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I just bought a smartphone. Family plan with wife and parents. The salesmen were trying to push an insurance plan, but with just a quick look down the exclusions it's pretty restrictive. At $8 per phone per month just for myself and my wife that would be costing me more than my renters insurance and I end up paying half the price of a replacement over the course of a 2 year contract. Makes my think there has to be a better way to insure my phones.

Are there alternatives to using the carriers insurance plan for my phone?

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Would your home insurance cover cases like theft or breakage? –  DJClayworth Oct 27 '11 at 20:15
    
Not sure. I have renters like I mentioned, but thought that would only cover damage in the house. –  Andrew Redd Oct 27 '11 at 20:33

6 Answers 6

up vote 35 down vote accepted

Self-insurance. Pay yourself a premium, and if something happens - buy a new phone. I've been doing it since I started using mobile phones. Made a fortune off that self sucker paying the premiums and never needing the insurance.

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6  
I love it when people do simple things like this. +1 –  gef05 Oct 27 '11 at 23:48
    
And while you're at it, T-Mobile will actually cut you a deal on service plans if you bring your own phone. It'll be sad when there's only one GSM carrier in the US. –  jldugger Oct 28 '11 at 19:41
    
This certainly looks like the most popular option. Do you just include it as part of your emergency fund and boost it up, just pocket the money and deal with it as it comes, or setup a separate account for that? –  Andrew Redd Oct 28 '11 at 20:04
    
@AndrewRedd - I was a bit sarcastic. I have a "general" emergency fund that I keep in a liquid savings account, and if needed - it will be used, I don't really set up accounts per device to be "self-insured", I have too many of them (all my laptops, netbooks, ipads, ipods, phones, and what not, you can't insure them all). –  littleadv Oct 28 '11 at 20:59
    
@littleadv This seems to be off topic –  Jacob Valenta Oct 12 '13 at 19:13

Some credit cards offer insurance on cell phones, if you pay your monthly bill with the credit card.

One credit card I'm aware of that does this is the Citi Forward card (which provides $250 in insurance after a $50 deductible), and the card has no annual fee. I'm sure others offer similar services.

From: https://creditcards.citi.com/credit-cards/citi-forward/

Cellular Telephone Protection

If you pay your monthly cell phone bills with your Citi® credit card and your cell phone is damaged or stolen, you have supplemental insurance coverage that reimburses you for a replacement phone.

And the fine print

Visa Cellular Telephone Protection is supplemental reimbursement and is underwritten by Indemnity Insurance Company of North America. Certain conditions, restrictions and exclusions apply. Coverage is subject to a maximum reimbursement amount of $250 in excess of the $50 co-payment you are required to pay. Details of coverage will be provided upon cardmembership.

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I was going to mention this :-) –  f1StudentInUS Oct 28 '11 at 17:43
    
+1, I wouldn't apply for a credit card just for that, but it's an awesome perk. –  littleadv Oct 28 '11 at 21:05
    
Citi forward is a pretty solid card in other respects. 5 points/$ at amazon.com and restaurants. –  Dan Carroll Oct 30 '11 at 0:58

Just self-insure it. If I'd have been paying $8/month for insurance, I'd already have paid $240 in the 30 months I've had my iPhone. That's a lot more than I've paid for repair.

I broke my iPhone screen. Cost me a hundred bucks for a new screen (actually, just the glass over the front of the screen), including labor, from a little kiosk in the mall. So you don't necessarily need a full replacement if you break it, and a hundred bucks is a lot better than the four hundred a new phone would have cost.

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Self insure is a good option, but if you can't replace a $500 phone that you received at a subsidized price on contract, consider a different warranty outfit.

I hear good review of www.squaretrade.com. They will warranty most electronics for a one time fee that typically is cheaper than what our cell phone carrier is pushing. They also pepper my inbox with frequent 30% off deals.

UPDATE: Since I last wrote, I have let my squaretrade contract expire and I now have a rider on my rentes owners insurance.

  • Covers ANY electronics in my home (phone, TV, laptop, tablets)
  • Costs about $25/year, or $2/month
  • Does not count as a claim against my regular renter's policy
  • I forget the deductible, but there is one. Less than $100

I don't know how many times they will let me use it before my clumsiness gets it dropped from my policy, but I think I like the ease of the insurance rider better than another company to deal with.

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My wife and I have the same phone, and I bought a single warranty from SquareTrade. All I had to tell them was I had an android phone and they quoted me a price. So both our phones are covered, whichever one breaks will be replaced. With a toddler in the house, I like the coverage. –  MrChrister Oct 28 '11 at 16:52
    
Looks like the square trade is $124 for 24 months of coverage or about $5 a month, still has the $99 deductible, also does not cover theft or loss. –  Andrew Redd Oct 28 '11 at 20:01
    
Wow. My deal is much better than that. It is sad warranty companies charge more based on popularity, not failure rate. –  MrChrister Oct 28 '11 at 20:49
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warranty and insurance are entirely different things. I have warranty coverage for all my devices for the contract period, for free. It doesn't help when you drop it into a toilet, though. Paying for warranty is usually unnecessary for electronics, because there's nothing much to break, unless misused (which voids the warranty anyway). –  littleadv Oct 28 '11 at 21:02

If you regularly lose, break or otherwise destroy phones, get a cheap one. Otherwise, follow littleadv's advice!

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Insurance on consumer electronics is usually a very high profit thing for the company. That's why they pressure you into it and pressure salespeople into offering it. That means it isn't likely you will reap benefit.

Every time you are offered insurance it is better to set aside that amount on a monthly basis towards a self-insurance fund. You can do this in Quicken or have an actual account with automatic transfers.

Of course... If you have an error-prone teenager, buy the insurance!

P.S. At a local electronics store I knew the salespeople were allowed to make up any price for the "extended warrantee" and could keep half as commission. The better dressed you were the higher the price they would invent. Turn down the multi-year warrantee? You'd instantly be offered a less expensive, shorter-term one.

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