Is Phone Insurance Worth It?

Phone insurance — also known as a phone protection plan — is optional coverage that protects your device from damage or theft.^[1] You can purchase phone protection through your wireless service provider, separately from an insurance company, or even get it as a complimentary credit card benefit.

Cellphones can be a significant investment, with some models costing upward of $1,200. For many people, phone insurance can be worth it to avoid the potential cost of replacing a device. But other people may be willing to take on the risk to minimize their monthly costs. Here’s how to decide if it’s right for you and how to purchase coverage.

When phone insurance is worth it

Cellphone insurance can help pay to repair or replace your phone if it’s damaged or stolen. Purchasing the coverage may be worth it if you’re at a higher risk of those situations.

More specifically, you may consider purchasing phone insurance for these reasons:

• You tend to drop your phone. A high-quality phone case can help minimize the damage caused by dropping your phone. But if you drop your phone often enough, you may have a higher risk of needing to repair or replace your phone, even if you have a good case.

• You have a child who uses the phone. Children are less likely than their parents to handle a phone carefully, resulting in a greater risk of the device being dropped or damaged. Even if your kids are teenagers, purchasing phone protection may be worth it.

• You rely on your phone for work. If you use your phone for business purposes, you may need to have it repaired or replaced as quickly as possible. Having cellphone protection can minimize the financial challenges of making that happen. Some insurers may even offer options for same-day repair.

• You can’t afford a replacement. If you don’t have enough money saved to replace your phone if it’s damaged or stolen, a small monthly premium may be worthwhile until you’ve established a robust emergency fund.

When is phone insurance not worth it?

Although phone insurance may be worth it for many people, it’s not always the right fit. Consider these situations where phone protection may not be worth the cost:

• You have an older phone. A phone protection plan can replace your current model with the same or similar model, but it won’t upgrade you to a new one. So if you have an older model, the cost of monthly premiums may outweigh your phone’s value.

• You aren’t prone to dropping your phone. If you’ve gone several years without dropping or damaging your phone, your potential risk may be low. The same is true if you don’t have children or don’t let them use your device.

• You can afford a replacement. If your phone is relatively inexpensive, or you have enough savings to replace a pricier model, you may be willing to risk potential damage or theft. 

• You have sufficient coverage. You may already have coverage for your cellphone through your credit card company or home or renters insurance. While this coverage has limitations, it may be enough for your needs.

Phone insurance pros and cons

Before you purchase cellphone insurance, it’s important to weigh the advantages and disadvantages of the coverage. Here’s what to keep in mind:

Where to buy phone insurance

You can buy cellphone insurance in several different ways. Here’s a quick summary of your options:

• Mobile service providers: This option lets you add coverage and include the cost with your cellphone plan each month.

• Phone manufacturers: Some phone manufacturers, including Apple, Samsung, and Google, may offer their own phone insurance plans.

• Third-party providers: Traditional insurance companies may offer phone insurance plans in addition to coverage you may get through your home or renters insurance policy.

• Credit card companies: Some credit card companies offer limited protection as a complimentary card benefit if you use their card to pay your phone bill.

What does phone insurance cover?

Your phone insurance coverage may depend on the type of policy you have. In general, though, you can expect coverage for the following situations:

• 

  Accidental damage

  This may include drops, water damage, cracked phone screens, and other unintentional damage.

• 

  Theft

  If someone steals your device, it’s likely covered.

• 

  Loss

  Many phone plans also cover accidental phone loss. Note, though, that coverage through your credit card typically excludes loss.

• 

  Mechanical failure

  Some insurers may cover repairs if your phone has a defect or stops working after the warranty expires.

Is a lost phone covered?

Whether a lost phone is covered ultimately depends on your coverage. If you buy a plan through your mobile service provider or the phone manufacturer, for instance, it typically includes lost phone coverage. That said, Google notably doesn’t offer this coverage for its devices.

Coverage can also be hit or miss with third-party insurance companies, as some offer lost phone coverage while others don’t.

If your only cellphone protection is through your credit card, you likely don’t have coverage for lost phones.

What isn’t covered by phone insurance?

As with what’s covered, what isn’t covered depends on your phone insurance plan and the provider. With that said, coverage typically won’t apply for the following:

• Wear and tear: Phones may naturally experience wear and tear over time, which isn’t generally covered by phone insurance.

• Intentional damage: Intentionally damaging your phone isn’t covered, and filing a claim could be considered insurance fraud.

• Unauthorized repairs: Trying to repair your phone yourself or through a repair shop not authorized by your plan may void your coverage.

• Defects on newer models: If you have a new phone that’s still under warranty, your insurance plan won’t cover any defects or mechanical failures.

• Modifications: Modifying or altering your phone can void your insurance coverage.

Is phone insurance worth it FAQs