are offered by carriers, like Sprint; by phone manufacturers, like Apple; and by independent operators, like SquareTrade. While each insurance plan is different and enrollment periods vary, there are some general trends based on who offers the coverage.

Cell phone service providers often offer several insurance packages in a tiered system with maximum values on some types of claims. Coverage usually includes theft and loss, a limited number of phone replacements within a year, and an extended manufacturer’s warranty. If they do replace your phone, it will be the same model, but it could be a different color or refurbished. (A refurbished phone has been previously owned and used but has since been repaired, tested, and cleaned.)

Phone manufacturers, however, may not offer coverage if your phone is lost or stolen, but they do usually offer free tech and app support, which carriers do not, and they don’t usually have a monetary cap on claims. They usually have a lower phone replacement deductible, and will, if possible, replace an irreparably damaged phone with the same model and color, but it may be refurbished. Most manufacturer plans are capped at two years for accidental damage. 

Independent operators offer similar plans to cell phone carriers. Many do not cover loss or theft. They may require you to pay the premium up front for the entire contract.

Costs

Monthly premiums can range anywhere from $7 to $36. Deductibles, depending on the type of repair and the plan, can run from $29 to $225.

On the flip side, the out-of-pocket cost to fix a cracked screen—the most common repair—is about $277 for a Samsung S8+. A broken home button could cost you over $90. Headphone jack stop working? That’ll be $80. And if you lose or completely bust your top-of-line Galaxy S9+ or iPhone X, you’ll need to cough up the full retail price for a new one: $840 to $1,149.

Other options

If you think insurance might be the way to go for you, first check to see what types of claims might already be covered by your current insurance plans. Depending on the circumstances, a stolen phone might be covered under homeowners, renters, auto, or travel insurance. Ask about an electronics rider on your homeowner’s insurance that covers internet-connected devices (tablet screens break too!).

Simply buying your phone with a certain credit card can give you an extended warranty option, up to a year. If you pay your phone bill with a credit card, see if the company offers any protection against damage or loss.

Another option, if you’re unsure whether or not you should buy an insurance plan, is to create your own emergency cell phone fund. Pay yourself every month the amount you could afford for insurance (say $10–$20/mo.), and then you have the money if you need it (assuming enough time has passed for you to build up enough money); and if you don’t, you get to keep your money and spend it elsewhere.

Conclusion

If you have kids who use or have access to your phone, if you’re a dog owner, if you take your phone to a job exposed to the elements or unforgiving environments, if you use your phone on your daily jog—all of these things make it more likely that you’ll need one or more repairs a year on your smartphone, so insurance might be a good idea. But, if this doesn’t describe you, and you find out your homeowners insurance covers loss, theft, and/or damage scenarios, then perhaps simply having a cushion in savings is the best option.