Cell Phone InsuranceEvery electronics store tries to sell you insurance for your new cell phone. In fact they try to sell insurance for just about everything you purchase these days and we were wondering if it is worth it? The consensus is that you should not purchase cell phone insurance, or for that matter any other insurance for electronics. There are a number of reasons for believing that this is the right approach and there are a number of situations were you may decide to go ahead an purchase cell phone insurance. We will try to cover these situations in this post and the next one, When to buy cell phone insurance. It will be out in two weeks time so come back to our web site to see the next post.

Is Cell Phone Insurance Expensive

Cell phone insurance to begin with is expensive compared to the cost of most cell phones unless you have an expensive PDA or smart phone. It can cost as much as 4 or $5 a month for some phones, which comes to $48 or $60 a year. I do not know about you, but I can use that money elsewhere! If you do lose your phone, you may have to go to the phone store and purchase another one at full price. However depending on your usage, your cell phone provider may partially compensate you for a new phone. Heavy users can get almost any phone they want any time due to the high fee’s they pay. Some cell phone providers automatically provide a free credit towards your next phone after one year so depending on when you lose it you may pay less than you expect.

Other Insurance Options

Depending on the type of credit card you have, your cell phone may be covered on your credit cards insurance. Usually they extend the manufacturers insurance by one year. They also cover lost or stolen items as well. It depends on the type of card you have. You must charge the cost of the cell phone to your credit card for the insurance to be active.

One thing we learned about out credit card is that it only extends the manufacturers warranty for the item, in this case your cell phone. If you purchase extended insurance from the store for your cell phone, you are actually covered twice, if your credit card also provides coverage. In this case it makes no sense at all to purchase an extended warranty!

Probability of Losing your Cell Phone or Having it Stolen

We really do not know what the probability is. However I am sure you know of or have heard of people losing their cell phones. In 30 years we have never lost one and none of my friends have ever lost a cell phone.  Electronics are so dependable these days that they virtually never fail unless you keep them for a very long time. They either work well right out of the box or not at all. So it is pretty easy to tell if you need your cell phone replaced under warranty.

We just do not think it makes financial sense to purchase cell phone insurance and pay the extra fees that are involved.  This applies by the way to all other electronics as well . Save your money to spend on other things. We can all use extra money these days and this is a way to save some money.

In our next post we will examine a few situations were you might actually consider purchasing cell phone insurance. Also what the fine print can say and deductibles that might be an issue for some people. We will have it out in two weeks time on this web site. Stay tuned!

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