Is Cellphone Insurance Worth It?

Is paying a small ($5 - $11) insurance premium each month worth it in the case of a cellphone? Plans cover repair/replacement in case of damage, and in some cases, even theft or loss. There is a deductible which can range from $50 - $250.

In general, no: insurance is a risk pool and the insurer makes money. However, if you feel you are more likely to use it than the average bear, then it might be worth it for you. Your judgement call.

Naturally it depends on the fine print and the reputation about making claims and the cost of your phone now and the time you make a claim. A phone that costs anything will cost less a lot in a year or two. I'd have to make a general assumption, no. If they're selling it, it isn't worth it.

Plus they don't repair anything. Your phone goes in the heap, your saved things(photos, videos,) are lost forever and you get a completely different phone.

Do you feel lucky? Maybe if you're a drunk, jinx, butter fingers, then maybe, maybe, if bad things keep happening to your phones.

Quote: onenickelmiracle

and you get a completely different phone.

And the replacement phones usually aren't new, they're refurbs....

If you don't have to have the latest "flagship", there are plenty of great Android phones in the $200-$350 range unlocked and brand new.

Phones are so strong now that a screen issue isn't really the big thing anymore. My phone is waterproof so dropping it in the toilet isn't a big deal anymore. If you get a new phone every 2 years then you will pay an extra $250 plus maybe a deductible of $200. For that you could almost just buy the same phone as long as you don't lose it in the first month.

Quote: onenickelmiracle

Naturally it depends on the fine print and the reputation about making claims and the cost of your phone now and the time you make a claim. A phone that costs anything will cost less a lot in a year or two. I'd have to make a general assumption, no. If they're selling it, it isn't worth it.

Plus they don't repair anything. Your phone goes in the heap, your saved things(photos, videos,) are lost forever and you get a completely different phone.

Do you feel lucky? Maybe if you're a drunk, jinx, butter fingers, then maybe, maybe, if bad things keep happening to your phones.

With cloud backup so ridiculously easy that even I can do it, you are a fool if you lose all your data to a broken phone.

Remember that you will usually have to replace your phone at retail, or have to buy a used one or a refurb yourself. And phones are notoriously easy to drop, lose, or be stolen.

I'd call it break even, with the decision to be based on your tolerance for risk, and whether you have a newer expensive phone, an older mid-range phone, or an old feature phone instead of a smartphone. I have it on our phones, and we've used it many times.

Claims are easy. I called at 7PM one evening and the new phone was there the next day, along with a box to send the old one back. Activate the new phone, restore from cloud backup, mail old phone, done.

I think a lot has to do with; can you afford it. If you are going to be near break even, realistically you are spending more with the insurance. Anyways let's say it is close. Would you prefer to spend 250 over 24 months plus deductile or would you rather have a bill for $500 at one shot. Remember not all breaks require a claim. You can often get phones fixed cheaper than the deductible.

I have had a cell phone since 1997. So in 20 years I have never had a broken phone. If I was paying $10 a month that would be over 2k. I can break 3 phones and still be at break even. However my best friend has broken his 2 times this year alone.

This phrase will be engraved on my headstone:

"INSURANCE IS -EV"

Insurance of any kind is only good if the result of not having it would cause you serious financial hardship.

If the cost of replacing a phone causes you serious financial hardship, you should not have that expensive of a phone to begin with.

For $40-$60, I can just replace mine. Insurance is a waste.

Quote: djatc

This phrase will be engraved on my headstone:

"INSURANCE IS -EV"

My homeowners is about $800/year.

Our house was hit by a tornado. The roof and chimney was covered. I could have paid for it (about $12k) but I didn't want to.

I had an option to add a sewage damage waiver, which would cover the damage if the sewer backed up into the house. It was about $10/mo. I thought about it, and decided that we lived above everything, and anyhow I never heard of that happening to anyone, and I declined it. 19 years later, the sewer backed up into the house, and it cost almost $20k when all said and done.

My father's second wife, her first husband scoffed at insurance, saying that it was foolish. He died in his 40s, leaving her with three teenagers and a mortgage and no job skills (in the late 1960s and early 1970s women were still mostly wives). He had no life insurance.

Insurance is for leveling risk and making investment and economic decisions more predictable. Having both those can outweigh the cost of the coverage, by letting you allot funds more advantageously. People might say that they'll just put aside the $10/mo and then if something breaks they'll fix it, but 1) no one ever does that, and 2) what if it breaks in month 3? Now you got $30 toward a $600 phone.

That's my reasoning. And sure, I can afford a $600 phone. I simply don't want to have to. And all that being said, I firmly agree with those who say no to coverage, because it is a personal choice. Lots of folks are okay with the risk.

Quote: DRich

Insurance of any kind is only good if the result of not having it would cause you serious financial hardship.

If the cost of replacing a phone causes you serious financial hardship, you should not have that expensive of a phone to begin with.

I was going to write this, but I don't have enough room on my headstone for that. But I agree. There are exceptions.

Quote: djatc

This phrase will be engraved on my headstone:

"INSURANCE IS -EV"

Kind of thought you might do something like

"To matiyaga"

Do these plans cover when chargers don't fit snug any more? Or does that just mean you should replace the charger? This phone was good for months. Think tripping on the wire might have been what ruined that.

Just because it's -EV doesnt necessarily mean it's a bad deal. (Wtf iPhone won't autocorrect "doesnt" to "doesn't"....AND if I shift+ it doesn't go back to letters wtf...?)

Anywho, it depends on more than just value. I know at least one person who would have insurance at +EV, since he will lose his phone once a month guaranteed.

But it's also how much value for how much volatility you're giving up.


It's like gambling. Sort of. Would you rather play $0.25 100-play 9/5 JoB or $25 single play 9/6 DDB for $1M coin in and getting back $50k in FP? I'd rather give up the extra 0.5% and play JOB over DDB. Hell, I'd probably rather just flat out pay $20k cash straight up than take $15k or $10k in -EV.

For reasonably responsible people, phone insurance isn't worth it. For people who have a habit of having their phone hanging out of their hoodie pocket while leaning over the toilet or The legion of drunken stupids drinking those dumb drinks in the shape of the eiffel tower while laying their phone on the closest resting place it is.

I hate the fact that with life insurance a company is betting you will live and you are betting you will die.