What Does Cell Phone Insurance Cover?

Many cellphone users have experienced the gut-wrenching moment when their new mobile device splinters against the pavement or splashes into the toilet bowl. Fortunately, there are opportunities to protect your investment with cellphone insurance. Specific benefits vary, but a typical cellphone insurance plan covers situations in which your phone is lost, stolen or damaged. It extends protection beyond what you get with a standard warranty, or takes over after your warranty expires.

Initial Coverage

Major wireless manufacturers or service providers offer a basic warranty at the time of purchase or acquisition of a phone. Unlike the broader protection available with insurance, these warranties often protect against just manufacturer defects, leaving you in the lurch if other problems arise.

Buying an insurance policy right away allows you to expand your protection to include loss, theft or damage to your phone, according to Esurance. You would have to pay out of pocket for a replacement or revert to an older phone model if you lose or damage your phone without coverage. With insurance, you get repair or replacement under any of these standard types of coverage. Top insurance companies cover water damage that results from spills or dropping the phone into a body of water as well.

Extended Protection

Whether you buy insurance upfront or after the initial warranty expires, coverage also serves to extend benefits for device failures. If your phone malfunctions after one year and one week, you are out of luck with a standard one-year warranty. Having protection in place, or buying it prior to expiration, allows you to avoid this potential setback.

Costs and Usage

Insurance policies are available either directly through a service provider or via an insurance company. Some cell providers partner with third-party firms to offer plans to their customers. Premiums vary, but you can normally get basic coverage for less than $10 per month as of June 2015. Some companies restrict policy purchases to the first 30 days of service. Deductibles of $25 to $100 or more are common as of June 2015, as are maximum annual claims and benefit payouts. Boost Mobile and T-Mobile insurance plans both allow for up to two claims in a 12-month period, for instance.

Tip

Insurance providers offer monthly payment options, or extended coverage periods of two to three years with discounts when you make full payment upfront.