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Is Phone Insurance Worth It?

If you’re looking for the best deal on a new phone or wireless plan, and you’re wondering whether to get phone insurance, read on.

There’s a lot to love about smartphones, but one consistent complaint about these marvels of modern engineering is how easy they are to break. A screen protector and strong phone case can help, but cell phone insurance provides the ultimate protection. Given the fact that fixing a cracked screen can cost a pretty penny, cell phone insurance is worth considering. 

As you decide what kind of cell phone protection is right for you, there are several factors to keep in mind, including your tolerance for risk, your willingness to live with a cracked screen, and your ability to afford to replace your smartphone outright in the event of damage that isn’t covered by your manufacturer’s warranty.

What Is Cell Phone Insurance and How Does it Work?

Phone insurance works much like any other form of insurance. Just like car insurance or home insurance, for a regular monthly fee, you are financially protected against paying in full for any necessary repairs on your smartphone. In addition to repairs, cell phone insurance can also cover a lost or stolen device.

Insurance plans are protection plans that are normally paid on a month-to-month basis. Like other forms of insurance, in addition to requiring a monthly fee, plans include a deductible. This deductible is the amount you pay as a consumer before the insurance kicks in to cover the rest. Before agreeing to any insurance company’s plan, ensure you are happy with the deductible. 

You make claims through this insurance either online or over the phone. Once an insurance claim is made, an agent reviews it, and you can track the process through your carrier, the manufacturer, or wherever you got your insurance.

Who Offers Cell Phone Insurance?

You can purchase cell phone insurance plans in several ways, whether from carriers, manufacturers, retailers, or third-party insurers. 

Phone Insurance from Wireless Carriers

Most major mobile carriers offer insurance plans for the phones they sell. Verizon, T-Mobile, and AT&T all use Asurion to cover their claims, but they vary based on their unique offerings. Here are the smartphone insurance plans from some of the top carriers:

Device Manufacturer Phone Insurance

Some smartphone manufacturers offer their own insurance and protection plans. Here are just a few examples of what’s available: 

  • Apple: AppleCare+ is available for iPhones, which covers accidental damage and offers extended warranty services for a one-time fee.
  • Samsung: Samsung Care+ provides coverage for accidental damage, breakdowns, and more—splitting their pricing into four tiers across packages. 
  • Google: Preferred Care for Pixel devices covers repairs or replacements for Pixel and Pixelbook Go for a monthly fee that varies depending on the device. 

Third-Party Phone Insurance Providers

Some companies specialize in providing insurance coverage for electronic devices, including cell phones:

  • SquareTrade: Covers a variety of electronics, including smartphones.
  • Assurant: Provides mobile device insurance for various carriers and manufacturers.
  • Worth Ave. Group: Offers insurance for various personal electronics, including cell phones.

Retailers and Credit Cards

Some electronics and big-box retailers offer insurance or protection plans for the devices they sell, and some credit cards also help cover your device from out-of-pocket repair costs:

Best Buy provides its Geek Squad Protection plan, while Walmart also offers protection plans for electronics, including cell phones. Credit cards like Chase Freedom Flex℠ and The Platinum Card® from American Express provide coverage for electronic devices up to a certain amount as part of their offerings. 

What Does Cell Phone Insurance Not Cover?

While phone insurance does tend to encompass a lot of the most common smartphone issues, there are some important things that it will not cover.

Fixing a Tampered Phone

Most companies don't want you messing around with the hardware or software that you get off the shelf. While it is popular in some circles to modify your phone to operate differently than it is meant to, be aware that it does come with some risks.

Tampering with a phone can come in many forms. Some people try to add upgrades of their own to the device by changing the hardware and adding new parts. Others will try to jailbreak a phone, giving it access to a wide variety of features that are not normally compatible with the device.

Either way, these are no-goes if you want coverage. Insurance will not pay for any damages you inflict on your phone while tampering with it.

Cosmetic Flaws

If your phone is still entirely usable, your insurance likely won’t cover it. This means that scrapes along the side or scratches that make the phone look less appealing are not something you can get a discounted fix or replacement for.

Thankfully, a cracked screen is usually covered. Many insurance plans offer screen replacement with a certain deductible, meaning you can replace your phone screen even if the device is still usable. Check with your plan provider to see how much damage is necessary before you are eligible for a screen replacement.

How Does a Warranty Differ From Phone Insurance?

Generally, a manufacturer’s warranty on a phone lasts one year and is included with the purchase of your device. If you experience hardware or mechanical failures during the initial warranty period, you can have your phone repaired, replaced, or refunded in full. 

Software failures are usually covered, provided the manufacturer is at fault. Some warranties also cover damages caused by user error, but most are designed primarily to protect you from getting stuck with a defective product.

Some companies offer extended warranties, meaning you can pay extra to have your warranty period last longer.

Should You Get Phone Insurance?

There are many options for people who want to protect their phones, which begs the question: Is cell phone insurance worth it? Insurance is a great way to ensure a new device is fully functional with minimal anxiety around necessary repairs. However, it's important to note that your payments remain consistent over time while the value of your device continues to decrease.

If you own your phone for long enough, you’ll eventually pay more for your cell phone’s insurance than it’s worth in trade-in value. This is what we call Total Cost of Ownership–the total cost of purchasing, using, and keeping your cell phone from when you buy it to when you trade it in for a newer device. 

Here’s an example of whether or not insurance for your phone makes sense: 

Phone insurance costs vary, but they average around $15 a month. Considering the average lifespan of a phone payment will likely be between 24 and 36 months—you’re looking at $360 to $540 in insurance costs. Knowing that trade-in deals usually require your old device to be in good working condition, phone insurance is worth it up to the point it costs you less to replace your device outright than the total sum you’ve paid for insurance.  

Phone Cases and Why You Need One  

In addition to cell phone insurance, phone cases and screen protectors are a great way to safeguard your devices. Even the most careful among us have moments when our phones slip from our grasp, leading to inevitable minor scuffs and marks. A damaged phone screen can become unresponsive over time, necessitating repairs. Moreover, a shattered camera lens can drastically reduce photo quality if it allows you to snap pictures. The proper case can offer water resistance, shield your screen when it falls on its side, defend your camera, or provide a combination of these protections.

Are you thinking of upgrading in the future? Investing in a protective case is a wise move. A phone riddled with scratches or significant damage will fetch a much lower value.

The Bottom Line

Screen protectors and phone cases are a must-have, and the addition of cell phone insurance can provide peace of mind and save you money in the event of covered damage, theft, or loss early in the life of your phone. However, at some point, paying for insurance can become more expensive than it’s worth.

Some cell phone insurance plans let you cancel after a certain period, which can be a great way to avoid overpaying. One mistake to avoid is paying both your manufacturer and your wireless carrier for coverage. Hence, it’s essential to consider the options available and choose the one best suited for your needs.

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