iPhone Insurance: Do You Need It? For Any Pricey Smartphone?

Does it makes sense to pay a little extra every month for insurance on costly smartphones?
Is it worth it for an iPhone or Galaxy series device, which are available for $200 or more with a two-year contract?
The answer depends on many factors, including the buyer’s potential for losing or damaging the phone. And if you’re a parent getting a smartphone for your teenager, the likelihood of lost or theft increases if your child carries the phone around school.
Before considering insurance, do the math. In most cases, insurance is well worth it during the first year of smartphone ownership. Most new-generation smartphones can cost upwards of $600 without a contract.
An insurance plan can cost $5 a month through a carrier, or more if it’s offered through a third-party, such as Best Buy or other retailers. But retailers mostly cover mechanical defects to the device, and may not cover loss or theft. The same goes for extended warranties offered by Apple or other device makers.
Overall, third-party insurance plans offered by carriers will likely include coverage for accidental damage, loss, theft and a malfunction not covered by the manufacturer’s warranty.
However, every smartphone insurance plan will have a deductible that can cost you well over $100. The fees and deductibles often depend on the device you are insuring. Make sure to do your homework, since many policies charge higher premiums and have higher deductibles for pricier or more popular devices, such as the Apple iPhone.
Phandroid.com provides a good example of the costlier insurance plan. The site reports that the Samsung Galaxy Note 2 will cost $175 to replace starting in March, while paying anywhere from $6 to $12 a month to keep it insured if your carrier is T-Mobile.
The standard deductible to insure any smartphone on T-Mobile will also go up an extra $20, jumping from $130 to $150 with the monthly charges remaining the same.
The device goes for $370 (after $50 mail-in rebate) with a two-year agreement. But if you don’t have insurance, you have to come up with $650-$700, the full price of the smartphone without a contract.
“While I could see it making sense to insure a brand new phone like the Note 2 upfront, I can’t see how it would be worthwhile after a year (phones depreciate quickly),” writes Chris Chavez on Phandroid.com. “A year from now you’ll most likely be able to find a Note 2 on Craigslist for around $200.”

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