Phone Insurance – Everything You Need to Know

Let’s say that you just got yourself a brand-new cell phone. It’s a top-of-the-line model, and you’re pretty excited about it. Now’s your chance to learn about its various features and to set it up the way that you like it. However, one more question remains before you do so: you have to decide whether or not you want phone insurance. In this article, we’ll discuss insurance for your cell phone, including how it works and some of the most common options that are out there.

Should You Get Phone Insurance

The Difference Between Your Cell Phone Warranty and Insurance

Phone Insurance and a Warranty are Different

The first thing about which you should be aware when it comes to this topic is that the average new cell phone comes with a one-year warranty. If you buy a used phone from an online or a brick-and-mortar entity, then there is no guarantee of this. Your used cell phone might come with a ninety-day warranty if it is certified pre-owned, or it may come with no warranty at all. Make sure that you pay attention to the fine print as it relates to this issue.

You could also buy an extended warranty at the time you purchase the cell phone. For instance, if you buy an iPhone, then there’s the popular Apple Care+ plan that the manufacturer is sure to mention to you. Warranties typically cover hardware malfunctions and manufacturing defects. It’s certainly worth considering getting an extended one, particularly when you look at how much a brand-new cell phone costs from one of the more prominent companies.

What you need to understand about warranties, though, is that they are not the same as insurance. The main difference is that while warranties don’t cover things like accidents, most insurance plans do. For instance, if you get cell phone insurance, it should cover a cracked screen, water damage, and things of that nature.

An Apple Store

If you’re trying to get your phone fixed under the warranty, then usually, what is required is that you take it to the manufacturer. This might involve going to a brick-and-mortar store, like an Apple Store, for instance. If there isn’t one near to you, then you may have to mail your phone in. You’ll be obligated to show the proof-of-purchase date, so it helps to have a receipt handy.

The Basics of Cell Phone Insurance

Now that we’ve established that cell phone insurance and the warranty are different things, let’s move on to why you would want to have both of them. Simply put, insurance covers several eventualities involving your phone that the warranty doesn’t. We’ve mentioned problems like cracked screens or water damage, but most insurance plans will also include things like your phone getting lost or stolen. As you go out into the world with your cellular device, it’s nice to have such a plan in place.

Insurance for your phone is always going to be optional. You’re not obligated by any company to buy it when you purchase one of their products, and if you feel like you can’t afford it or it isn’t worth it to you, that’s your prerogative. It’s peace of mind, but it is by no means a necessity for phone owners.

Phone Insurance Options

Sprint offers phone insurance

In the cellular phone market, there are four companies that dominate, and they are sometimes referred to as the Big Four. Those are AT&T, Verizon, T-Mobile, and Sprint. All of them have insurance programs that they’ll be glad to offer you when you sign up with them. Most of the other, lesser-known providers have insurance options as well. 

Cellular service providers like it best when you purchase or lease a phone from them, and they’re able to track the cost of monthly insurance onto the bill. However, in most cases, even if you already own your own phone and you bring it to one of these providers, they’ll be willing to offer you insurance for it.

How much that insurance is going to cost is based on several different factors. Among them would be how new the phone is, how much it is worth, and whether you want a more stripped-down version of the insurance or one that covers everything. Some of the cellular service providers offer multiple different insurance plans. The more expensive ones are those that include premium options. Those might be something along the lines of tech support or additional security features.

AT&T, Sprint, and Verizon carry plans through a company called Asurion. T-Mobile offers theirs through Assurant. For the most part, you’ll need to notify your cellular service provider that you want insurance through them within thirty days of your signing up and taking possession of your phone.

You Can Also Purchase Insurance through Third-Party Options

Buying insurance for your phone through a third party is also an option for you. If you go that route, then the main thing to keep in mind is that if something happens to your phone, like it falling in a lake or getting stolen, then you’ll need to file a claim and go through that third party exclusively. Your cellular service provider won’t have anything to do with it.

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There are several different third-party companies out there that can give you phone insurance. The real question as to whether you want to go through them or your cellular service provider is what comes with each plan and how much each one costs. 

You might feel like the price or the perks with a particular plan are better than what’s offered by another. For the sake of convenience, though, it’s nice to get your insurance from your cellular service provider. That way, if something unfortunate happens to your phone, you don’t have to deal with another, a separate entity.

A Few Critical Things to Remember

Read the Phone Insurance Fine Print

If you have an insurance plan with your cellular service provider or a third party, that does not immediately guarantee that everything that happens to your phone will be covered. Read over your contract very carefully before you sign up, just as you would with any insurance policy. In some situations, you’ll still need to put some money down to get your phone replaced or repaired. It just won’t cost as much as if you didn’t have any insurance at all.

A big part of these calculations has to do with deductibles. In that respect, phone insurance is the same as health or car insurance. Generally speaking, the best insurance policies have low deductibles. The deductible is going to be the amount of money that you have to spend out-of-pocket, usually within a calendar year, before the insurance takes over and pays the rest. Coverages with high deductibles aren’t as good, but such policies are generally cheaper to purchase. This applies to all forms of insurance, not just for your phone.

Getting insurance for your phone, or electing not to get it, can be seen as a form of gambling. Again, that is much like health insurance, car insurance, homeowner’s insurance, or virtually any other kind of which you can think. If you don’t get insurance, then you are taking the gamble that nothing is going to happen to your phone. You probably feel confident that you’re not going to lose it, get it stolen, drop it in a puddle, etc. 

In trying to determine whether you should get insurance or not, you might think about things like how responsible of a person you are. It is a reality that some individuals have more of a tendency to misplace things. If that sounds like you, then the idea of paying a few extra dollars per month to protect a phone for which you paid $1,000 or more might not seem unreasonable. Maybe you often break your electronics due to dropping them or things of that nature. If so, then phone insurance might not be as much of a luxury for you. It might be a necessity.

Some of the finer points of these insurance plans can get a little confusing. In the event that you’re not sure about some of the fine print, it’s always helpful to have a friend or a family member read the contract before you sign. Make sure that you understand every provision in the plan fully. That way, you won’t ever get stuck with a nasty surprise if something that you thought was covered turns out not to be. 

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