Many cell phones have grown far beyond that of being a simple device for making telephone calls. Smart phones actually include a sophisticated computer that enables it to take and transmit photos, connect to the internet and perform a wide variety of other functions.
The cost of cell phones has risen in proportion to their sophistication. And, while most cellular companies offer huge discounts on the device when upgrading a service contract, the cost of repairing or replacing a damaged or lost phone can be staggering.
When purchasing a new cell phone, the service providers almost always offer insurance for the phone. I recently upgraded my phone and was offered insurance at a price of $6 - $7 per month. At first glance that seems reasonable, right? But when you think about it, that’s an insurance premium of $72 to $84 per year. Then if something happens to the phone there is often a deductible, and then the phone you receive is often a refurbished phone, not a new one as you may think.
Before purchasing insurance through your cell phone provider, check with your homeowner’s insurance agent. You may be surprised to learn that you can add coverage for cell phones to your homeowner’s insurance policy by scheduling it, much like the way you would insure jewelry. The scope of coverage and price varies from one insurance company to another and they will usually charge a premium based on the value of the phone. For example, one of the companies we represent offers scheduled coverage for cell phones, GPS units, and similar devices and they charge a premium of $6 for each $100 of its retail value. In other words, the premium to insure a $600 smart phone would be $36.00 per year if added to this particular insurance company’s homeowner policy. That’s about ½ of the premium charged if buying insurance through the cell phone company. And, this particular insurance company has no deductible that applies to scheduled items.
With any insurance, you will want to review exclusions to be aware of things that the insurance won’t cover. With phones, the intent of the insurance is to cover the device itself so you may find exclusions to be things like loss of data/photos, costs associated with activating a new phone, damage to batteries, services covered under a warranty, obsolescence, etc.
Call us at Insurance Planning Service for additional further information on insurance for many items - from cell phones, to jewelry, bicycles to collections at 800-220-5582 or click here to contact us online. We can help!