Insurance is absolutely necessary on many major purchases, but what about your phone? While cell phone insurance may bring down the cost of a cracked screen at the register, you may end up overpaying in the long run.
In this article, I’ll take a close look at how cell phone insurance works, how much you can expect to pay for cell phone insurance and why money expert Clark Howard recommends avoiding it altogether.
How Cell Phone Insurance Works
Cell phone insurance promises to repair or replace your device when needed. It’s marketed as a money-saver when you drop, damage or lose your phone. Plans often cover accidental damage, water damage, broken/cracked screens, mechanical failures and more. Some plans also cover loss and theft, though these insurance plans are often slightly more expensive.
While it may sound like a great deal to insure your brand-new phone, Clark warns against wasting your money.
“It is a horrifically terrible idea to buy cell phone insurance from T-Mobile, Verizon, AT&T or any other cell phone company,” warns Clark. “It is a rip-off, rip-off, rip-off. Don’t do it.”
Even if you’ve paid to insure your phone, you’ll likely still owe a deductible for fixing a cracked screen or replacing the device if it’s lost or stolen.
Screen repair costs up to $49 with cell phone insurance, and a standard deductible ranges up to $499. While these charges will only be due if you file a claim, you’ll still be paying the monthly cost of your cell phone insurance regardless.
Fortunately, there are a few alternatives that can help you protect your phone without paying for a cell phone insurance plan that may not even meet your needs or pay off. I’ll share Team Clark’s top recommendations for cell phone insurance alternatives later in this article.
Cell Phone Insurance Plans
To better understand how cell phone insurance works and how much it costs, I took a closer look at a few popular cell phone insurance plans.
There are a couple of different ways that you can insure your phone: You can purchase insurance through your wireless carrier (AT&T, T-Mobile or Verizon) as an add-on fee to your monthly bill or through a third-party subscription service (AppleCare+, Samsung Care+, SquareTrade, etc.)
Here’s how much you can expect to pay for cell phone insurance, how much it costs to repair a cracked screen and the standard deductible due when you file a claim:
|Price||Cost for Screen Repair||Standard Deductible|
|AT&T Protect Advantage||$14-$17 per month|
$45 for four devices
|T-Mobile Protection360||$7-$25 per month||$29||Up to $499|
|Verizon Mobile Protect||$14-$17 per month|
$60 for four devices
|AppleCare+||$3.99-$9.99 per month|
$79-$199 for two years
|Samsung Care+||$3-$11 per month|
$49-$239 for two years
|SquareTrade by Allstate||$8.99 per month|
$19.99 family plan (up to four devices)
*These prices reflect Verizon Mobile Protect’s updated plan valid beginning April 27, 2023.
It’s important to know that these plans do not include an unlimited number of claims. Additionally, the cost of a screen replacement, standard deductible and phone eligibility, in general, will depend on what model cell phone you own and when/where you purchased your device.
You can visit each company’s website to learn more about what’s covered, what’s not covered and how much it would cost to insure your phone. If you do opt for cell phone insurance, it’s important that you know what you’re paying for.
For example, many cell phone insurance companies promise phone replacement in several scenarios, but you will often get a refurbished replacement phone— not necessarily a new one!
Alternatives to Cell Phone Insurance
As you can see, there are several reasons why Clark recommends avoiding cell phone insurance completely. Instead, he recommends taking a different approach to protecting your cell phone and your wallet.
Here are five alternatives to cell phone insurance that you should consider when buying a new phone:
1. Free Cell Phone Insurance From a Credit Card
Clark recommends using a credit card that provides free cell phone insurance if you pay your monthly cell phone bill with that credit card. Fortunately, there’s no shortage of options to choose from!
For example, American Express has 11 different credit cards that offer up to $800 in coverage with a $50 deductible.
You can check out our full list of credit cards that offer cell phone protection to see the best current offers.
“Using a credit card that provides this protection for free is vastly superior,” says Clark. “In absence of that, a great case.”
2. Get a Case
Instead of paying for expensive cell phone insurance each month through your wireless carrier, opt for a better case. Otterbox is a popular option that creates protective cases for smartphones. They may be a bit bulky, but they’re great for protecting your smartphone if you drop it.
You can get a protective case like this on a discount site like eBay or Amazon. But even if you pay full retail price — which can be about $39.95-$99.95 for an iPhone 14 case — it’s still a lower-cost way to protect your phone than cell phone insurance.
3. Try a Repair Shop
If you’ve cracked the screen of your phone or damaged something mechanical (like the backlight or speaker), a local repair shop may be able to help you out for a lower cost.
I recommend calling a couple of highly-rated phone repair shops in your area and asking how much it would cost to replace the screen of your phone. It’s almost certainly going to be a better deal than paying for cell phone insurance and meeting your deductible.
4. Check Your Homeowners Policy
Cell phones may be covered by renters or homeowners insurance. This can be a lifesaver if you damage or lose your phone or if someone steals it.
You can find out if your cell phone is covered by your renters/homeowners insurance by looking at the “personal property coverage” section of your policy. You can also call or message an agent to discuss your current cell phone protection.
5. Pay Yourself the Monthly Insurance Cost
Another option for keeping yourself and your personal belongings covered is to simply build your emergency fund. Instead of buying cell phone insurance and paying for something that you may or may not even use, consider paying yourself directly instead.
Put the money that you would be using for your cell phone insurance monthly payment and/or deductible into a savings account instead. Then, if something does happen to your phone, you’re able to take care of it yourself.
Alternatively, if you take good care of your phone and don’t need to repair or replace anything, then you’ve built a great little savings account full of cash that’s better off in your pocket than with a cell phone insurance provider!
Final Thoughts: Is Cell Phone Insurance Worth It?
Between the high monthly cost, the deductible and the fact that you’ll often get a refurbished phone for a replacement, smartphone insurance is hardly ever worth the cost. For this reason, Clark has a very simple answer:
“Don’t waste your money on it. Period.”
Instead, buy a good protective case and a screen protector. Additionally, consider paying for your monthly cell phone bill with a credit card that offers free cell phone insurance. These two options will pay off a lot more in the long run than paying a monthly fee and high deductible to a cell phone insurance provider.
Meanwhile, if you’re looking for the best cell phone plans and deals, then be sure to check out our top picks at Clark.com.
Finally, let us know your thoughts on cell phone insurance in our Clark.com Community.