Is Cellphone Insurance Worth It?

Whether you should get your cellphone insured depends on five questions you should ask yourself.
The value of cellphone insurance is tied to your personality and circumstances.
Muharrem huner via Getty Images
The value of cellphone insurance is tied to your personality and circumstances.

Is phone insurance worth it? That’s a question that is almost impossible to answer universally, in the same way that nobody can agree on what they see in a Rorschach test.

Another way to put it: Cellphone insurance is an excellent idea and can be a lifesaver, unless it’s not.

That’s in part because phone insurance is expensive. But if you squint and don’t think about it, you can pretend that you’re just adding on another monthly streaming service and deciding whether you want it with ads or ad-free. The costs are often comparable.

For instance, Samsung Care+ prices range from $3 a month to $17.99 a month (assuming a 36-month service contract). AppleCare+ offers coverage for the iPhone14 Pro and iPhone 14 Pro Max at $9.99 a month, or you can pay $199 at once for two years of coverage (and save about $40). If you have an iPhone 14 Plus, you’ll pay $8.99 a month or $179 all at once (and save around $36).

Not surprisingly, with cellphones, the more you pay for the phone, the more you pay to insure the phone.

Generally, if you’re going to pay for cellphone insurance, you can count on paying around $10 a month (see, comparable to streaming), but you may wind up paying more or less, depending on your phone and what type of coverage you want.

Which doesn’t help you at all to decide if it’s worthwhile, does it? So if you’re struggling with whether to buy insurance for your cellphone, here are some questions to ask yourself first:

Are you a klutz?

If you can imagine dropping your cellphone on a concrete sidewalk and shattering the screen, consider getting phone insurance. Or at the very least, some sort of protective case and maybe a screen protector.

Are you always losing things?

If the answer is yes and you can envision leaving your cellphone in a public bathroom and never seeing it again, there is probably a good case for you to get phone insurance.

Are you good at saving money?

If the answer is yes, strongly consider not buying cellphone insurance. You could put money into your savings account, and then if something goes wrong, get your cellphone repaired or replaced.

Are you good at saving money but not much money, and often raid your savings account?

And now we’re back to reconsidering cellphone insurance. After all, plenty can go wrong with a cellphone, from having it damaged to lost or stolen. And if your phone costs $1,000 or northward, for many people, it isn’t something easily replaced.

Or even easily fixed. The average cost just to repair a phone screen is $200, according to HomeAdvisor.com. It’s easy to understand why some people throw up their hands and pay for cellphone insurance. And some people do make a compelling case.

I’m a frequent traveler, a father in a busy home, and the head of my own company. Sometimes to no fault of my own, my phones have been lost, broken, or just a bit too slow or with terrible batteries,” said Will Ward, co-founder of Industry Arabic, an Arabic translation services company.

Ward said that he pays for Apple’s iPhone Upgrade Program, which starts at $39.50 a month and bundles together phone insurance with an annual upgrade to the newest iPhone model.

“I don’t want to waste my time worrying about my phone or shopping for a newer model,” he said. “Although I know I’m paying a bit of a premium for this service, the peace of mind it gives me is worth it.”

Well, there you go. You can’t really argue with that. And yet ― well, you can.

R.J. Weiss is a certified financial planner and founder of the personal finance website The Ways to Wealth, who spent 10 years working in the insurance industry.

As he put it, insurance is “a great way to transfer risk for things you can’t afford to protect yourself… Without something like home insurance, nobody would want to buy a home, as the risk would be too high.”

But a cellphone?

“When it comes to more specialized products that protect minor risks, like cellphone insurance, most are better off self-insuring,” Weiss said. “After all, these products are priced so the insurance company guarantees itself a profit from them. A damaged cellphone can ruin your day, but it shouldn’t cause significant financial damage. Worst-case scenario, one could buy a cheaper phone on monthly payments.”

For those folks who were nodding approvingly throughout Ward’s comments, you should lean toward getting cellphone insurance. If you think there should be a statue of R.J. Weiss in a city park, maybe don’t get cellphone insurance.

Does life constantly disappoint you?

Great! You’re a good candidate for cellphone insurance. That isn’t intended as a slam on the cellphone insurance industry. If you have cellphone insurance, and something goes wrong, you’re probably going to be thrilled that you made the decision to buy it.

That said, it’s easy to pay for cellphone insurance month after month and forget that if something goes wrong, you may have a deductible to pay first as well as a service fee. Using cellphone insurance can be a little like eating a low-carb candy bar. In the long run, it’s probably a good idea, but there’s always going to be a little part of you eating it and dying inside.

If you are leaning toward getting cellphone insurance, where should you get it?

Excellent question with no right answer. The choices of where you might buy your cellphone insurance are almost dizzying. Here are several of the options:

  • The company that makes your cellphone. Apple and Samsung, for instance, offer their own cellphone insurance plans.
  • The company that gives you your cellphone coverage. For instance, you could get cellphone insurance coverage through providers like AT&T, T-Mobile, Verizon, Mint Mobile or Consumer Cellular.
  • The company that insures you for other things, like your homeowners or car insurance. You could also buy your cellphone insurance coverage directly from an insurer, like Allstate, Geico or Progressive, just to name a few insurers that offer cellphone insurance.
  • A company that offers extended warranty coverage. Asurion and SquareTrade are also big names in the cellphone insurance game. You can buy your policy directly from them.
  • The company that supplies you with your credit cards. It’s also possible that you already have cellphone insurance through your credit card and don’t have to pay a thing, except perhaps an annual fee. If your credit card does offer cellphone protection, just remember that it will only be active if you’re using your credit card to pay for your cellphone monthly payments.
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