Mobile Phone Insurance: Is your cell phone worth protecting?

Verizon, AT&T, and Sprint all provide cell phone insurance through a company called Asurion.

For the first few weeks you own your cell phone, you are able to enroll in an Asurion plan for $5 per month (note: the exact amount of time depends on the provider you use).

The $5 per month plan has a deductible between $50 and $100 that will need to be paid first before you are given a new cell phone.

You will be covered against loss, theft, and damage (including water damage).

Should you need to use the insurance, you submit a claim directly to Asurion and they will make a claim decision.  If they decide to honor the claim, you are generally issued a refurbished model of the phone that you had.

In some special cases, yes.

Most of the time it isn't worth it.  Consider an example.  Say you signed up for a new cell phone and got insurance on it.  If that mobile phone is stolen in 10 months, you've already spent $50 on insurance and now you'll have to pay another $50 to $100 on the deductible for a refurbished model.  For $100 to $150, you can generally find a similar phone through a reputable seller on eBay.

For most people, I suggest they "self-insure."  That means putting $5 of your own away every month in the event that you lose your phone.  If you manage to make it through your first two year contract without ever needing that money, you've just created a $120 insurance fund to tap into in the future.

So what are those special cases where mobile phone insurance is worth it?  If you have a top of the line phone that would cost more than $150 to replace, you should probably carry insurance for the first year.  Also, if you have a history of dropping your cell phone in the toilet (or leaving it at the coffee shop, dropping it down stairs, etc) and you're worried this could happen very early in your contract term, consider insurance.

Yes, but it's going to cost a lot more than the rates we've discussed.  Asurion offers iPhone insurance coverage for $12 a month and has deductibles that range from $149 to $199.

Again, with rates like this, you'd generally be better off saving that $12 a month in a safe place and using it in the event of an accident.  Mobile phone insurance for the iPhone only makes sense if you know that phone is going to be put in harms way very often.

Several third-party companies offer cell phone insurance as a standalone product.  These companies include: gocare, squaretrade, Safeware, and ensquared.

These companies all have decent consumer track records.  As with any insurance or insurance-like company, there are many stories of difficult claims processes on the internet.  Also, it seems like it's not uncommon to get dropped from your insurance provider immediately after they pay out on your first claim.

Do you have questions about mobile phone insurance?  Feel free to ask any cell phone related questions in the comment section below.  Thanks!