Everything You Need to Know About Cell Phone Insurance
Due to the rapid growth in sophistication of smartphone technology, cell phones have become expensive investments. However, new smart phones are thin, nearly weightless, and are easily lost, damaged, or stolen. As a result, you may be interested in getting insurance or a warranty on your smartphone.
Major providers and sellers often offer cell phone warranties to protect consumers from possible defects, and offer the option of more expansive warranties at a cost. All of the major carriers also offer cell phone insurance, available either as integrated with monthly payments or bought outright at any time. So, before purchasing your smartphone, check out these options to protect your device.
Cell phone insurance essentially covers everything a warranty does not. In the same fashion as car or home insurance, cell phone insurance is meant to protect consumers from having to buy a new phone outright in the event that an accident, theft, or other incidents damage a phone or makes it unable to function the way it's supposed to. People with insured phones can rest easy knowing that they aren't one mishap away from having to spend a large amount of money.
What is Covered
Accidental: Includes any damages from drops or submersion in liquids
Expired Warranties: Covers failures that would be covered by the previous warranty
Loss and Theft: Insures people from carelessness or maliciousness
In most cases, the decision to buy cell phone insurance has to be made within thirty days of the phone's purchase if through a carrier. Otherwise, third party policies are available anytime. The insurance policies offered by the major carriers are fundamentally identical, in part because they are all handled by the same company, Asurion.
Policies through Verizon, AT&T, Sprint, and T-Mobile have different names and subtle nuances, but they all cost between seven and nine dollars a month, come with a deductible up to two hundred dollars depending on the device, and cover loss, damage, and mechanical failures. They each have a maximum number of claims that can be made, generally two or three replacement phones a year, with a $1500 device value limit per claim.
Verizon's Total Equipment Coverage is $9/month for phones, $7 for basic phones and tablets. Comprehensive coverage for loss, theft, and damage, and substitutes for expired warranties.
AT&T's Mobile Insurance is $6.99/month and covers loss, theft, and accidental damage along with warranty replacement. Liquid damage isn't included.
Sprint's Total Equipment Protection costs $9 to $11 monthly, covers loss, theft, and all damage, but not warranty related problems.
T-Mobile's Premium Handset Protection is $8/month and covers loss, theft, accidental damage and mechanical failures. The maximum deductible is slightly lower at $175, and coverage must be purchased within two weeks of purchase.
Third party cell phone insurance companies offer relatively similar policies that cover the same things. However, third party policies can be opened at any time, provided that the phone is in optimal condition when it is opened. Some policies have the additional option of choosing a cash reimbursements for a claim instead of replacing or repairing a phone. Third party insurance policies will also cover incidents that some carriers won't. Liquid damage is a relatively common occurrence that not all carrier insurance plans cover. Depending on the carrier and the consumer, it may be more or less appealing to go with a first or third party.
Things to Consider
While it's better to be prepared, there is always a chance that a person with insurance won't ever need it. Cell phone insurance is best for people who work in risky environments, have small children, or are accident prone in general. Insurance doesn't cover natural wear or cosmetic flaws, and is therefore useless for anyone who isn't at risk for real damage. Phones themselves are becoming gradually less fragile as well, with many newer models now water resistant.
Insurance also won't cover damage caused by recklessness or modification. People who tinker with their phone without authorization might not see their claims backed no matter what actually happens to it.
Finally, with insurance, it's important to understand what most policies mean by "repair or replace". If a phone needs to be replaced, rather than provide a brand new, identical phone, the replacement will be either a refurbished device of the same model or one that has similar features. Comparable models with similar features aren't typically downgrades, but there is a risk of dissatisfaction if a person has specific needs.
A careful phone owner may never need to use their insurance, so it may be more appealing to some to just square away a bit of money for an emergency every month instead of giving it to a company. If something does happen, that person can just buy a new phone and spend the rest of the day commending his or her own cleverness and money-management skills. The only thing a careful phone owner needs is a good warranty.
The manufacturer's warranty lasts between one to two years and covers most things that the average consumer will have problems with. If a phone's software breaks down or it stops functioning properly for any reason that the owner isn't accountable for, the warranty will see it fixed. Manufacturers will usually send the original phone back in full function, or replace it with a new one.
Warranties won't cover the major features that insurance does. Theft and accidental damage coverage are not on any warranty out there. Any problem with a phone that is caused by or could be prevented by its owner are essentially outside of a warranty's coverage.
It's a good idea for consumers to read their warranties so they know their specific nuances. Some warranties become void if a phone touches water, is repaired or activated by an unofficial retailer, or if the phone's firmware is rooted. Phones have moistness indicators and tamper seals inside of them that manufacturers will use to decide whether or not the warranty is still valid. It's helpful to know what things to do to avoid being disqualified.
When first buying a phone, most retailers will offer an extended warranty for a fee, which increases the amount of time the standard manufacturer's warranty is in effect. Extended warranties don't behave any differently than normal ones and only increase the window in which consumers are protected from malfunctions and software failures, usually by one or two years. As mechanical failures become more likely over time, if a person is planning to use the same device for several years, extended warranties are worthwhile investments.
Credit Card Benefits
Before buying an extended warranty, consumers should check on the benefits provided by their credit cards. Many cards will extend warranties automatically as long as they are used in the purchase. If this feature is available with a credit card, it will be easily located in its benefit guide, which will also explain how to secure the free extension. Sometimes this will require proof of purchase.
As part of state law, in addition to warranties offered by manufacturers and retailers, consumers are protected by implied warranties. These are made to ensure truth in advertising. If a phone or any other product doesn't do what it is supposed to do, consumers have protection by default. No document needs to be signed, it is a right of all citizens. Consumers can learn more about their implied rights by contacting their local consumer protection office or the Federal Trade Commission.
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