Phone Insurance vs Self Insuring

[catchinup]

I have a Verizon plan and pay for the insurance which I have used several times. Perhaps 4 or 5 over the last 10 years. I usually have a mid-range priced phone. I'm still using a fully paid for Google Pixel 6 pro, for example. It works fine for my purposes.

However now I want to transfer to US Mobile or one of the other prepaid providers. Leaning towards US Mobile because from what I read they have excellent customer service and are on the Verizon network. But if I do that, I don't think I can have phone insurance. So in that case I would probably buy a second cheap phone as a backup in case something happens to my Pixel and take the risk.

I'm curious what others do?

[gac1979]

What are you insuring against? Between my wife and I, we’ve had one cracked screen in the past 10 years. That was maybe $100 out of pocket. If you really feel like you need the insurance, check out some of your credit cards. I believe some provide coverage for your phone so long as you pay your bill with the cc.

[jebmke]

I have never insured a phone and don't intend to start. My only issues have come from hardware failures, not insurable incidents.

[Moniker]

A phone breaking would cause inconvenience but would not cause a large, sustained change in my family's lifestyle.

I insure our home, cars (liability), and NPV of future income to achieve financial independence. I view insurance as a means to shift financial risk of catastrophic events to another party. Not as a means to prepay for goods/services. But others may have a different view.

[Onlineid3089]

I wouldn't insure something as inexpensive as a phone. Paying 500-1000 to replace a broken phone is an immaterial expense that would easily fall within normal cash flows.

[catchinup]

What are you insuring against? Between my wife and I, we’ve had one cracked screen in the past 10 years. That was maybe $100 out of pocket. If you really feel like you need the insurance, check out some of your credit cards. I believe some provide coverage for your phone so long as you pay your bill with the cc.

I've had my phone stolen a couple of times. I've also dropped it or gotten it wet. Most recently the LED went out on it's own. I didn't drop it or anything. The insurance replaced it at no cost to me.

[cmr79]

Carrying phone insurance and having a backup cheap phone seem like protection against two different things...insurance is to replace the phone and probably isn't worth it unless 1) you know that you are higher risk to use it than the company providing the insurance or 2) you genuinely can't afford to replace the phone with another model that will fit your needs, while the backup cheap phone seems more like it is a "use in case of emergency" option if you can't be without cell phone access for several hours to overnight in order to get a new phone if yours dies. Which situation are you in?

[02nz]

Like with any other kind of insurance, the insurance company has the stats and will always come out ahead. For risks that are not catastrophic to your finances, always self-insure.

[Rocinante Rider]

I insure only against loses that would have a catastrophic financial effect. This typically includes only life, disability, health, home, auto liability, and umbrella. Would an uninsured loss of your phone, or any other consumer product, have a life-altering financial effect for you?

[HooCares]

Just get a credit card that offers cell phone insurance.

Chase Freedom Flex offers $800 cell phone insurance with $50 deductible
Wells Fargo Active Cash offers $600 cell phone insurance with a $25 deductible

You just need to pay your monthly bill on the card. Caution that if you sign up for an annual plan (Mint/US Mobile) then this insurance will not work as it's only active in the month following your last payment.

[Onlineid3089]

I've had my phone stolen a couple of times. I've also dropped it or gotten it wet. Most recently the LED went out on it's own. I didn't drop it or anything. The insurance replaced it at no cost to me.

Did they really replace it at no cost to you, or are you just paying the cost every month on the chance you need it replaced?

[jebmke]

I've had my phone stolen a couple of times. I've also dropped it or gotten it wet. Most recently the LED went out on it's own. I didn't drop it or anything. The insurance replaced it at no cost to me.

Did they really replace it at no cost to you, or are you just paying the cost every month on the chance you need it replaced?

When I had hardware failures with Samsung and LG phones the carrier replaced them like for like. Both times were boot-loops. After the second one I did my own boot loop and ditched Android phones and tablet entirely.

[mouth]

I have never broken a phone, had it stolen, or had what would be an "insurable event", and my first smart phone was an HTC Droid Incredible in 2010. I guess I just have nimble hands Though I did drop a phone once straight into the dog water bowl at a dog park. As I was doing what I was doing my brain yelled, "YOU KNOW BETTER AND YOU KNOW WHAT COULD POSSIBLY GO WROOOOOOOO" as the phone fell. Luckily it was one of the first water resistant Pixels and it came out no worse for the wear.

