Four surprising things about cell phone insurance
You dropped your cell phone (again). And this time, it was into a pool.
Thankfully, you opted for cell phone insurance 鈥� but how much do you really know about your plan?
You鈥檙e probably aware that policies cover lost, stolen or damaged phones. What you might not know, however, could fill a book 鈥� and it would be a shocking read. Consider this the Cliff鈥檚 Notes.
1. Your deductible could equal the amount you paid for your phone.
Right now, you can buy a new iPhone 6S with a two-year contract from听听for $199.99. To insure it, you might sign up for Sprint鈥檚 Total Equipment Protection, which costs $11 per month. But break that shiny new phone, and听.
That鈥檚 because carriers heavily subsidize cell phone prices when you sign a contract. The retail price for an iPhone 6S is nearly $650. Installment plans, which often require no upfront payment for the phone, simply spread its cost out over your contract term.
2. You don鈥檛 have to buy insurance from your carrier.
Wireless carriers are in the business of selling phones, not insuring them. For that, they rely on a third party, typically a company called Asurion. So if you鈥檙e looking to switch carriers because of a bad claims experience, know that you鈥檒l likely be dealing with the same insurer elsewhere.
But you usually don鈥檛 have to get insurance through your carrier. Companies like SquareTrade will cover your device against damage and defects for a fraction of what carriers typically charge.
3. You have little control over your replacement.
If you make a claim, your insurance company will try to give you a replacement of the same make and model 鈥� but they don鈥檛 have to. So your new phone could be a different color or type. It might not even be new.
鈥淭o be able to get the customer back in the same make and model, we use a mix of both new and refurbished phones to ensure adequate inventory is available,鈥� says Bettie Colombo, a spokesperson for Asurion.
4. You can get dropped from your plan for making a claim.
Most insurance providers cap your claims at two in a 12-month time frame. This can be a problem for the particularly accident-prone. The trouble is, those are the people for whom cell phone insurance makes the most sense.
If you鈥檙e rough with your phone, cell phone insurance is a wise investment. But more than half of American adults have听, according to a recent study by听.
If you鈥檙e among them, keep in mind that you could spend hundreds in premiums over two years and never make a claim 鈥� and if you do, the deductible could be as high as $200 for a top-tier smartphone.
Cell phone protection plans by carrier
These basic insurance options from the Big Four carriers cover lost, stolen or damaged phones. They don鈥檛 cover phone malfunctions, but carriers often offer extended warranties packaged with insurance. Customers are typically limited to two claims in a 12-month period.
| 听 | Monthly fee | Deductible |
|---|---|---|
| $7.99 | $50-$199, depending on device. Could drop by 25% to 50% with the company鈥檚 declining deductible program. | |
| $9-$11 | $50-$200, depending on device. | |
| $10 | $20-$175 | |
| $7.15 for smartphones, $5 for basic phones, tablets | $99-$199 for smartphones, $49-$199 for basic phones, tablets. |
Other coverage options
| 听 | Cost | Covers | Deductible |
|---|---|---|---|
| $99-$129 for two years of coverage. | Damage (two incidents) and phone malfunctions. | $79 or $99 per incident, depending on model. | |
| $119 for two years of coverage. | Damage and phone malfunctions. | $99 for all claims. |
Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email:ksheehy@nerdwallet.com. Twitter:听.
This article was written by and was originally published by听USA Today.
