Cell phone insurance… Should you or should you not?

So you walk into the Verizon store to pick up your shiny new Android phone with a huge smile on your face as the sales rep activates your new baby. Everything is going great. But then out of no where comes the question “would you like to add the insurance plan for your phone ?” and your mind comes to halt. At first you refuse to panic, and inquire as to how much this insurance is….surely it is just some nominal one time fee just to be on the safe side. The sales rep informs you with a very irritating smile that it is an extra seven dollars a month to your bill. Still, you refuse to panic. You simply ask how much the phone is to replace.  As a valued customer already paying at least $200 for the phone plus on average another $30 for the data plan you are sure that the replacement cost for your phone wont be that bad. The sales rep then informs you with an even more irritating smile that it is around six hundred to replace a broken phone unless it is covered by the one year limited warranty provided by the manufacturer. Panic.

So what do you do? You can either add an extra few dollars a month to be on the safe side, or trust to your case and the one year limited warranty. Either option is not appealing. It is at this moment that you realize that Verizon and all other phone carriers really have you by the (metaphorical) batteries when it comes to insuring your phone. I for one went with option C, which is to think about it before the end of 30 days at which point I will have to decide.

What did you decide? Do you think it is fair? Do you know of any alternatives to the choices talked about above? Let us know in the comments.

  • Mark

    Get it, my N96 suddenly stopped working, Vodafone UK send the phone for repair, it was unfixable and i was asble to pick any phone from their range! With a £25 excess.

  • Paul

    Tell em to shove it where the sun don’t shine. If you really must have insurance shop around there are plenty of placed to get that a lot cheaper.

  • Marshall

    I have the insurance. I somehow don’t have to pay the new $7 cost, but it’s still $5.95 I think. When I’m already paying over $80/month, it’s not that much different to me and I’d rather know that I can replace my phone for $50 instead of $600 if something happens. $5.95/month for 20 months (new ever 2 year deal) is at $119…for me at least. That’s a decent deal to me.

  • Joe Cell-boy

    Keep your old phone – if you drop your new expensive one swear for a day or so and then turn service back onto the old dull one.

    Then hit EBay and look for cheap replacements (or learn to live without the twitter!)

  • Ju

    I havent made a claim on any phone for the last 6 years, so I have decided I am a fairly responsible phone owner and decided not to take it out with my last purchase. Some people need it, as they are clumsy, forgetful etc… I would say, think about it, work out how likely it is you will need it, whether you have your old phone you can use if need be, and whether your household/car/personal insurance will cover it already.

  • Amanda Fultz

    I insure my phone for $40 a year through a rider on my homeowners policy. Lost, broken, cracked, stolen, whatever, it gets replaced with no deductible. Insurance is through State Farm.

  • http://www.chariotphoto.com Roger

    I hate having to pay for any type of insurance. Its like gambling, you either are betting that something will happen, in which case you get insurance, or you are betting that something won’t happen, in which case you don’t get insurance.

    I haven’t had a cell phone accident in over 10 years, but with a young child entering toddlerhood (aka the demonspawn years) and a new amazingly awesome Samsung Vibrant, that seems unnaturally thing, I decided to get insurance. $6 per month and a deductible of $90if anything happens to it, from T-Mobile USA.

    I have not tried looking around to see if there is any cheaper insurance, so it’ll be interesting to hear if anyone has found something cheaper from a third party.

  • http://cellphonius.blogspot.com/ Daniel

    I’d say get for one year, then drop it. The insurance, not the phone (grin). I echo Joe Cell-boy’s comment about finding a cheap replacement on eBay (I’d add Amazon and Craigslist). Keeping the old cell phone might help. For those who are up for a renewal and are addicted to Twitter and TalkAndroid, i’d keep the G1 or MyTouch 3g.

  • Raymond

    Well in south africa we a bit lucky! Warranty is two years and they fix your phone with no questions asked unless its water damage. So insurance would be for just in-case you lose your phone.

  • Cole

    I would say get it. I know I’m very hard on phones and rarely does it have one last more then a year. I actually just replaced my droid this way. Very easy and simple to do.

  • Jeff

    UK networks tend to charge £7 or so a month for insurance (£84 a year)

    A month cheaper, standalone insurance option is “CUSC Foneguard” who charge just £54 a year – http://www.cusc.co.uk.

    They also insure laptops as well.

    The one time I have had to actually make a claim on my CUSC policy, when my old SE K700 needed a repair, CUSC handled my claim efficiently and very quickly.

    I would definitely recommend these guys…

    Also, dont forget to check whether your handset(s) are covered under your home insurance policies.

  • Harold

    I always keep the insurance in place until:

    1. The carrier EOL’s the unit (usually well within the “new every two” period); and

    2. The price of units on the secondary markets (ebay, craigslist) drops to a point where buying a unit is less than 8-10 months of insurance.