Moral of the story, I don't buy insurance because I know the insurance company has better stats than I do and they want to make money. I don't feel like subsidizing more clumsy people or paying the insurance company for a risk I can easily bare upon myself (unlike say, home fire insurance!)

I also never trade-in/sell my last phone; THAT is my "inconvenience" insurance to be able to immediately be up and running after the usual lengthy app update. Charge it to 50% and then stick it in your drawer until the time you need it. I've even loaned it to friends who had unfortunate accidents and just couldn't wait (one was leaving for overseas the next morning!). That gives me plenty of time to shop for the replacement phone I want (possibly waiting for a sale), which is likely to be a newer model anyway. As opposed to the refurbished replacement the insurance will give me, which also might not even be the same phone if they don't have enough in stock because I keep my phones for so long (unless they do cash now?).

[KlangFool]

What are you insuring against? Between my wife and I, we’ve had one cracked screen in the past 10 years. That was maybe $100 out of pocket. If you really feel like you need the insurance, check out some of your credit cards. I believe some provide coverage for your phone so long as you pay your bill with the cc.

I've had my phone stolen a couple of times. I've also dropped it or gotten it wet. Most recently the LED went out on it's own. I didn't drop it or anything. The insurance replaced it at no cost to me.

A) What is the price of your phone?

B) What is the monthly premium of the car insurance?

KlangFool

[cashmoney]

I have a Verizon plan and pay for the insurance which I have used several times. Perhaps 4 or 5 over the last 10 years. I usually have a mid-range priced phone. I'm still using a fully paid for Google Pixel 6 pro, for example. It works fine for my purposes.

However now I want to transfer to US Mobile or one of the other prepaid providers. Leaning towards US Mobile because from what I read they have excellent customer service and are on the Verizon network. But if I do that, I don't think I can have phone insurance. So in that case I would probably buy a second cheap phone as a backup in case something happens to my Pixel and take the risk.

I'm curious what others do?

IMO best insurance is to have a back up phone you can activate in case phone is lost or needs repairs and knowing i could replace my phone on Swappa or Ebay for much less than buying new.Also my understanding is if the insurance replaces the phone it's going to be a refurbished phone anyway.

[Doctor Rhythm]

I only buy insurance when it's mandated or if the an uninsured loss would be financially painful. A phone doesn't even come close to that.

[StevieG72]

I pay my phone bill with a credit card that provides insurance as long as bill is paid each month with the CC.

[MathWizard]

I don't insure for things I can easily replace.

Get a good case.

I have dropped phones a few times, and never had a problem.
No cracked screens, phones always worked fine afterwards.

Two phones slid from the roof of my car onto a concrete road at
25 mph, and both worked fine. The iphone still works. The
other phone worked for months, and went into a boot loop,
which that phone was known for anyway.

[jayhawk]

I have never had insurance on my iPhone, started buying a iPhone in 2010 and replacing it every 3-4 years. I have never wished I have had insurance. So I guess I self insure.

[catchinup]

are you just paying the cost every month on the chance you need it replaced?

Correct. However, if I had broken the screen or otherwise damaged the phone via accident, I would have paid a deductible.

[catchinup]

Ok, based on the responses, I guess I should stop paying for the insurance via Verizon. I can certainly afford to buy a replacement phone if needed. My problem is, I do lose my phone sometimes or it gets stolen. On top of breaking it sometimes. I've gotten much better about not putting it down in public places. But overall I tend to be distracted/thinking about things other than what I'm doing in the moment.

[catchinup]

Carrying phone insurance and having a backup cheap phone seem like protection against two different things...insurance is to replace the phone and probably isn't worth it unless 1) you know that you are higher risk to use it than the company providing the insurance or 2) you genuinely can't afford to replace the phone with another model that will fit your needs, while the backup cheap phone seems more like it is a "use in case of emergency" option if you can't be without cell phone access for several hours to overnight in order to get a new phone if yours dies. Which situation are you in?

I would like to have a back up phone for when mine dies (as it did the other day). I have also lost or broken my phone on numerous occasions. I never did the math in a spreadsheet. But for example, a google search tells me I could by a refurb Google Pixel 6 pro for $100-$150. So yeah, I guess I'm wasting my $ on the insurance.

[Cruise]

Just get a credit card that offers cell phone insurance.

