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Best Smartphone Insurance

Which Smartphone Insurance is Best?

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Posted on 7/15/2013 11:49 EST

Opinions differ on whether extended warranties for electronics and other expensive items are worth the cost. But the peace of mind that comes with having phone insurance if your hand slips and the device splatters may be priceless. SquareTrade, a company that offers phone insurance, found that 30 percent of iPhone owners accidentally damaged their phone within the prior 12 months. While the cost of repairing a cracked screen is about $50, if your phone drops in water (almost always it's goodbye phone) replacement costs easily top $500.


Photo by Viorel Sima/Shutterstock

Many sites that offer consumer guidance, including Cheapism.com, generally recommend against shelling out for extended warranties. As Consumer Reports has found, some items, such as appliances, rarely breakdown before an extended warranty expires -- and if they do the cost of repairs is often less than that of the warranty. The devices we can't live without -- smartphone, tablets, and laptops --however, can be knocked out of commission by a spilled cup of coffee, a restless child, or slippery fingers. These products are the best candidates for warranty coverage because of their high risk for damage and high replacement cost. We compared cheap phone insurance plans for the iPhone and Samsung Galaxy S4 and settled on SquareTrade as the best iPhone insurance and, in combination with a Costco membership, the best insurance provider for the Samsung smartphone.

In our search for the best cheap phone insurance (i.e., one that provides excellent coverage at wallet-friendly cost), we were surprised to find so few options. In addition to the companies listed below, we also checked out Warranty Life, which offers similar coverage at a slightly lower cost, but could not reach anyone to confirm plan details -- which told us enough right then.

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iPhone 5 16gb ($699.99) Warranty with Accidental Damage Coverage

Insurer Cost/2 years Deductible (accidental damage) Accidents Covered Water Damage Coverage
Apple Care+ $99 $49 2 Yes
Geek Squad (advanced plan) $229.98 or $14.99/month $0 Unlimited; phone replaced after third "qualified" repair Spills but not submersion
SquareTrade $99 $50 Until repair/replacement costs exceed price of phone (at least four repairs) Yes

Galaxy S4 ($749.99) Warranty with Accidental Damage Coverage

Insurer Cost/2 years Deductible (accidental damage) Accidents Covered Water Damage Coverage
Geek Squad $169.98 or $9.99/month $0 Unlimited; phone replaced after third "qualified" repair Spills but not submersion
SquareTrade $125 or $6.99/month; $99 if purchased at Costco or Sam's Club $25 if phone purchased at Costco $49 if phone purchased at Sam's Club $99 everywhere else Until repair/replacement costs exceed price of phone (at least four repairs) Yes

What Happens When Your Phone is Damaged Beyond Repair?

Even a day without a mobile phone can be stressful, which is why the time between accident and replacement is critical when deciding on the best cheap phone insurance. With Geek Squad and AppleCare+, the process moves along faster if you bring the damaged phone into a store. Apple can hand over a replacement right away after assessing the damage; Geek Squad needs to ship the phone off and requires a $50 deposit for a loaner phone (the model depends on availability). If you aren't near a physical location, both phone insurance packages include the cost of shipping the damaged device to a repair location. Apple places a temporary charge on your credit card and sends a replacement right away (even before receiving the damaged item). With Geek Squad you wait longer for a replacement because the damaged device must be assessed before next steps (i.e., repair or refurbished replacement), which can take seven to ten business days. Lacking retail locations, SquareTrade is at a comparative disadvantage but does let you take the phone to a local repair shop and send a copy of the receipt for reimbursement. Once you go through the claim process you can request a replacement phone be sent through overnight mail.


Photo by robert_s/Shutterstock

Best iPhone Insurance

After comparing each of the three cheap iPhone insurance options, SquareTrade emerges the winner. With a SquareTrade warranty you can repair the device or replace it at an Apple store, and then be reimbursed. This is the best option if your phone is totally destroyed because the refurbished replacements come from Apple instead of a third-party repair shop. The marginally higher deductible with SquareTrade is far outweighed by the guarantee of four repairs, and then some until total repair costs match the price of a new iPhone. AppleCare+ allows only two repairs. Geek Squad fell out of the running despite a zero deductible due to the high initial cost and no coverage if the phone falls into water.

Best Galaxy S4 Insurance.

Deciding on the best phone insurance for the Samsung Galaxy S4 is a little trickier. SquareTrade's coverage depends on where you buy both phone and plan. With a Costco or Sam's Club membership and a phone bought at the respective retailer, a SquareTrade warranty costs $99 and the deductible is $25 (Costco) or $49 (Sam's Club). These plans also include the option of receiving a replacement phone, shipped overnight, if yours breaks. If you buy the smartphone and insurance elsewhere, the SquareTrade warranty costs $125, the deductible is $99, and you must take your phone to a repair shop and request a reimbursement or send it in for repairs. Geek Squad's zero-cost deductible is certainly appealing, but the warranty cost is higher and there's no coverage for water immersion damage. After weighing these factors, our pick for the best phone insurance for the Galaxy S4 is a SquareTrade policy obtained, along with the phone, through Costco.

by Louis DeNicola (Google+ Profile)


Filed in: Android, Apple, Insurance, iPhone, Smartphones
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