  • curse

    I don’t know how it’s over in the US, but here in Sweden, things happening to your phone is covered by your home insurance(in most cases, and if not, it’s not covered by the extra phone insurance by the carrier either).
    They still sell the 69SEK/Month (about $7-$8) insurances for the phone to people still covered by their home insurance… in most cases, it’s just a waste of money.

  • Originaladrian

    I’ve never had the insurance. I usually don’t keep phones long enough to get insurance. The phones should be covered no matter what. I say don’t get it.

  • Mike

    The insurance plan I’m on doubles the manufacturer’s warranty from 1 to 2 years. That covers me through the 2 year contract with Verizon. Something to think about.

  • Greg

    I just tried using verizons insurance to replace my droid.and since the droid 2 is coming out they would only offer me a eris or devour.I bought a top of the line phone, and they want to give me something that’s not even close to the value of what I had.told them forget it, and went to the verizon store to plead my case.The nice rep ordered a new droid for me, and I dropped my insurance a day later.

  • http://thomashunsaker.com Tommy Hunsaker

    Get it, always. My G1 battery started dying quickly and randomly resetting my phone, T-Mobile support sent me a new one. If I ever drop it bad enough I get upgraded to the current generation Android device. I see it as a win-win, even though I’d prefer not paying and not ever have anything happen to my phone.

  • Chris

    I went with the full insurance. The extended warranty is good if you keep your phone for the full 20 months of a NE2 contract. The Other is good for if you have a bad habit of leaving your phone on a table at a bar or ever let your phone sleep in a mud puddle overnight only to find a few months later that it doesn’t work and the little stickers are clouded and what can you do. URghhhhh. Objectively $8 a month for 20 months is $160 Plus $89 deductible equals $249 total cost of coverage Plus $200 Initial cost of phone means if you have to replace one that you lost or that got stolen or you dropped in a glass of water when you turned the alarm off accidentally because really you were too asleep to have a glass of water and a phone that close to your bed is $449 approximately. No coverage you pay $200 for the initial phone then it gets left on the window seal at a local restaurant and a less than savory individual picks it up and uses it until it is shut off and then throws it away then you have to pay the $530 (DINC) putting you out $730 overall. Overall difference of $289. Now have no coverage and nothing happens in 20 months and well now it is $249.

  • Scott Posilkin

    Some very interesting responses. I like the idea of having the insurance until the phone is cheap enough to replace cheaply.

  • Danny

    My wife and I pay $5.99 per month per phone for T-Mobile’s Premium Handset Protection (their version of phone insurance) and it has saved our bacon during the past year. If you’re planning on hanging onto your phone for more than a year, then it’s definitely worth it. We both usually see something go wrong with our phones sometime shortly after the 1-year mark, and the process we’ve had to go through to get a replacement phone has always been quick and painless.

  • Chabuku

    I opted to not get insurance on my MotoDroid, with the reasoning that my last phone (an LG) I had insurance on, I went through like 4 of them, used insurance only once (it broke of its own accord 3 of the times), then ended up that last time paying for the one-time replacement fee that comes with the phone.

    On a feature-phone it was $50. I’m not sure if it’s more for a smart-phone but I imagine it’s like $100. $7 a month for insurance, plus an extra $100? I calculated the costs of paying the then $5 insurance on my feature-phone and when it came down to how much I paid by the time I was done, I could have bought a new phone.

    Then again, I might be easier on my phones than some (though 3 broken phones? Surely it’s me at this point) I don’t lose them or let them be in a position to be stolen (like leaving it out on the table at a restaurant).

    By the time I was done with my last phone I was ready to be done with it because it was so out-dated at that point.

    I felt I wasted my money on insurance. If I had dropped it in a lake after 1 month, I wouldn’t have felt it was a waste, but then I would be an idiot one way or another, and would be wasting my money that way.

  • http://blog.hypercubed.com/ Hypercubed

    There are people at the mobile phone company that are well paid to calculate the risk of you losing or damaging your phone. Based on this risk they calculate the price they have to charge you in order to not just break even but make money, likely lots of money. Money for the share holders, money for administrative overhead, and money to pay their high salaries for calculating that risk. They have done the work and you can rest assured that the price is set in their favor not yours. So unless you absolutely cannot afford to replace the phone if an unfortunate incident occurs or you think you are particularly accident prone you should refuse the insurance. By doing so you are saving for yourself the money that they would have earned… yet they did the work. The way I see it not getting insurance is like getting a free lunch.

  • http://www.freewowtimecard.com Margart Schlichenmaye

    Hi. Thought I would chime in and show appreciation for the post. Keep up the good work and the great stuff rolling.

  • texaganian

    I’d pay the insurance and not complain if the insurance company gave the consumer an even break… but they don’t.

