Phone Insurance: Worth It or Waste of Money?
Is phone insurance worth it? Here’s what you need to know so you can decide whether to buy phone insurance.
Evaluate your risk
How likely are you to break your phone? It depends on who you ask. A Batteries Bulbs Plus survey found that 33% of people had broken their phones over the previous year, a SquareTrade survey put the number at 66% per year and a Consumer Reports survey arrived at 50% over two years.
No matter which source you believe, only you can judge how likely it is you’ll need to file a phone insurance claim.
If you use a heavy-duty case and only transport your phone between your home and an office job, you’re less likely to break or lose your phone than if you routinely snap selfies while water skiing. If you work in a high crime area, there’s an elevated chance your phone could be stolen. Do your kids have phones? How careful are they with their devices?
What about manufacturing defects? Warranties typically last a year, but after that you’re on your own unless you have insurance. For perspective, the iPhone X reportedly had a 3% failure rate.
Though you can’t predict the future, you can evaluate your risk level based on your lifestyle, career and other factors to help decide whether phone insurance is worth the cost.
Compare phone insurance coverage & cost
There three primary sources for phone insurance: manufacturer insurance like AppleCare+ and Samsung Premium Care, carrier insurance offered by Verizon, AT&T, T-Mobile and Sprint, and independent insurance offered by companies like SquareTrade, Best Buy/Geek Squad and Worth Ave. Group.
No matter which you’re considering, it’s best to compare coverages and costs before you decide.
Phone insurance coverage
Here’s what you need to know before you buy phone insurance.
The premium is how much you’ll pay for your policy, either upfront or per month. Some plans offer discounts for upfront payment. For example, AppleCare+ with Loss and Theft costs $299 if you pay upfront. Compare that to the $14.99 monthly fee, which comes to $359.75 over two years – about $60 more.
Understand exactly what is covered and what isn’t. Some plans only cover manufacturer’s defects. Some cover damages but not loss or theft. More comprehensive plans cover defects, damages, loss and theft.
Make sure any plan you’re considering offers coverage for your risk factors. If you take your phone boating, you probably want to be covered for water damage, for example.
This is the out-of-pocket price you’ll pay if you file a claim. Many plans have varying deductibles. For example, AppleCare+ with Loss and Theft charges $29 to repair a damaged iPhone XS screen. Other repairs cost $99, while the theft or loss deductible is $269.
Some plans have declining deductibles. For example, AT&T Mobile Insurance has a standard deductible of $299 for “Tier E” phones, which includes the iPhone XS. The deductible drops to $224 after 6 months and to $149 after 12 months without a claim.
Plans limit the number of claims that can be filed per year and the total value of claims.
Some insurance plans are in effect for as long as you continue to pay the premium; others are only in effect for a given time. Make sure you know how long your phone is covered.
Don’t assume the most expensive plan has the best coverage. For an iPhone XS, the only difference between Verizon’s Total Mobile Protection ($13/month) and Total Equipment Coverage ($9/month) is access to a Verizon Tech Coach – a $96 expense over 2 years that many people do not need.
Another example: T-Mobile’s Protection 360 includes AppleCare benefits for iPhones. Damages are covered by Apple, and T-Mobile adds benefits like unlimited screen protector replacement and McAfee Security – two things you might not want or need, especially since AppleCare would be cheaper to purchase alone (provided you pay upfront).
The fine print
Ready the policy’s terms and conditions. Some plans revoke coverage if you attempt to repair your own phone. Some plans that cover water damage do not cover other liquid damage – so you might not be covered if your phone takes a dip in your cereal bowl.
Be sure to check for any stipulations: AppleCare+ with Loss and Theft coverage only applies if you have Find My iPhone enabled at the time your phone is lost or stolen, for example.
Phone insurance cost
How much does phone insurance really cost? Let’s look at how much you’d pay on popular plans for an iPhone XS if you don’t file a claim, if you have one claim and if you have two claims over a 24-month period.
|PLAN||PREMIUM (over 24 months, also no-claim price)||COST PER CLAIM||TOTAL COST 1 CLAIM||TOTAL COST 2 CLAIMS|
|AppleCare+ with Theft & Loss||$299 (if paid upfront)||Screen damage: $29|
Other damage: $99
Theft or loss: $269
Other damage: $398
Theft or loss: $568
Other damage: $497
Theft or loss: $837
|Samsung Premium Care||$287.76 ($11.99/month)||$99 (does not cover theft or loss)||$386.76||$990|
|Verizon Total Mobile Protection||$312 ($13/month)||Screen repair: $29|
Other damage, theft or loss: $199
|Screen repair: $341|
Other damage, loss or theft: $511
|Screen damage: 370|
Other damage, theft or loss: $710
|AT&T Mobile Protection Pack||$287.76 ($11.99/month)||Screen damage: $49|
Other damage, theft or loss: $299
|Screen damage: $336.76|
Other damage, theft or loss: $586.76
|Screen damage: $385.76|
Other damage, theft or loss: $885.76
|Sprint Complete||$456 ($19/month)||Screen damage: $29|
Other damage: $140
Theft or loss: $275
|Screen damage: $485|
Other damage: $596
Theft or loss: $731
|Screen damage: $514|
Other damage: $736
Theft or loss: $1,006
|T-Mobile Protection 360||$360 ($15/month)||$249 (though AppleCare+ pricing applies to iPhones)||$609||$858|
|SquareTrade||$215.76 ($8.99/month)||$149 (does not cover theft or loss)||$364.76||$513.76|
|Worth Ave. Group||$189||$50||$239||$289|
Phone insurance VS repair & replacement costs
If you do not have phone insurance, Apple charges $29 to repair a cracked iPhone XS screen. Other repairs cost $599, and a new XS costs $999. If you have AppleCare+ and make one cracked screen claim over 2 years, your total cost would be $328. That amounts to $49 more than if you simply paid for the repair.
Local repair services might cost less. For example, iCracked charges around $200 to fix a broken iPhone XS screen and Utah-based Bad Apple charges $59 to $90 to repair charging ports, batteries and rear cameras – significantly less than the $599 Apple charges. You can also fix your own phone.
These repair prices are less than you’d pay if you made a single claim on even the cheapest phone insurance plan we found (Worth Ave. Group). In fact, you’d likely save money if you skipped insurance and paid for two local repairs out-of-pocket over 24 months, except in the case of Worth Ave. Group’s insurance.
Loss or theft is a different story. At the time of this writing, you could buy a used 64 GB iPhone XS Max in good condition on Swappa for around $800. That’s more than the total price you’d pay if you needed to get a phone replaced by your insurer.
Phone insurance alternatives
You might be able to get phone insurance through alternative sources like homeowner’s insurance or your credit card company. Some homeowner’s policies cover broken, lost or stolen devices (or such coverage can be added as a rider), and some credit cards offer extended warranties if you buy your phone using their cards. Check with your providers to compare coverages and costs to see if these are options.
Another option: pay the premium to yourself each month, envelope system style, so you have cash on hand if you need to repair or replace your phone.
It’s worth noting that if you don’t have insurance and need to replace your phone, you can sell it. For example, at the time of this writing you could sell a broken 64 GB iPhone XS Max for $275 and use the funds toward a new phone.
Should you buy phone insurance?
Evaluate your risk versus the cost. If you aren’t likely to file more than 2 claims in 24 months – and it’s unlikely your phone will be lost or stolen – phone insurance might cost more than it’s worth. On the other hand, if your job or lifestyle puts your phone at risk or you’re accident prone, phone insurance might be a good buy.
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