The Real Cost of Cellphone Insurance: Is It Really Worth It?

Replacing a smart phone isn’t cheap, plus it entails a lot of extra paperwork. As such, it’s easy to see how insurance can be appealing. At the same time, though, there are critics who argue that cellphone insurance is little more than a scam to part a fool and his money. “Be careful with your phone” is the battle cry. Why buy cellphone insurance when you can just take better care of it?

That right there is the gist of the debate. Is cellphone insurance necessary? The answer, to be honest, is that it depends. Cellphone insurance can be useful, as long as you know what you’re paying for and whether or not this is something that works for you. As such, it is imperative to know and understand what cellphone insurance actually entails before you can make an informed decision.


  • Cellphone insurance makes replacing expensive phones a lot easier on the pocket. Smart phones can run as high as $600 to replace, so paying insurance for a replacement should an accident happen is much cheaper.
  • Most cellphone owners damage or lose their phones within twelve months of purchase. If you have a history of losing your phone or dropping it, cellphone insurance can protect you from unexpected expenses.
  • Cellphone insurance is not that expensive. Most insurers charge around $7 monthly for coverage. It’s a small price to pay for protection.
  • Cellphone insurance can give you peace of mind. There’s really no price tag on peace of mind, so this one is entirely up to you. Mileage may vary per person.


  • You probably won’t use it. Cellphones—though rather expensive—cannot be comparable to big risk purchases like your car or home.
  • The sales brochures don’t always match the contents of the insurance policy. Some companies will only offer free repairs, not replacement. It’s best to read the policy clearly before making a decision, rather than basing your choice on the simplified contents of the brochure or advertisement.
  • There is no guarantee that you’ll get the same phone, or at least one that costs the same as the one you’re replacing. You might even get a used model. This means if you lose your beloved iPhone, there’s no assurance that you’ll get the same model or a newer one.
  • Most insurers will charge an additional deductible to replace your phone, between $50 to $100. It’s still not as expensive as buying a new phone entirely, but some cellphone users might find this additional charge too much.

The Insurers

Here is a quick look at the different insurers, their costs, and the coverage they provide:

(Click infographic to enlarge)

Cell Phone Insurance Comparison

What to Ask

Different insurers have different insurance policies, so it’s best to clarify a few things before paying or signing up.

  • Ask about external insurer coverage. Most mobile carriers offer cellphone insurance, but they also have third party providers on hand. It’s a good idea to go with the third party insurer because they often offer more coverage and will handle far more issues than regular mobile carriers will. Don’t make a decision hastily, though. Ask for the coverage and cost information for both in-house and external insurer, then compare at home before you decide.
  • Ask about coverage schedule. Some companies will pressure you into getting insurance within thirty days of your purchase. Others will only cover your cellphone for a year or two. Ask ahead of time so you know how much protection you’re paying for. In some cases, you may want to ask about insurance expiration as some insurers will only allow cellphone coverage for a year.
  • Ask about the replacement phone. As mentioned earlier, not all companies will give you a new model or an unused one. It’s important to ask this ahead of time, because you don’t want to be taken by surprise should you actually need to make a replacement claim later on.
  • Ask about the deductible. A lot of people forget that getting a replacement means you have to pay a deductible. Generally, the more expensive your phone, the higher the deductible charged. You need to know this beforehand to decide whether or not getting insurance is worth the cost for you.
  • Ask about coverage. A lot of cellphone insurers only cover loss, theft, and technical problems. They won’t deal with force majeure or other circumstances. This is why you need to get a clear understanding of what sort of coverage they’re offering before making a decision.

Alternatives to Cellphone Insurance

If you’d rather not get cellphone insurance, there is another option. You could try and get a “Personal Articles Insurance Policy” from your current insurance company to see what policy they have available.

This is a lot easier than getting a separate insurance policy for your phone, and often has better replacement options. For example, you won’t have to pay deductibles to get a phone replacement, and will most likely get a check to pay for your new one. If the company does get you a replacement phone, you’ll likely get the same model or at least an unused, similar phone.

Of course, all of this depends on the policy your insurance company offers. It’s always a good idea to ask the same questions above, no matter who your insurer is or what policy you get.

It’s also possible to skip insurance altogether. Unless you’re very careless or you work in an area where damage to your phone is likely, you can skip cellphone insurance and just leave things as they are.

What it all comes down to is your personal preference. Some people put a premium on peace of mind, others would rather have the money in hand. It’s a personal decision that you can only make when you have all the important information you need. Do your research, study the policies available, and make a decision of your own.

What do you think? Is cellphone insurance worthwhile? How has it helped or hurt you? Share with us in the comment section below!


About the Author: Mackenzie Maher

Mackenzie Maher graduated in 2010 from the University of California at Santa Barbara with a BA in Global Studies and a minor in Professional Writing, with an editing emphasis. Mackenzie’s diverse portfolio also includes writing, editing, photography, and documentary script writing on such subjects as travel, career, and finance. Next to writing, she is most passionate about world travel (she has visited 24 countries).

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