Should You Get a Cell Phone Insurance?

Do you or someone you know use a cell phone?  With billions of cell phones in use across the world everyday, the answer is likely a resounding yes.  In fact, finding a household without at least one cell phone would prove to be challenging in today’s society.  Cell phones are an integral part of our lives, with many people using their mobile device for more than just checking in with friends.  In the past few years, cell phones have evolved from a convenient way to keep in touch into electronic devices with computer like capabilities.  Many of the popular cell phones in use today cost hundreds of dollars.  As such, is cell phone insurance still optional or is it something we should all have?

What You Need to Know About Cell Phone Insurance

Without putting much thought into the matter, you might assume that paying for cell phone insurance is a no-brainer.  Who wants to pay hundreds of dollars for a new cell phone only to be out that money if the phone is lost or damaged?  The issue with cell phone insurance is not whether or not you need coverage and protection for your phone, but rather how much protection is offered.  Of the protection that is available through insurance, is that coverage worth the cost of insurance premiums?

Let’s consider a few basic facts to find out if cell phone insurance is the best move to cover the cost of a lost or damaged phone.

How much will you pay?

Many cell phone providers offer insurance for around $5 per month.  This fee is pretty affordable for most users.  Paying for cell phone insurance from your provider is easy and convenient.

What is covered?

At first glance $5 per month appears to be a fair amount to pay to ensure your phone is insured, but what exactly does this insurance cover?  This is where a large number of cell phones users quickly learn that cell phone insurance may not provide that much coverage.

For example, your cell phone insurance may or may not replace your phone with the exact model that was lost or damaged.  It is not uncommon to receive a refurbished or used phone in place of the original device.  In addition, the replacement might not even be the same type of phone that you paid insurance to cover.  There are plenty of exclusions, loopholes and special requirements which have to be met in order for a person to actually benefit from cell phone insurance.

Don’t forget the deductible.

In addition to not always having coverage or having your phone replaced with a “comparable” device, you can’t forget the deductible.  That is right, you have to pay from $50 to $150 out of pocket before your insurance kicks in.

Cell phone users should carefully weigh the pros and cons of cell phone insurance before agreeing to a policy.  A few bucks a month will likely not break the budget for most users, however that money might be better invested in an individual savings account set aside for cell phone emergencies.  At the end of the day, it is a personal decision which should be based on your own financial needs and determined by the actual coverage provided by your carrier or third party insurer.

Get your life insurance quotes now, or you can also check out these list of insurance companies that can provide you with free quotes:

About the Author

By , on Feb 1, 2011
Tisha Tolar
Tisha Tolar is a co-owner of Trifecta Strategies, LLC and the author of Gen X. When she is not busy being a fiction writer, she writes personal finance articles for several web sites, including Moolanomy.com.

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Leave Your Comment (3 Comments)

  1. Bruce Wye says:

    Since I’m with prepaid company Net10, cell phone insurance isn’t offered because the phones are sold without a contract. It really isn’t an issue of protecting your phone when they are easily replaced because you can buy another at Target or Walmart or just online. The prices, again because Net10 is prepaid and offers no contract, can be stepp to some but you have the same options with any contract carrier.

  2. The only reason I’m having this insurance is I probably won’t lose the phone. Many people never lose or break their phones, so the money paid out for insurance is money down the drain. But what if I do? Try this instead of buying insurance: Every month I have the phone put the $5 premium money into a mayonnaise jar. If the phone is lost or stolen or completely breaks down, add the $50 or $100 that I would have paid for the deductible and go buy a new phone. If nothing happens to my phone, at the end of the two years I have an extra $120.

  3. Money Beagle says:

    Keep in mind that you don’t have to get the insurance through your provider. We used SquareTrade, and with a 30% coupon that they have pretty regularly, we were able to insure both of our BlackBerry’s for less than it would have cost to insure one of them with the carrier, and the deductible is $25 less as well.

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