Should you purchase insurance for your smart phone?

Over the years, when people ask me about purchasing insurance for various products, my answer is normally no. These days many stores offer insurance on pretty much everything, it is a major win for the store and its 3rd party insurance company, and a stupid financial move for the buyer…in most cases.

Smart phones should be insured

Smart phones are one of the few times I recommend people buy insurance (laptops, depending on the circumstances are the other.) We carry the phones in our pockets, we drop them (often in water,) they are expensive to repair and we are stuck in costly contracts regardless of whether we have the phone. I have managed to drop no less than two phones in water in the past 4 years. I had to replace a third phone, out of warranty, because the screen died, and I just needed to trade in a brand new phone for a dead speaker. I didn’t have insurance for my first two phones (one of which was water damaged,) and I have since seen the light.

No, the insurance isn’t cheap but it is a lot cheaper than having to replace a phone at the full, non-contract price

You might wonder about the brand new phone, yes that was covered under warranty, but because I have the insurance I was eligible to walk into a store and exchange it instead of having to call the company and wait for a new one.  That is part of the insurance service and another benefit. It means while I have insurance, as long as the item is covered (warranty or insurance) I won’t have to be without a phone for very long.

Check the insurance and run the numbers

Now, before you follow my advice please make sure you check the insurance and what it offers.  See what is covered (does it cover water damage or a broken screen for example) and how much is the deductible. Also, how many times can you replace your phone? Often it can only be switched once or twice.

Finally consider how long you should keep the insurance. Some providers offer upgrades every year if you extend your contract. As a result, it sometimes makes financial sense to drop the insurance during the second year and take advantage of an upgrade if something happens.

Your mileage may vary.

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