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?