    First, the deductible is out of line.

    And worse, they don’t necessarily replace your phone with the same thing… or even an equivalent. Try getting a replacement for a Droid and see what dreck they are willing to give you in exchange. THAT should be illegal.

  • Barry

    It is a waste of money. It is a scam. they will find any reason not to pay. They would not pay mine because of a scratch. Don’t waste your money!

  • galaxor

    Does any body know of any other companies that provide the insurance for a phone in canada? I have a couple of days left before deciding, I need to know if I should takes BELL’s Insurance…

  • spookie

    I just spent 3 hours on the phone with Asurion, the company that underwrights all of the US carriers’ insurance policies.

    I have never carried or believed in cell phone insurance before I purchased my HTC EVO 4G in July. Then, at the urging of the SPrint rep, I bought it to cover my $600 phone. On Labor Day, I went riding my motor scooter, my EVO clipped to my back pocket. When I arrived home, the phone’s holster was still clipped to my back pocket, but the phone wasn’t in it. So I went directly to the SPrint store and they filed the insurance claim on my behalf. They put me on the phone with the Asurion representative who told me where to download the forms necessary to back up the claim, and the store manager downloaded those and I filled them out in the store so the manager could fax them right then. Asurion confirmed they had received the forms and told me it usually took 24-48 hours before a phone is shipped. He instructed me to check my claim’s progress online at the company’s website. From that day forward, every time I entered my claim number online the following was displayed: “Your claim is being processed. Please check back in 24 hours.” Every time I tried to call the phone system encouraged me to use the online claim system, and when I proceeded with the phone system it asked me to enter my number. Although my phone’s display showed me entering the number correctly, the system always got one or two numbers wrong, then after three tries disconnected me after telling me to call again when I could correctly enter the number. After two weeks I called customer service for Sprint. The young lady who answered my call assued me I needn’t worry, the claim had been processed but EVOs are in short supply so it would take a little time before I got the phone. I insisted she connect me with a supervisor and she cold-transferred me to another rep who was not a supervisor. I insisted she transfer me to HER supervisor, which she did. Her supervisor placed a conference call to Asurion with me and Asurion claimed that I had never sent the claim forms. I pointed out they were sent from the Sprint store and I had confirmed with Asurion they had been received before I left the Sprint store. I was informed that I needed to resend the forms. The Sprint supervisor suggested that I email the forms to him and he would fax them to Asurion, then confirm with Asurion that all needed paperwork was received. This was done and I began waiting anew. For another week, when I checked the claim number online it continued to say: “Your claim is being processed. Please check back in 24 hours.”

    One week later, I spent 3 hours trying to reach Asurion with the wonky phone system. Time after time the system would misread the numbers I entered (remember, the phone displays what I punch in) and told me to call back when I could enter the numbers correctly. Finally, I reached a person. She informed me that the claim would not be processed until I faxed them the same documentation I had now sent–and confirmed receipt of–TWICE! I explained that I had confirmed their receipt of the documentation and had people who witnessed that confirmation and the onus was now on them. She said she would put me on hold for 1-2 minutes to verify this. After one hour I was still on hold. I hung up and began the time-consuming process of getting through again. When I did I insisted on a supervisor.

    The supervisor reiterated that they were waiting on my documentation. I explained that the documentation had been sent and Asurion had confirmed receipt BOTH one week ago and three weeks ago. The ball was in their court. He suggested that I fax the documentation to him so he could process the claim. I told him it seemed to me I had done my part and was waiting for him to do his. I agreed to re-fax for the third time ONLY if the claim was processed on the spot. He agreed, I sent the documentation and he approved the claim. He then told me that I would have to wait until they got their next shipment of EVOs in. I asked when this would be and he said one to two weeks. I pointed out that if they had processed the claim when I first sent the documentation I’d be getting one of the EVOs from the LAST shipment and I felt I was entitled to that. He said he’d agree to a reimbursement if I bought an EVO locally. I pointed out that I’d still have a one to two week wait that would be over if they’d processed that claim when they first received the paperwork.

    Meanwhile, I have an EVO because I need the hotspot functionality, so I had to purchase a $600 Samsung Epic (they’re available) to have this functionality in the meantime. I have a buyer for the Epic, but I’m still inconvenienced since the Epic is definitely an inferior phone.

    Now, I don’t see a problem with replacing an older phone like the Droid with something equally old. I am replacing a bleeding-edge device. In my opinion, Asurion is in business to collect premiums, and they make it their business to NOT pay claims.

    If I receive an HTC EVO 4G anytime soon, I’ll be surprised. I will NEVER, EVER purchase cell phone insurance again.