Chase Freedom Flex offers $800 cell phone insurance with $50 deductible
Wells Fargo Active Cash offers $600 cell phone insurance with a $25 deductible

You just need to pay your monthly bill on the card. Caution that if you sign up for an annual plan (Mint/US Mobile) then this insurance will not work as it's only active in the month following your last payment.

Amex Plat as well.

[PeninsulaPerson]

But overall I tend to be distracted/thinking about things other than what I'm doing in the moment.

Might be good to start training yourself out of that!

No phone insurance and being compelled to pay the Stupid Tax might be one way.


(I keep thinking that protecting one's bandwidth for focus is a key issue! More important than ever.)

[HooCares]

Just get a credit card that offers cell phone insurance.

Chase Freedom Flex offers $800 cell phone insurance with $50 deductible
Wells Fargo Active Cash offers $600 cell phone insurance with a $25 deductible

You just need to pay your monthly bill on the card. Caution that if you sign up for an annual plan (Mint/US Mobile) then this insurance will not work as it's only active in the month following your last payment.

Amex Plat as well.

Yes, many others but I wanted to give the OP some free options

[jebmke]

Ok, based on the responses, I guess I should stop paying for the insurance via Verizon. I can certainly afford to buy a replacement phone if needed. My problem is, I do lose my phone sometimes or it gets stolen. On top of breaking it sometimes. I've gotten much better about not putting it down in public places. But overall I tend to be distracted/thinking about things other than what I'm doing in the moment.

That's why I often simply leave mine in the glove compartment or at home if I am off somewhere where the phone isn't needed. It probably stays on my desk 75% of the time gathering dust.

Verizon stores around me are open seven days a week so in a pinch, I could be back up and running in a couple of days I would guess.

[cmr79]

Carrying phone insurance and having a backup cheap phone seem like protection against two different things...insurance is to replace the phone and probably isn't worth it unless 1) you know that you are higher risk to use it than the company providing the insurance or 2) you genuinely can't afford to replace the phone with another model that will fit your needs, while the backup cheap phone seems more like it is a "use in case of emergency" option if you can't be without cell phone access for several hours to overnight in order to get a new phone if yours dies. Which situation are you in?

I would like to have a back up phone for when mine dies (as it did the other day). I have also lost or broken my phone on numerous occasions. I never did the math in a spreadsheet. But for example, a google search tells me I could by a refurb Google Pixel 6 pro for $100-$150. So yeah, I guess I'm wasting my $ on the insurance.

Yes, agree. If you need to have a backup phone around anyway, and that phone will meet your needs at least temporarily, paying for additional phone insurance is redundant and probably actuarially a net loss, unless you've run the numbers yourself and realize that your risk is higher enough vs what the insider thinks it is that you are likely coming out ahead. Which, of course, tends to work itself out after you've used the insurance a few times and the cost goes up!

[Cruise]

What are you insuring against? Between my wife and I, we’ve had one cracked screen in the past 10 years. That was maybe $100 out of pocket. If you really feel like you need the insurance, check out some of your credit cards. I believe some provide coverage for your phone so long as you pay your bill with the cc.

I've had my phone stolen a couple of times. I've also dropped it or gotten it wet. Most recently the LED went out on it's own. I didn't drop it or anything. The insurance replaced it at no cost to me.

Phone stolen several times? How did the thefts occur? Seriously, how could this happen? I count myself lucky. No thefts after using a cell phone since the pocket-sized models were introduced 30 something years ago. .

[stlrick]

My father was in the insurance business for 50 years, from going door to door for Met Life after WW2 to owning a large general agency. His one guiding personal rule was: Save for the unexpected. Insure for the catastrophe.

[HooCares]

My father was in the insurance business for 50 years, from going door to door for Met Life after WW2 to owning a large general agency. His one guiding personal rule was: Save for the unexpected. Insure for the catastrophe.

He must have known the margins!

[gotoparks]

If you have used the insurance 5 times in 10 years you are probably getting your money's worth. I don't know where to get phone insurance except maybe credit cards. I have an iPhone and if something happened to it, I would pay out of pocket to fix or buy a new one; whichever is cheaper. I am on Tello which is barebones so I would go to the Apple store.

[Ccthealias]

You can pay your bill with a credit card that has cell phone insurance. We had claimed it a few times when we crack the phone. I would never buy a separate insurance plan.

[boglegirl]

I just ordered the latest model iPhone which is going on my bill at ~$22/month.

