Why Is Cell Phone Insurance Important?
Whether or not to get cell phone insurance is a hot topic among both financial advisers and mobile phone enthusiasts. Many say that the insurance, which as of 2010 is usually around $5 a month plus a deductible if your phone is replaced, is not worthwhile and the manufacturer's warranty is enough. There are, however, some viable reasons for choosing the optional insurance.
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Manufacturer Warranty Limits
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A manufacturer's warranty generally only covers mechanical and software issues and coverage only lasts a specified time, usually one year. If you aren't the type to trade up for the latest phone each year, insurance might be a good idea for you.
Accidents Happen
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Manufacturer's warranties do not cover your phone if you forget it in a taxi, leave it in your pocket and put it through the washing machine or drop it and crack the screen. Cell phone insurance, however, does cover these incidents.
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Replacement Time
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A phone warranty often will require you to mail the phone back to the manufacturer for it to determine whether or not the phone can be fixed or needs to be replaced. In the meantime, you will be without a phone.
Replacement Cost
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Cell phone companies often entice customers with offers of free or deeply discounted phones for signing up for a new plan. But when you need a replacement phone in the middle of that plan's contract, you won't be eligible for a new free phone and will have to pay the retail price to replace it. Consider, for example, that Apple's iPhone 4 costs $199 with a new plan, but if you are not eligible for an upgrade it will cost you $399 to replace.
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References
- Photo Credit my cell phone image by rafalwit from Fotolia.com
