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The Best Cell Phone Insurance Plans

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The Best Cell Phone Insurance Plans

We get it, those shiny new smartphones, for some of you, are a must-have! But what about insurance?

Sure, getting insurance is advised, but you may find that the policy offered to you just may not be worth it.

If you're someone who has to have the latest tech you might want to listen up because what you're paying in insurance could make or break your wallet. And it may not even be necessary.

Key Considerations When Choosing Cell Phone Insurance

Chances are you're going to be presented with two types of insurance if you get it through one of the "big four" carriers - carrier insurance (through Sprint, Verizon, AT&T, or T-Mobile) and manufacturers insurance (AppleCare, Samsung Premium Care, Google Preferred Care, ect..). Before choosing which one, if any, you should ask yourself the following questions:

  • What's the annual/monthly fee?
  • Does this fee cover everything or are there still service fees when fixing/replacing the device
  • How long am I covered under this warranty? Am I covered right away?
  • Do I have to sign up today or do I have a grace period?
  • Does it cover damage, loss, and theft?
  • Can I cancel anytime?

Stay tuned for a handy chart!

Replacing Your Phone Can Be Expensive

You can buy cell phone insurance at the time you purchase your new mobile phone. Cell phone carriers provide insurance coverage touting peace of mind for you in that if anything happens to your phone they'll replace it for you. However, what's sometimes lost in the fine print might make your jaw drop.

Chances are your smartphone costs upwards of $800 to begin with. Now imagine it being lost or stolen. That reason alone is enough to send you down a rabbit hole of research on phone insurance. Instead, let us do the work for you.

For starter's let's look at the price of insurance and deductibles from the major cariers:

Monthly PaymentFull PaymentDeductible
AT&T$9$216$99-199
Verizon$9$216$50-99
Sprint$13$312$25-275
T-Mobile$7$168$20-175

Here's the insurance plans from the device manufacturers

Monthly PaymentFull PaymentDeductible
AppleCare+ with Theft & Lossn/a$299$269
Samsung Premium$11.99$143.88$99
Google Preferredn/a$129$79-129

Some of these may seem like good options, especially that of T-mobile. However, pay special attention to the deductible amounts. The deductible is the amount that you will need to pay out-of-pocket. Meaning, if you crack your screen, you pay the lower end, if you lose the phone altogether, you pay the higher end.

That math is not in your favor, especially if you chose to buy your new phone on a contract plan. This value distends further when you consider your replacement phone might not even be new.

You're At Their Mercy for Replacement Phones

Insurance providers are under no obligation to replace the exact phone you had. While some do their best to supply you with the same model, you could end up receiving a refurbished phone too.

That's right, the carrier may choose to send you a certified refurbished phone as a replacement, which, isn't bad but it's certainly in the fine print.

The reason for this is insurance carriers have new and refurbished models to ensure they have adequate inventory for their customers. So, when you file an insurance claim, you are rolling the dice on the model you receive.

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Insurance Companies Drop Problem Customers

If you are someone who damages their phone often, cell phone insurance is a smart buy. At the same time, it's important to understand most cell phone protection plans carry a maximum amount of claims you can file in a specified time two claims in 12 months is the norm. However, Sprint and Samsung Premium Care both allow you three.

With this in mind, if you are prone to damaging your phone, you want to buy a durable case for protection, and if you lose it often, be sure you're aware of any stipulations. AppleCare+ with Theft and Loss requires you to have the Find My iPhone app downloaded on your phone at the time of loss of theft otherwise you may not be covered. Other companies may require a copy of the police report to be submitted with your claim of theft.

If you have filed two claims in a year, the insurance company can deny your third claim and even drop you from the policy.

In many ways, this seems nonsensical because the insurance policy is there to protect the people who require it the most. At the same time, insurance companies want to make money, so the more risk you present to them, the more likely they are to drop you.

The Benefits of Phone Insurance

Now, let's take a look at what you get when you choose cell phone insurance with carriers and manufacturers:

AT&TVerizonSprint TEPT-Mobile
Coverage Time2 years2 years2 years2 years
Covered ImmediatelyYesYesYesYes
Limit # of claims/year2333
Coverage capNoNoNoNo
Local Repair ShopsNoNoNoNo
Tech SupportYesYesYesYes
Loss & Theft ProtectionYesYesYesYes
Cancel AnytimeYesYesYesYes

Looks good right? Generally, if you're prone to lose, this is an ok deal. Since a new smartphone is $800+, paying the monthly/annual fee plus the deductible will still save you hundreds of dollars on a replacement phone.

AppleCare+ with Theft and LossSamsung Premium CareGoogle Preferred Care
Coverage Time2 years1 year2 years
Covered ImmediatelyYesYesNo
Limit # of claims/year232
Coverage capNoNoNo
Local Repair ShopsYesNoNo
Tech SupportYesYesYes
Loss & Theft Protection"Yes" pay $199-269 to replaceNoNo
Cancel AnytimeYesYesYes

However, if you're more prone to an occasional screen crack you might as well save the money since a new screen will probably cost less than the amount you pay annually.

Compare Cell Phone Plans

Time for a cheaper cell phone plan?

Do I Have Alternatives?

One of the best alternatives is to use a credit card to purchase the phone. Many card providers offer extended warranties to cover any malfunctions the device might have.

If you pay your monthly cell bill with your credit card and your device becomes lost or stolen, your card provider might provide financial protection for your loss. Here's the one and only stipulation: you must pay your phone bill with the card.

Common credit card companies that include this type of insurance are Wells Fargo, U.S. Bank, Barclay's Uber, First Citizens, Fifth Third Bank, and Chase. Check your credit card contract to see if you could qualify.

Wells FargoU.S. Bank Visa PlatinumFirst Citizens Rewards
Monthly Paymentn/an/an/a
Full Paymentn/an/an/a
Deductible252550
Coverage Cap$600$600$600
Limit # of claims/year222
Coverage TimeAs long as you're paying through the cardAs long as you're paying through the cardAs long as you're paying through the card
Covered ImmediatelyNo- after the first bill paid on cardNo- after the first bill paid on cardNo- after the first bill paid on card
Local Repair ShopsNoNoNo
Tech SupportNoNoNo
Loss & Theft ProtectionNot LostNot LostNot Lost
Cancel AnytimeYesYesYes

Other Things to Know

Consumers should be aware that multiple credit card companies offer this feature and should search for the one with the best deal overall. Meaning:

  • No annual fee
  • A 0% introductory rate (meaning no interest on any purchase for up to 12 months)
  • A long introductory rate: They range from 12-20 months
  • The right deductible for you
  • A coverage amount that fits their phone. - Fifth Third Bank only coverages up to $200 in supplemental coverage for damage or theft of eligible cell phones while Chase and Wells Fargo cover up to $600

Related: How to Find a Lost Phone

Recap

In reality, there are no perfect solutions. If you have the cash saved for the off chance your new phone gets lost or sustains accidental damage, a cell phone protection plan doesn't make sense. It all depends on the situation.

Also, the type of phone you have plays a role in this. If you have an older model phone it's not worth the money because it will be cheaper to repair/replace it on your own.

If you happen to have a credit card that offers cell phone protection you should definitely start paying your cell phone bill with the card to gain access to their insurance since there is no monthly/annual fee attached. Just keep in mind interest rates could build so be sure to pay it off as soon as it's charged to the card.

Did you find this article useful? Feel free to share it via social media with friends and family to help them save money. Head to our blog for more money saving advice, or like us on Facebook and Pinterest to stay up-to-date.

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