If you’re like us, there are few things more sobering than the sight of your phone facedown in a parking lot. Is the screen broken? Dented?
Over the past decade-plus, smartphones have become an integral part of everybody’s lives—once luxuries, they now feel like necessities. They keep us connected to friends and loved ones, allow us to make new connections, browse the internet, listen to music, and balance our budget. Yes, there’s a significant chance that your phone touches almost every part of your life.
But what happens when it is lost, stolen, or damaged? On top of the already astronomical prices for some, buying a new device or repairing your current one can be a costly endeavour. But it’s not like you can go without one to forego the expense.
Enter insurance companies.
Yes, it’s possible to protect your phone when you need a repair or replacement. Join the sages behind MoneyWizard as we check out the options available to you to protect the most sensitive of your devices!
How Does Phone Insurance Work?
To insure your phone, you can select a policy through via monthly subscriptions or upfront payments when you buy your device or shortly thereafter. In the event your smartphone is damaged, lost, or stolen, the insurance company will provide compensation after paying your deductible.
Claims and Deductibles
In insurance terms, a deductible is the amount that you’re responsible for paying in the event of a claim. If the loss is covered by your policy, your insurance will then kick in to cover the rest. This generally costs between $30 and $225. Of course, how much you pay out of hand depends on your smartphone’s age, brand, and plan you select. Read the fine print in your plan to avoid ending up shocked by your deductible!
Limited Number of Claims
Most insurance companies limit the number of claims you can file to two or three a year. And your insurer might send you a refurbished phone rather than a new model if a replacement phone is what you need. The bulk of providers only allow you to make a limited number of claims.
What Does Phone Insurance Cover?
Here’s a list of what cellphone insurance providers will actually cover:
Manufacturing Defects
Manufacturing defects are claims related to problems that occurred while the product was being created or assembled. Manufacturer’s warranties generally cover defects; however, they are unusually time-bound. Insurance policies often extend manufacturing defect coverage past the original period.
Battery Replacement:
As a phone’s battery is charged and discharged, it slowly loses its ability to hold a charge. Many warranties will replace a battery upon request if it’s no longer holding a charge . While your insurance kicks in for this, most warranties will replace an ailing battery if you ask.
Accidental Damage Protection:
With today’s highly mobile users, the unexpected is bound to happen, even to exceptionally engineered smartphones. Studies show that a significant percentage of users will experience non-warranted damage within the first three years of purchasing their phone. Accidental Damage Protection offers significant savings relative to uncovered repairs.
Water Damage Protection:
Water damage can really put a damper on things. It’s the leading cause of claims in Canada. Many plans don’t cover water damage, and even if they do, it’s a somewhat complicated
process. Still, see if your plan offers full coverage when your phone gets wet and wild. This way, you’re not stuck with a hefty bill after putting your phone in the wash or dropping it into a pool.
Are There Alternatives to Smartphone Insurance?
Some experts suggest not purchasing phone insurance because it’s seen as a needless expense. Let’s investigate other ways you can keep yourself covered in the case of a smartphone-based mishap without a policy:
Credit Cards That Extend Warranties
You’ll receive cell phone protection from some credit cards when you purchase your device or pay for the plan with your card. Discuss this option with your credit card provider. One example is American Express. Many retail items that are purchased anywhere in the world with certain types of Amex cards are automatically insured for 90 days from the date of purchase against accidental physical damage and most theft.
Check Your Homeowners Policy.
Your homeowner’s policy likely does cover your smart phone for damages, such as fire and theft but not for losing or misplacing your phone. Even if you had a covered loss, your loss will be subject to the deductible of your insurance (usually $500–$3000). Ask your provider and see if this is an option. Of course, perform due diligence on claim limits and deductibles.
Pay Yourself the Monthly Insurance Cost
This is probably one of your best options because you’ll keep your money. Merely set aside a monthly dollar amount comparable to what you’d pay for insurance. The funds will be available if you need it—but you’ll also have the extra cash for other purposes if you don’t run into any smartphone mishaps.
Use Local Repair Shops.
Local repair shops offer the best rates for repairing your phone. In fact, it often costs less to fix your phone at these places instead of purchasing a replacement. One thing to consider is ensuring the repair shop is licensed by the manufacturer to perform the repair. Otherwise, bringing the smartphone to them might void your warranty. With that said, a warranty means next to nothing if the phone isn’t working. At the end of the day, most repairs will run you a couple hundred dollars, which might be far less than what you pay in total for insurance.
Get A Case
Instead of financially protecting your phone, why not physically cover it with a case? There’s an array of these products on the market at affordable prices, and they do wonders in preventing the damage done by dropping your device. Some might even say that purchasing a phone case is more valuable than any insurance policy could ever be.
Conclusion and Recommendation
Should you get insurance for your phone? Unfortunately, we can’t give you a definitive answer, as it all depends on your use case! Sadly, self-repair isn’t really an option anymore, given the many intricacies and complexities of technology. Saving your own money might be the better long-term option, but it’s a challenging feat.In short, you should consider your own usage habits and how rough you are with your electronics. Beyond that, if you’re going with a plan—always read the fine print. That could be the difference between a plan that offers genuine value or one that leaves you out in the cold—and phoneless!
