How to Reduce the Cost of a Lost Smartphone

The following post comes from Mark Henricks at partner site Mintlife.

Americans lose 60 million phones a year, according to cell phone insurance provider Asurion. Those lost phones could add up to $30 billion in 2012, according to mobile security company Lookout. Just to give you an idea of how expensive replacing a lost smartphone can be, a basic iPhone can cost more than $800 to replace.

Misplacing your phone can cost you big, and not just in dollars and cents. Losing personal data, like your contacts list, and having someone gain access to your financial data and passwords can also carry huge consequences.

According to Asurion, most smartphone users don’t realize what it costs to replace a lost or stolen device. Those who assume they can get another phone for what they originally paid are in for a big surprise.

That’s because their wireless service provider discounts the price in exchange for a long-term contract. A user already locked into a contract will likely have to pay full retail, often two or three times the initial discounted rate, to get an equivalent phone.

Fortunately, there are a number of ways to reduce or avoid being part of that $30-billion black hole of lost phones.

Replacement insurance

For a monthly fee of about $7, a smartphone user can rest easier knowing that if the worst happens, he or she will only have to pay a deductible that is normally much less than the cost of a new phone. A typical deductible, for example, is around $100.

Wireless customers are usually offered the chance to purchase replacement insurance when they obtain a phone from their carrier. They usually have the option to buy the protection right then, or within 30 days of the purchase.

It’s easy to forget about replacement insurance until a phone is lost, however, so a consumer who is concerned about this issue should be sure to purchase coverage before the option period ends.

At $7 a month, a user will pay $84 over the course of a year for insurance. When you include the cost of the deductible, the costs add up quickly.

Have a backup

You may be able to self-protect against loss or theft with no cost at all by simply hanging onto your old phone when you upgrade to a newer model. If something happens to your new phone, you can usually go back to using the old one.

If your old phone isn’t a smartphone, you may have to continue paying for service features, such as a data plan, that you can’t use or don’t work as well.

But saving your old phone for backup can be a good way to control costs until you are eligible for a price-subsidized phone from your carrier, which usually occurs when your current contract ends or every other year.

Apps

There are also some technological solutions to help you find your smartphone if it is lost or stolen. Lookout, for example, offers an app that tracks a lost or stolen phone to an area as specific as a street address.

The app also lets you dial a lost phone from your computer, as well as prompt a silenced phone to emit a piercing siren sound to help you track it down.

The Lookout app is a free download for both iPhone and Android. You can get additional features with Lookout Premium for $2.99 a month.

Popular places to lose your phone

Asurion says most phones get lost within 12 months of purchase, so watch a recently acquired phone carefully. Did you know you are more likely to lose your phone in some places than others?

According to Lookout, the most common losing locations are coffee shops, followed by bars, offices, and restaurants. So next time you sit down to eat, drink, or work, make keeping an eye on your phone or stashing it away in a pocket or bag a regular habit.