They tried to pressure me into an insurance plan at $18/month My deductible for accidental damage would be $99. For loss/theft, it's $249. How does that plan possibly make sense for anyone?

(needless to say, I declined. I've only had accidental damage to one phone in approx 15 years of smart-phone usage so I feel good about self insuring)

[Oreamnos]

Phone insurance is just ridiculous, in my opinion. Whenever I chat with someone who mentions their phone insurance, I must admit I wonder "What is going on with this person's life such that phone insurance is perceived to be a good idea?" Exceedingly clumsy? Bad at personal finance? Easily duped by salespeople?

[zie]

Ok, based on the responses, I guess I should stop paying for the insurance via Verizon. I can certainly afford to buy a replacement phone if needed. My problem is, I do lose my phone sometimes or it gets stolen. On top of breaking it sometimes. I've gotten much better about not putting it down in public places. But overall I tend to be distracted/thinking about things other than what I'm doing in the moment.

So you *might* be in the weird corner case.

Generally speaking you buy insurance for 3 reasons:

* You can't afford the cost of replacement
* You know something the insurance company doesn't(say you *will* use it more than the premium suggests)
* The cost of insurance is less than the cost of replacement over some reasonable replacement rate.

2 and 3 are somewhat related.

You might have option 2 apply. You say you regularly use the insurance. So you need to do a touch of math to see if it works out. An example

* Cost of phone $500
* Cost of insurance $45
* Cost of deductible: $0.
* Average # of times you use the phone insurance in a year: 3

$45/month x 12 months = $540 per year premium. So you need to use the insurance at least twice a year in this scenario. In my example, you usually use the insurance 3 times a year, so you are way ahead, as if you had to replace the phone 3 times a year, it would cost you $1,500 per year. Since the premium is only $540 per year, you come out way ahead by buying the insurance instead.

This is not usually the case, as it doesn't make sense for the insurance company to insure this, as they are losing money on you every year. Generally speaking insurance companies strive to make money instead. If enough people got such a good deal, they would raise the cost of insurance for everyone until such time as it makes them money again.

Most people don't use the insurance on small items like this. For instance the extended warranty on jewelry, tools, phones, headphones, cars, TV's. etc is rarely used by most people, which is why they can still make money even when they have a few like this example where they lose money.

Personally, I pretty much never buy extra insurance/warrant on any small good anymore. The only case where I do buy it, is when I know something the insurance company doesn't. That I'm unique in my ability to break said item more than insurance assumes.

So *it* can make sense to buy phone insurance, but you usually have to be in a fairly unique situation. Based on your comment, it's possible you fit that situation, but you need to do some basic math to verify that, before purchasing.

Good luck!

[catchinup]

Ok, based on the responses, I guess I should stop paying for the insurance via Verizon. I can certainly afford to buy a replacement phone if needed. My problem is, I do lose my phone sometimes or it gets stolen. On top of breaking it sometimes. I've gotten much better about not putting it down in public places. But overall I tend to be distracted/thinking about things other than what I'm doing in the moment.

So you *might* be in the weird corner case.

Generally speaking you buy insurance for 3 reasons:

* You can't afford the cost of replacement
* You know something the insurance company doesn't(say you *will* use it more than the premium suggests)
* The cost of insurance is less than the cost of replacement over some reasonable replacement rate.

2 and 3 are somewhat related.

You might have option 2 apply. You say you regularly use the insurance. So you need to do a touch of math to see if it works out. An example

* Cost of phone $500
* Cost of insurance $45
* Cost of deductible: $0.
* Average # of times you use the phone insurance in a year: 3

$45/month x 12 months = $540 per year premium. So you need to use the insurance at least twice a year in this scenario. In my example, you usually use the insurance 3 times a year, so you are way ahead, as if you had to replace the phone 3 times a year, it would cost you $1,500 per year. Since the premium is only $540 per year, you come out way ahead by buying the insurance instead.

This is not usually the case, as it doesn't make sense for the insurance company to insure this, as they are losing money on you every year. Generally speaking insurance companies strive to make money instead. If enough people got such a good deal, they would raise the cost of insurance for everyone until such time as it makes them money again.

Most people don't use the insurance on small items like this. For instance the extended warranty on jewelry, tools, phones, headphones, cars, TV's. etc is rarely used by most people, which is why they can still make money even when they have a few like this example where they lose money.

Personally, I pretty much never buy extra insurance/warrant on any small good anymore. The only case where I do buy it, is when I know something the insurance company doesn't. That I'm unique in my ability to break said item more than insurance assumes.

