Do You Know How to Insure Your Smartphone?

Photo by liza54500 / Shutterstock.com

My smartphone was stolen recently. What I learned was that mine was a classic story, according to this report on phone theft (by IDG Research for data security company Lookout):

  • It happened in a crowded cafe:16 percent of phone thefts — the biggest percentage — happen in restaurants.
  • I’d turned my back on the phone: Most — 44 percent — are stolen when owners left them behind in a public setting.
  • The thief struck during the lunch hour: The majority of thefts — 40 percent — take place from noon to 5 p.m.
  • I lost more than money: Dealing with the loss, buying a new phone and importing backed up data ate up half of a workday — 47 percent of victims told the pollsters that their phone theft cost them in lost time or productivity.

So as it happens, I’m in good company: 10 percent of phone owners in the United States, U.K., France and Germany have had a mobile phone stolen, the report says. In my case, making it all worse, I was uninsured.

Insure? Or not? How to decide

Was it a bad idea to go without insurance in a world where phone theft is common? At first it seemed so. I got right on the phone to my insurance broker and spent $41 a year to have my new phone added as a “scheduled” item to my home insurance policy. That works out to $3.41 a month, plenty cheaper than the $11 it costs, for example, to insure a 64-gigabyte smartphone with Verizon’s top-tier “Total Protection” plan, or even the $7 that ATT charges for insuring a smart phone.

But it’s not fair to compare my homeowner’s coverage to dedicated phone coverage. Phone company insurance plans and other third-party plans — depending on which you select — usually protect you against more than just theft. Typically, these plans also cover repairs or replace a phone in case of a malfunction or accident or even water damage.

Taking a risk

Should I have gone with a fuller coverage plan from my phone carrier? Looking into it, I learned that there’s no one-size-fits-all answer when it comes to mobile phone protection plans. Not only do the plans vary widely, so do people’s circumstances.

For me, I decided that my new home insurance coverage was best. But that’s me. My thinking went like this: Full-protection coverage offered through phone companies, phone manufacturers and third-party insurers tend to have high deductibles for smartphones. I’d have to pay a $199 out of pocket to replace my new phone if it were lost or stolen. Some plans charge plenty more, as CNET explains, below.

My home insurance coverage for the phone, though, has a zero deductible. No cost to make a claim. It would take nearly five years, at $41 a month, to equal the cost of my $199 deductible. And that doesn’t include the monthly premiums for the full-protection plan.

But what about coverage for malfunctions and accidents? Since my new phone came with a one-year warranty, I’m covered, for now at least. I had a 60-day window in which to purchase an extended warranty, but I let it go. Add-on service plans seldom are worthwhile, Money Talks News founder Stacy Johnson has found, and so I’m taking my chances.

Should you buy smartphone insurance?

Whether phone insurance — of any type — is a good deal or not is a very personal call.

CNET lists drawbacks of phone insurance plans, including high deductibles:

Month-to-month phone insurance comes with low premiums, high deductibles and a limit on claims (Asurion (a popular provider) lets you make two claims per year, with a cap of $1,500 per claim). If you make one claim per year, you’ll pay between $270 and $330 for a new phone — and the phone may not even be new. The insurance company has the right to choose whether they want to repair your phone or replace it with a phone of equal value, which means you’re likely to get a refurbished phone instead of a brand new one. If your phone is more than a year old, phone insurance makes no sense because older high-end smartphones are subject to the same deductibles as newer high-end smartphones.

The value of any particular plan depends on:

  • Replacement cost: If you own one of the high-end smartphones you may be looking at $800 or more to replace it, making a full-protection plan more attractive, even with a deductible of $199 or more.
  • The age of your phone: The older your phone the less valuable it is and the less a protection plan makes sense.
  • The plan: The value of any plan depends on its price and features.
  • Where you live: If you live in an area where phone theft is a big problem, the case for coverage grows stronger.
  • You: Are someone who has a track record of dropping or breaking things? If so, coverage may be a good idea, at least for the first year or two, when replacing it is most expensive.