    • Kathleen Sisco

      What a nightmare; but this is a normal response when a company does not really want to do something they contracted for but never expected to do. I am an ATT customer who had to ask for a replacement when one of my two cels (my son’s) was lifted and ran over. This was 2 months prior to the end of my 2 year contract. I was told the replacement cost (for which I had carried insurance on both phones the entire contract time) was $200 which I thought was exorbitant. Alas, it was not so, I was told it was $300. I suspect that the price for replacement was raised during the time of my contract—which surely qualifies as a bait and switch–over which we wrangled for some time. As this is not a Jack the Giant Killer story, I eventually gave up.
      My policy now is just to stand back and throw money.

      I did refuse to get another 2 year contract which is now 30 months or the Next program, so continued the ATT service on a month to month. My son found a phone he liked unlocked and then I purchased the same model from New Egg.
      My phone has nothing to do with ATT but since my sim was locked previously and not unlocked yet as I thought it would be automatic (another story) but no they have to send code, etc., I live in fear of having to ask for the sim to be unlocked.

  • smiling student

    Get it if you can afford it, if you can’t be gentle with your phone. I work as a sales rep for a major Canadian cell phone provider and because I have a corporate plan I am unable to add it on…. but… I would if I could!!!
    (I guess if you have a cheap phone then don’t bother)
    This article kind of bugged me, because it insinuated that this service is some sort of unfair manipulation. Cell phone companies purchase phones from manufacturers, and are the middle man in selling them to you, but just because you are a “loyal customer” and happen to pay your bill (for the service you have chosen to purchase, after getting a huge discount on the phone– up to 400$) you can’t really expect these businesses to front the cost for damages to the phone that are the result of physical/ liquid damage. These things are your fault guys!!
    I love to shop at costa blanca, and I do often, but if i buy a shirt and then get a rip in it two months later… do i march into costa blanca and insist that they replace it for free? because I am a loyal customer? Do I proudly announce to the sales rep there that I have been shopping at costa blanca for TEN YEARS, and that “in this day and age, with all this competition…. well…… don’t they owe it to me?
    Only in the cell phone world does this mentality seem to make sense to people.
    You are paying for a service guys!!! It’s not rocket science!
    If you don’t want it, don’t get it. But don’t say that having the option is unfair!

  • neutral party

    smiling student, your logic is faulty. If you bought a shirt from some store, you are not paying that store an exorbitant monthly fee for the shirt. You are not in a 2-year contract with that store which you cannot get out of without paying large sums of money. So, your analogy is bad. Of course it sounds silly to go into a clothing store and complain about a ripped shirt. But like it or not, cell phone providers have tied themselves to their customers through contracts and monthly fees, etc. I’m not saying it’s a bad model, but the onus of that is NOT on the customer – it’s on the cell phone providers.

    Now, having said that, I agree that customers shouldn’t expect cell phone providers to cover accidental damage or loss of cell phones. I didn’t read where anybody said that they should. Maybe you are tainted by customers coming in to your store and complaining. But as long as the cell phone providers are selling insurance, they are going to get angry people complaining about how the insurance company screwed them – because that’s what insurance companies do. I think it’s part of their mantra or something. They want you to pay around $170 over a two-year period and then, if there is any loss, then you get to pay a deductible on top of that even though in two years, the phone you have is likely not even worth the deductible.

    It’s a tough one. But I will say that everyone needs to be more careful with their phones so that the price of insurance can come down. Stop breaking them, people! You’ll help us all out. :)

  • Probably in need of insurance

    I haven’t even had my G2 phone for 2 weeks yet, and I’ve already dropped it into a cup of Mountain Dew and dropped it on my tile kitchen floor. Fortunately, it still works, but I think I should probably buy insurance.

    I’ve been comparing T-Mobile’s plan (which actually goes through another company) with other companies I’ve found online, such as Squaretrade, Ensquared, and Worth Ave Group. They all offer lower rates and a lower deductible that what T-Mobile offers, but I’m wondering if they companies behind them are trustworthy. Has anyone had any experience with any of them?

  • wes

    I contacted my home insurance company and they added a no deductable insurance to cover up to $2500 in electronics for $40 a year. It not only covers the phone, but anything else that may experience a loss like my laptop. $3.33 a month for zero deductable sounds a lot better than anything else I found. Since I pay my premium on a monthly basis, it really is just $3.33 more a month.

  • Scott in NH

    The insurance is nearly always a rip-off. I’ve been paying the $7 a month to t-mobile for 18 months. I just had to pay the $130 deductible to get a replacement HD7. That’s $256 I’ve paid in insurance to get a phone that costs less than that on e-bay, brand new, unlocked. And… they may send me a refurbished model which is worth only $99. If the insurance cannot save you money it isn’t insurance at all. It means if my phone didn’t break I would be down $256 and if it does break I’m still down!  That, my friend, is a guaranteed rip off.