Should You Buy Cell Phone Insurance?

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You can get insurance on just about anything these days. Cell phone insurance is often pitched as a real money saver for people who frequently drop or lose their phones.

In this article,I’ll explain how a typical cell phone insurance policy works, look at what the major wireless carriers charge for these plans and suggest some cheaper alternatives.

Here’s What You Need To Know About Cell Phone Insurance

Do you buy cell phone insurance through your carrier at the same time you purchase the phone, or should you do the whole process online?

If that’s your dilemma, money expert Clark Howard says you’re asking the wrong questions.

He says the real question is whether you should insure your cell phone at all.

“You should never insure something that is a consumer item,” he says. “People always worry about insurance on narrow things instead of the big things in life they really need it on.”

“As a general rule, people are emotionally drawn to buying insurance on fun things like a TV, cell phone or gaming console,” Clark says. “It’s this psychological thing where the phone becomes so important to us that we feel like we should insure it.”

But there are some compelling reasons for skipping the cell phone insurance your wireless carrier offers.

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How Cell Phone Insurance Works

Cell phone insurance promises to repair or replace your device when needed. There are two basic ways to get the coverage — either through your wireless carrier as an add-on fee to your monthly bill or through a third-party monthly subscription service.

AT&T relies on a company called Asurion for their smartphone insurance business, while T-Mobile and Verizon use Assurant.

Both of those main players promise next-day replacement in a number of scenarios:

  • Loss
  • Theft
  • Physical damage
  • Liquid damage
  • Mechanical defects after the manufacturer’s warranty ends

These plans tend to run anywhere from $100 to $200 annually. Should you make a claim, you then have to meet a deductible of anywhere from $50 to $300 before coverage kicks in.

But after paying all that, you often get a refurbished replacement phone — not necessarily a new one!

The other way to get insurance on your smartphone is to purchase coverage separate from your wireless provider. AppleCare+ (exclusively for iPhones) and SquareTrade, which offers protection for both Android and iPhone devices and is owned by Allstate, dominate in this area.

Cell Phone Insurance Plan Comparisons

Here’s what you’ll pay with the major wireless carriers for smartphone insurance. All numbers are for coverage on a single phone as of January 2020.

Carrier PlanMonthly ChargeDeductibleCost of Cracked Screen Repair
AT&T Mobile Insurance $8.99$25-$299$49
Sprint Complete$9$25-$275$29
T-Mobile Protection <360>$7-$15$20-$275$29
Verizon Total Mobile Protection$14-17$19-$249$29

At the time of this writing, the monthly premiums for AppleCare+ range from $10 to $15 a month, while deductibles run anywhere from $29 to $269 per incident. SquareTrade, on the other hand, starts at $8.99 a month with deductibles ranging from $25 to $149 per claim.

Alternatives to Cell Phone Insurance

The coverage these plans offer to protect you against loss, theft or damage to your phone is important. But here’s the thing: There are cheaper ways to get the same protection! I’ve got details below on three of them.

1. Free Cell Phone Insurance From a Credit Card

There are more than a dozen credit cards that offer free cell phone protection when you pay your monthly bill with their cards.

Wells Fargo has several different cards offering this benefit. Each features a $25 deductible and up to $600 of protection for damage and theft. However, they will not cover the loss of a phone.

Wells Fargo isn’t the only one with these kinds of benefits; at least four other credit card issuers offer free cell phone insurance on some of their cards. You can see the list here.

2. Get a Case

Instead of paying for expensive cell phone insurance each month through your wireless carrier, why not get something like an Otterbox? It’s a protective case for smartphones that some might consider clunky, but it goes a long way toward 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 based on our research can be about $20 to $50 for an Otterbox iPhone 10 case — it’s still a lower-cost way to protect your phone than cell phone insurance.

Oeago is another brand of smartphone case that tends to be more reasonably priced. Some Oeago cases start at less than $10!

The bottom line is that any case you put on your phone is better than no case at all.

3. Try a Repair Shop

Here’s another thought: Try a local cell phone repair shop when your phone breaks especially if you’ve just cracked the screen.

Repairs tend to price out somewhere between $99 and $150 at these shops. That’s based on our calls to two shops in metro Atlanta for a cracked screen repair of a Moto e5 Play. That turns out to be cheap compared to buying insurance through your wireless carrier (and don’t forget about that deductible).

Final Thought

Between the high monthly cost, the deductible and the fact that you’ll often get a refurbished phone for a replacement, smartphone insurance isn’t exactly what it’s cracked up to be — pun intended!

“The best insurance you can have for a cell phone is to put a protective case on it and a screen protector and not buy any insurance,” Clark says. “Or you can use a credit card that comes with cell phone protection for free.”

Meanwhile, if you’re looking for the best cell phone plans and deals, then be sure to check out our comprehensive guide.

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