Is Smartphone Insurance Worth It?

Buying a new phone is exciting, especially if you’re a techie like I am.  I purchased a new Samsung Galaxy 3 the other day and I couldn’t be happier with my purchase.  My old phone was not responsive at times, and the buttons were starting to stick.  The phone cost $160 and I’m locked in to a three year deal with Rogers, but that’s not too bad considering they allow you to modify your plan whenever you want.  In my new job they are going to be paying for my personal phone instead of giving me a work phone (I didn’t want to carry around two phones), making one less bill to pay each month, allowing me to justify this purchase.

Smart phones – They Are More Expensive Than Your Dishwasher

These phones pack a punch and allow you to do anything electronic

  • Start your car
  • Change TV channels
  • Watch TV
  • Take HD photos
  • Take HD video
  • Edit and email photos and videos
  • Use your phone as a GPS unit
  • Remotely control your computer
  • Change songs playing in your home theater system
  • Use Bluetooth
  • Play movies from your phone on your TV using DNLA technology
  • Use the internet
  • Use voice commands to get your phone to do things (ex: send texts)
  • And last but not least, make phone calls

A smart phone is not the best device to be doing each thing here, but it does the job well enough for all the tasks above.  With all of the technology packed into a device that can fit in your hand, it makes it rather expensive.  These phones without locking in a three year plan can be anywhere between $500-$800. My Samsung Galaxy 3 is worth $600 without any plan, so when they try to sell me insurance on the device I think about it more than I would with the standard flip phone.  For my phone, you get one year of manufacturers warranty, plus an additional year because I paid with my MasterCard.  I haven’t looked at the fine print yet, but I imagine that this warranty doesn’t cover anything accidental such as liquid damage or dropping it.  Many of the insurance plans that retailers sell are anywhere from $7-$10 per month and they just include it on your bill.   I did some quick research and found Ensquared which is a Canadian company that sells phone insurance for a flat rate of $70 for one year, and $100 for two years. Below is a table of what kind of coverage is included.  There is a $95 deductible plus a $35 admin fee and it covers up to $1300 per claim.

General Product Coverage Components
Accidental Damage

Yes

Liquid Spill

Yes

Power Surge

Yes

Theft

Yes

Lost Device

Yes

Flood

Yes

Vandalism

Yes

Fire

Yes

Misuse and Abuse

No

Loss of Data

No

Extended Warranty Coverage

Yes

StandardBattery

Yes

Home Charger

Yes

I’m pretty careful with my phones and I have an office job, but I do go back to the farm occasionally, where it’s more likely to get damaged.  Personally I’m still on the fence with phone insurance, maybe if I’m lucky work may cover it, but for now I think I’ll hold off.  Students on the other hand can benefit from these types of insurance plans a lot more than I can.  For example: I know a girl who would keep her phone in her bra while at a bar, and after a long night of dancing her phone would be fried.  It turns out there was enough moisture in her cleavage to wreck it, and she went through four phones before I told her that her bra storage might be the problem.  Furthermore students tend to be “harder” on their electronics than the standard user, especially if they drink a lot, so they might find insurance helpful.

Insurance Options

Some retail stores like Future Shop or Best Buy have an “In-House” warranty plan and can make things easier on you when you are making a claim.  I have heard good stories when it comes to their plans and they often just hand you a brand new phone instead of trying to fix the old one.  With Bell, they give you a replacement phone while they ship yours off to the manufacturer.  You have to learn how to use the loaner phone and wait a good 3-4 weeks before you see your old phone again (this is the standard manufactures warranty, not additional insurance).  Be sure to check out different options and choose the one with the least amount of hassle. I use my phone for everything and it’s hard to make do without it.

What it all comes down to is your preferences and how destructive you are with your phones, and what your lifestyle is like. My brother is about to get an Iphone and I would suggest insurance for him since he is a farmer.  If a guy like him drops his phone it could land in a number of places that would cause immediate termination.  It’s also likely that he can lose it in a field or pasture very easily so paying the deductible once or twice is better than shelling out $500 each time he would wreck the phone.

Readers: Do you have insurance for your phone or tablet? Are you considering it for the future?

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I am not sure about it; simply because till now I have lost one phone and it was a Pebble (very smooth and suppose slid out of my pocket). Got a replacement on my plan. Having said this, my iPhone is insured through my bank account – one of the perks.

I have AT&T in the US and I can upgrade every two years. For me the insurance isn’t worth it because I would have to break either every phone I have or every other phone I have to make it worth while. I’ve never broken a phone so I’d rather just self insurance and keep my old phone in case anything catastrophic happened to my smart phone…

Michael

Considering the average insurance plan costs $8-10 per month and there is a deductible anywhere from $50-250, it simply is not worth it for me. I take great care of my phone and by the time something happens, it’ll be ready for upgrade pricing.

I typically stay away from extended warranties and insurance. By making my monthly payment with my credit card, I receive cell phone insurance. I haven’t had to use it yet so I don’t know the fine print :/

I would be interested in the details on that. I have an iPhone and would love to get free replacement insurance if possible.

I have to start by saying that I don’t have a smartphone, so I’ve never considered getting the protection plan on my old flip-phone since it isn’t worth much. But you’ve made it clear that if I ever DO upgrade, the insurance plan isn’t a bad idea (especially since I have two kids who think my phone is one of their toys).

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