Unless there is a compelling reason to carry insurance for your mobile devices, it is typically not cost effective for most people; its shortcomings outweigh its benefits in most situations. Here are a few reasons why we recommend self-insuring instead.
No Guarantees On Replacement Quality
The replacement phones that are provided are typically refurbished and may not even be the same model as the one they are replacing. They often have limited battery life and most device insurers have no obligation to guarantee you any specific make or model to fulfill their end of the bargain.
Your insurance premium is based on the value of your device – not the device you may receive in a replacement claim. Chances are, simply saving the same amount of money each month could pay for a similarly refurbished device, and give you more options to choose from.
The deductibles that are required for a lost, broken or stolen phone are quite high and may approach the cost of buying a refurbished phone in the open market. These deductibles can range from $150-$250 depending on the version of the device, which is money wasted whether you make a claim or not.
An Ounce Of Prevention…
In most circumstances the likelihood of a phone that is given proper care breaking down is quite small and does not warrant the expense of the insurance. While accidents do happen, mobile devices that are properly cared for usually reach the end of their average lifespan, or at least until most people decide to upgrade. Chances are, you’re never going to make an insurance claim on your mobile device.
…Is Worth A Pound Of Cure
Unfortunately, if you are accident prone, most device insurers won’t put up with you for long. If you do need the insurance and file multiple claims, the insurance company is very likely to drop you. If you’re insistent on insurance, a “maintenance” section in your budget will keep you covered for the same amount as your premium while keeping control of the funds purely in your hands.
Common Problems Don’t Require Replacement
Many problems for personal phones can be resolved at the carrier’s retail stores, the manufacturer’s retail stores, or licensed repair stores. On average, battery, camera, microphone, headphone jack, power button, speaker, charging port and volume button failures can be repaired for under $100. Screen repairs can average anywhere from $150 to $300. It is usually much cheaper to pay for a repair for these common issues than paying an insurance premium over the course of the agreement.
Most people are better off self-insuring; unless there is a compelling reason to have the insurance coverage you are likely to save money by foregoing the carrier insurance offering. In fact, phone vendors aren’t shy in admitting that device insurance is one of their most profitable services.