When Smartphone Insurance Isn’t Worth It

by Colleen Kane

Despite dropping my iPhones all the damn time since 2010, I never cracked a screen until this week. I attribute the streak of unbroken screens to slider cases by Incase, which I’ve used since scoring a free one at SXSW from bins near the outdoor stage where GWAR played. Soon after, I dropped my first iPhone two stories from my fire escape, but lo! The dirt-infused Downtown Brooklyn air parted as I climbed down to retrieve the phone, and although the white plastic case was cracked, the device was fine. I became a brand advocate.

So, what caused me to stray from this loyalty? A free golden Jennifer Lopez-branded case came with my new 5s gold iPhone in July at Viva Movil, a J. Lo-endorsed Verizon store. But as we now see, freedom isn’t free. I knew the case probably wasn’t very good at protecting the phone (you know, its actual purpose), but I was already feeling vulnerable after shelling out for the phone, and hey! Free shiny thing.

Besides, I had opted for the insurance, provided by Asurion, which also supplies insurance to the other major carriers. The Verizon Wireless website makes this case for it:

Why is protection important?
Getting equipment coverage or an extended warranty for your device means that you can be protected from damage, loss, malfunctions and defects. The cost of replacing your device without protection may be as high as full retail price.

Despite being a frugal person who seeks out items that are built to last, and reads pages of reviews of products to make sure I don’t buy something shoddy, in this particular case my frugality didn’t translate to reading the fine print.

My Precious in its J.Lo case. We had four glitzy months together, but nothing gold can stay.

What I took away from my in-store briefing about the insurance was that for $10 a month, I can get my phone replaced if the screen cracks or it suffers water damage or otherwise needs replacement. Sounds good.

However, what was not apparent until I initiated my claim online was the $199 deductible you have to pay for this “free” replacement phone, without guarantee of getting the same or an unused phone. It’s also super wasteful to get a whole new phone just because the screen is broken. You can even replace the screen yourself, but despite the eternal bragging rights, I do not wish to mess with the guts of my pocket computer.

Instead, I paid $100 to get my screen replaced at SmartAddiction in Bay Ridge, Brooklyn (with a 30-day warranty and a free anti-glare screen protector), whereas the Apple Store charges $149. While it was getting repaired, I went Christmas shopping up the street at Century 21 and purchased a designer-label gift that originally went for $95 for $27. See? I’m practically getting paid to not use my insurance.

I also canceled the Asurion plan. That extra $120 a year plus the $199 deductible makes no sense unless you break the screen three times a year or you need to completely replace the phone.

But to my mind, the most pressing threat to an iPhone, the one that you see happening regularly, is a cracked screen. Here I go tempting fate by saying: I’m not likely to lose mine since when I’m out if I’m not holding it, I’m always reaching into my purse for my phone to make sure it’s there. But if your phone is lost, stolen, or otherwise needs replacement, I don’t agree with the Verizon website’s claim that you may have to pay up to the full cost of a phone to replace it. You don’t have to do anything. There are options. Unlocked phones are sold on eBay, or you can get one from a friend who upgraded. Or maybe even consider something affordable that’s not an iPhone. There’s also rumors of cheaper insurance that costs half of what Asurion charges and often doesn’t have a deductible.

In conclusion, even if you are one of those slapstick klutzes in an informercial for whom everything is impossibly hard and who falls down the stairs on the regular, do not waste your money on this nonsense. A good quality phone case (make sure the edges overlap the screen, as my repair guy pointed out) is a better investment than the insurance. I have to go read dozens of user reviews now, but the iPhone 5 version of my iPhone 3-saving Incase, their slider case, is priced on Amazon as low as one cent.

Colleen Kane is so committed to getting more for her money that she just moved from Brooklyn to Staten Island. You can find her on Twitter @colleenkane, but she’s more into ‘gramming @colleenkane.

Photo: Thorsten Hartmann

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