How to Compare Mobile Phone Insurance

Comparing cell phone insurance policies and choosing the right one for your cell phone can save money.

If you've just bought a cell phone, chances are your wireless provider asked whether you wanted to buy insurance for the phone. You can elect to buy cell phone insurance from your wireless provider or a third-party insurance company. Insurance policies vary, and it's important to compare each insurance plan to ensure you get the best value for your money.

Instructions

1. Determine whether the insurance plan covers water damage. Some insurance plans do not cover water damage, and will not replace your phone if moisture has seeped inside.

2. Compare the deductible. All mobile phone insurance plans have a deductible, which means you have to pay a certain portion of the cost of replacing the phone, and the insurance pays the rest. For example, the deductible for your $500 smart phone may be $70.

3. Examine the plan to determine what voids the insurance. Under some insurance plans, altering of the phone, such as "unlocking" it so it can be used on any provider's network, voids the insurance.

4. Consider whether the insurance company will pay for a new phone, or send you a refurbished one. A refurbished phone isn't the same as a new phone. A refurbished phone is a phone that previously had something wrong with it and was repaired.

5. Look at the insurance policy to see what has to happen to the phone for the insurance company to replace it. Just because you have a cracked screen doesn't mean the insurance company will replace your phone. Some insurance policies specifically state that your phone will not be replaced for normal wear and tear, such as a cracked screen, if the damage does not interfere with the functions of the phone.

6. Consider the cost of insurance. Typical cell phone insurance rates in late 2010 run $3 to $5. If your cell phone only cost $50, it might not be worth the cost to invest in an insurance plan. If your phone cost $500, buying insurance might be the prudent choice.

References

• MSNBC: Do you need cell insurance?
• AT&T: Wireless Phone Insurance