by Bill Stone

Created on: January 02, 2009

Whether or not you choose to buy phone insurance involves many factors, but all of them involve determining how much you will pay, and what you get for your money. Let's narrow the scope of the discussion slightly to make it more relevant. Let's assume that you pay your bill out of your pocket, not your business or company. So the extra $5 to $10 is coming out of your pocket. We're also assuming as a part of this discussion that you paid about $100 for your handset. You may have paid less, but for argument's sake, we'll simplify the cost and say you paid $100. We'll also assume the monthly fee for your insurance is $4.95 (we'll round it to $5), and the deductible for the replacement phone is $50. Those charges may be different for your carrier; be sure you read through your insurance policy before you join.

If you do lose your phone, you need to pay a deductible (anywhere from $50 - $100) and you will be given a "replacement" phone. "Replacement" phones are not always "factory-refurbished" which means something completely different. Usually, the phone insurance companies will buy used phones and give them out as replacements. In many cases, they are not what you would normally expect from a "factory-refurbished" device; often, they are of far worse quality, but still operable.

To put this discussion into perspective, let me detail for you an example. I sign up with AT&T, and get a Blackberry Curve (new) for $99 after rebates. If I were to buy insurance on the phone, and lose my Curve after one year, I would have paid $60 plus tax for the insurance plan, and a $50 deductible, and I'd have gotten a "replacement" phone, not as good quality even as a factory-refurbished phone. That's $110 plus tax for a replacement phone, not to mention all the paperwork and the waiting I'd have to go through to file the claim (police reports, etc).

Instead, I could take that $110 and go to eBay and buy a "new-in-box", "never opened" AT&T Blackberry Curve using Buy It Now (not waiting for the auction to end) and usually get it within the same timeframe as the insurance phone, perhaps sooner. And the phone I'd get from eBay would be brand new as opposed to refurbished.

My recommendation on insurance: Save your money. You can get better quality phones for the same price from eBay. Don't bother with the insurance. If you got a new phone from insurance, it might be worth it. As it is, the replacement phones are barely worth what you pay for them.

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