There’s no simple answer to the quandary over whether to buy smartphone protection. But knowing how to think about the decision makes sense.

What’s your approach to protecting your phone and the information it holds? Share with us in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Reasons You Should Not Delay Retirement
5 Reasons You Should Not Delay Retirement

Could you be waiting too long to quit working?

Avoiding These 5 Foods Could Save Your Vision as You Age
Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

8 Award-Winning Products That Impressed 40,000 Shoppers
8 Award-Winning Products That Impressed 40,000 Shoppers

The Product of the Year awards help shoppers find the best pet products, personal care items and everything in between.

7 Gadgets Under $60 That Can Boost Your Health
7 Gadgets Under $60 That Can Boost Your Health

These Amazon finds can help ease foot aches, boost energy and even protect your heart.

7 Mistakes Guaranteed to Ruin Your Retirement
7 Mistakes Guaranteed to Ruin Your Retirement

Make even one of these money mistakes, and you’ll probably end up eating ramen noodles in your golden years.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
10 Things Frugal People Never Buy
10 Things Frugal People Never Buy

If you’re a true tightwad, the mere thought of spending money on these items gives you the willies.

10 Useless Purchases You Need to Stop Making
10 Useless Purchases You Need to Stop Making

You might as well flush your money down the loo if you spend it on these things.

7 Social Security Benefits You May Be Overlooking
7 Social Security Benefits You May Be Overlooking

There’s more to Social Security than retirement benefits.

7 Social Security Rules Everyone Should Know by Now
7 Social Security Rules Everyone Should Know by Now

Confusion over Social Security is a shame, considering how many of us will need this money badly.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

They don’t make coffee makers like this anymore.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things You Should Stop Buying in 2021
14 Things You Should Stop Buying in 2021

These convenient household products come with hidden costs that you might not have considered.

The 6 Best Investing Apps for Beginners
The 6 Best Investing Apps for Beginners

If you’re looking to ease into investing in the coronavirus economy with just a little money, check out these easy-to-use tools.

Is Writing a Check Still Safe?
Is Writing a Check Still Safe?

Every time you pay by check, you hand your bank account numbers to a stranger.

8 Things You Should Replace to Improve Your Life Today
8 Things You Should Replace to Improve Your Life Today

Being frugal isn’t smart if you put off replacing these items.

6 Ways to Protect Your Retirement Accounts From Hackers
6 Ways to Protect Your Retirement Accounts From Hackers

Imagine having $245,000 stolen from your retirement account — and not being reimbursed.

9 Mistakes People Make When Cleaning With Vinegar
9 Mistakes People Make When Cleaning With Vinegar

Cleaning with vinegar can save you a lot of money, but using it like this can cost you.

13 Amazon Purchases We Are Loving Right Now
13 Amazon Purchases We Are Loving Right Now

These practical products make everyday life a little easier.

7 Income Tax Breaks That Retirees Often Overlook
7 Income Tax Breaks That Retirees Often Overlook

Did you realize all these tax credits and deductions exist — or that they apply to retirees?

7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

4 States Where Taxes on Social Security May Fall Soon
4 States Where Taxes on Social Security May Fall Soon

These states are considering reducing — or even eliminating — income taxes on Social Security benefits.

10 Things Successful Retirees Do Differently
10 Things Successful Retirees Do Differently

These habits and characteristics can help put you on the track to success.

7 Hidden Sections of Amazon Every Shopper Should Know
7 Hidden Sections of Amazon Every Shopper Should Know

These little-known departments of Amazon are gold mines for deal-seekers and impulse shoppers alike.

7 Costly Health Problems That Strike After Age 50
7 Costly Health Problems That Strike After Age 50

As we age, our bodies wear down. Here is how to cut costs associated with some common ailments.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.