According to the most recent statics, 1 out of every 5 wireless devices in the US may be stolen or accidentally damaged this year. Should I buy insurance for my cell phone? Well, it depends on the equipment and how extensively you will be using your phone. The cost of cell phone insurance is not cheap, especially for advanced devices like Blackberry smartphones. For a regular phone like flip phone or candy bar phone, Verizon Wireless charges $5.99 a month and you would have to pay $39 deductible with each approved claim.
Let’s say you bought a LG Accolade for $69.99 with a 2-year contract and start paying $5.99 cell phone insurance. At the end of 12th month, your phone is broken. At that point you have already paid $71.88. Then you call up the cell phone insurance company and verify that phone is covered. Now you have to pay $39 to get a replacement phone (same or of equivalent value) shipped to you. One thing to keep in mind is that in most cases they will send you a refurbished phone. So you end up paying $110.88. A brand new LG Accolade costs $199 without contract (12 months ago). Is it worth buying insurance for a new phone? No, at this time, you can definitely purchase the same mobile phone from eBay for $100. In the next post, we will talk about the insurance for smartphones.
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I think one factor you need to consider is the clumsiness of the owner. I dropped one phone in a bathtub and another in a toilet, both times early on in ownership. So when I got my Pre Plus, even though I am trying to be extra careful with it, I got the insurance because, frankly, I have a bad track record. Maybe I won’t need it, or maybe a year will pass before I need it, but it’s better than my cracking the screen in the first month or two and not having insurance.
Check the deductible for physical/water damage/lost phone then decide.
I dropped my Sprint Palm Pre on the cement after 10 months. The screen cracked and the power button broke off. The deductible for physical damage is $100 for smartphones/PDAs. If I had purchased insurance for $7/mo I would have paid $170 for a “like new” phone. Without insurance, the Sprint Repair Center charged me $119+tax forthe same “like new” phone. Even the Early Termination Fee would have been less than $170 after 10 months. I took a chance that I would discover any defects during the regulary warranty period.