Do You Need Cell Phone Insurance?

You went out and shopped around for the perfect cell phone. You picked out the best one. You made sure it has all the features it will need to have. You probably signed a 2 year contract in order to get that new handset at an reasonable price. Now you ask yourself the question, "Do I need to get insurance for my new handset"?

Well, at first glance it sounds like a pretty good deal! Most plans cost around $5 a month. The guy who sold you the new phone tells you, you're covered if you lose the phone, you're covered if the phone flys out of the car window doing 85 mph down the interstate, what the heck he tells you it's covered in almost any situation! You say to yourself, "For $5 a month" , "what could it hurt". But in the end, is your handset going to be replaced no matter what, and are you really going to get your $5 worth of monthly piece of mind? Well, let's take a good look at it.

First of all, your new handset is going to be covered with a manufacturer's warranty for 1 year from the date of purchase. The only thing that warranty will take care of is a defective handset. If you drop the phone or lose the phone, or someone steals your phone, your out of luck. So unless the phone malfunctions or is defective, the manufacturer's warranty is just about worthless. Ok so I need that cell phone insurance plan, right? Well according to some consumer groups, they mostly advise people to decline the extra coverage. In today's world, you can buy some sort of insurance coverage on just about anything. For a lot of people, they end up spending a bunch of money on extended coverage for all kinds of devices they own. So what if you lose your phone! Whether they say to buy it or not, wouldn't it be better to have it in the event the phone is misplaced? Well.....

If you lose your phone and it just happens to be one of those $500 smart phones, then yes maybe it would. But if you have a standard cell phone, probably not. In the event your phone is lost, most insurance plans carry a $50 deductible. On top of that, many consumers complain that the new phone sent to them ends up being a refurbished or used handset. Probably not exactly what you had in mind when you agreed to that extra $5 a month plan! So unless you are an accident prone person who loses everything that isn't connected to your body, or your phone cost several hundred dollars, it won't end up being worth it to pay for the insurance coverage.

When you buy that new cell phone, don't agree to sign up for that extra coverage until you see the terms and conditions in writing. Don't buy into how wonderful it may sound coming from the salesperson trying to sell it to you. Don't buy into it because the brochure or ad makes it sound great either. The only way to know for sure is to see the policy in black and white! If your still not sure, I know how painful the process of reading all that small print can be, ask the salesperson if you'll get a brand new replacement handset. Ask him how long it will take to get it. Also find out how much the deductible is. Consider if the coverage is worth it compared to what you paid for the phone.

In the end, most cell phone providers will give you up to 30 days to decide if you want to add the coverage to the phone. So you won't have to decide right then and there. Most of those policies you buy are not being offered by the phone manufacturer anyway. It's almost always a third party company offering them. So they make there money by taking yours and never paying out a dime on the coverage. In the end, unless you buy a phone that is very expensive, and you have a habit of losing or breaking them, it's just not going to pay to buy that extra coverage. Should you lose your phone, you could probably go on E-bay and buy a used phone for less than the deductible on that insurance plan anyway!