So *it* can make sense to buy phone insurance, but you usually have to be in a fairly unique situation. Based on your comment, it's possible you fit that situation, but you need to do some basic math to verify that, before purchasing.

Good luck!

Ok thanks, I'll do the math!

[MnD]

My Dad was an attorney that did a lot of work for insurance companies.
Hus advice was "never insure anything you can afford to cover the loss on UNLESS someone else is paying the premiums".

[f8andbethere]

Caveat on credit card phone insurance: the terms often require that you pay your phone bill each month with the card and exclude pre-paid plans and MVNO carriers like US Mobile. Best to double check the fine print before assuming you can qualify for this benefit.

[PottedPlant]

I insure our home, cars (liability), and NPV of future income to achieve financial independence. I view insurance as a means to shift financial risk of catastrophic events to another party.

Bingo!

[the_wiki]

The phone company has more expensive and lower quality coverage than Apple. If you want to insure the phone, use AppleCare. It’s way cheaper than 18$ a month and you can get same day service at any Apple Store.

I get it for more expensive iphones. $1200 glass device I carry everywhere in my pocket is fairly high risk.

[Yarlonkol12]

What's the reason your needing to use phone insurance, are you dropping/breaking your phones? If so, have you considered an Otterbox Defender type of case for your phone? All of the devices used by our family are equipped with one of those, they have saved countless devices over the years

[gotoparks]

What's the reason your needing to use phone insurance, are you dropping/breaking your phones? If so, have you considered an Otterbox Defender type of case for your phone? All of the devices used by our family are equipped with one of those, they have saved countless devices over the years

Thanks for the heads up. I bookmarked and will look into for my next phone purchase.

[the_wiki]

What's the reason your needing to use phone insurance, are you dropping/breaking your phones? If so, have you considered an Otterbox Defender type of case for your phone? All of the devices used by our family are equipped with one of those, they have saved countless devices over the years

I personally would rather pay for AppleCare than use a giant chunky case.

[Outer Marker]

I never insure small risks I can afford to cover myself. My sig. other had an "insurance" plan on her phone. - when it came time to pay up for a loss, the age of the phone vs. current replacement price with new plan made the coverage essentially worthless. Hard pass on phone insurance.

[bberris]

A pixel 6 is worth maybe $150. You could probably go without insurance.

[GoldStar]

I have never had insurance and have never needed it.
Seems a waste of money to me.

[Yarlonkol12]

What's the reason your needing to use phone insurance, are you dropping/breaking your phones? If so, have you considered an Otterbox Defender type of case for your phone? All of the devices used by our family are equipped with one of those, they have saved countless devices over the years

I personally would rather pay for AppleCare than use a giant chunky case.

I felt like that initially but I've actually grown to like these cases a lot, and I use a big phone: iPhone 16 Pro Max. Even though the case adds bulk, it also makes it much easier to grip/hold

[WoostaGal]

I have a Verizon plan and pay for the insurance which I have used several times. Perhaps 4 or 5 over the last 10 years. I usually have a mid-range priced phone. I'm still using a fully paid for Google Pixel 6 pro, for example. It works fine for my purposes.

However now I want to transfer to US Mobile or one of the other prepaid providers. Leaning towards US Mobile because from what I read they have excellent customer service and are on the Verizon network. But if I do that, I don't think I can have phone insurance. So in that case I would probably buy a second cheap phone as a backup in case something happens to my Pixel and take the risk.

I'm curious what others do?

Haven't read the whole thread. Having a second cheap phone as backup can be a good approach and it's what I do. I've tested my backup phone by putting my existing SIM card in it and it works flawlessly. So if my primary phone craps out, I could just move the SIM card into the backup phone until I get a new one. If you require a phone to log into your employer's IT systems, not having a phone could be a real problem and that's why I did this. Also, I know people who live alone who use this approach because they don't have access to a partner's phone if theirs fails.

Of course if you lose your primary phone, this approach may not provide you with immediate phone service. But you could keep a second SIM card around to pop in your backup phone to activate new service ASAP.

[Padlin]

I’ve heard of phone insurance, always laughed it off. If I lost or broke my phone every other year maybe I’d do a little digging and see if it was worth having. Kind of like getting laptop insurance for high school and college kids.

[LikeNumbers]

We dropped landlines about 20 years ago and have never insured our mobile phone(s), or any other electronics.