Cell phone insurance is a waste of your money in most of the cases. You should avoid getting cell phone insurance for the following reasons.
- High insurance cost: A cell phone may cost you from $20 to $500. The insurance for cell phones costs about $5 to $8 per month. If you assume that you will pay $7 a month, the insurance will cost you at least 168 dollars over two years. Most of the companies have deductible of about 100 dollars. So, total cost for your insurance will be 268 dollars (if you need to use it). The possibility that you will need another phone is minimal.
If you are really unlucky and something happens to your phone, you can get an old one from online stores, Craigslist, Ebay, or from friends.
- Manufacturer’s warranty: Almost all phone set makers provide one year of replacement warranty. If anything happens within a year, they will replace your phone for free. Why do you have to pay for the insurance that you already have? Say NO to the sales person who wants to sell cell phone insurance to you.
- Insurance use is very low: According to Consumer Reports, only 20% of the cell phone insurance is used. This indicates that 80% of the consumers who buy cell phone insurance are wasting their money.
- Buy insurance from you: Yes, you can buy insurance from yourself. Saving for yourself is insuring you. Deposit the money that you will spend on cell phone insurance into a savings account. You will find that you will have enough money to buy your next phone or a replacement phone in case your old phone breaks or gets lost. This will buy you peace of mind and save you from unexpected bad situations.
For the reasons explained above, you should avoid buying insurance or extended warranty for your cell phone. If you do so, you will save money in the long run.