Cell phones have come a long way from being mere calling devices. Today, the wide range of applications for a mobile phone include everything from helping you to navigate around the city to providing appointment reminders and keeping tabs on your teen. If you are like most people, your phone is your constant companion.

Losing or breaking your phone can really set you back. And having it stolen is even worse. For this reason, cell phone insurance may be a good idea. With this coverage in place, you can get a replacement phone quickly, whatever the cause of the loss. 

Cell Phone Loss Statistics

Many of us have lost or destroyed a cell phone before. Here are some statistics about nationwide incidents of cell phone loss:

• About 60 million mobile phones are lost or damaged each year.
• Philadelphia, Seattle, Oakland, Long Beach and Newark report the highest instances of cell phone loss.
• People in San Francisco and New York lose their phones three times as often as people in Chicago.
• In 2011, the cumulative value of lost cell phones in America amounted to about $30 billion.

The loss of your cell is both inconvenient and expensive. If your phone will cost a small fortune to replace, you may want to consider cell phone insurance to protect you from loss, damage or theft.

When Bad Things Happen to Good Cell Phones

Most cell phones come with warranties from the manufacturer covering all damage from defects or mechanical failure. Manufacturer warranties usually cover defects for one year. 

However, a manufacturer’s warranty will not cover a replacement phone if you drop the phone and smash it, if you spill your coffee on it, or if your phone is stolen or lost.

Cell phone insurance reimburses you for accidental damage or theft not covered under the warranty. With mobile phone insurance in place, you can typically get a similar replacement for your damaged or destroyed phone.

The deductibles for cell phone insurance are usually around $50-$150. This may seem excessive for a cheaper phone, but when it comes to a a high-end smartphone that costs $500 or more, the deductible is much more affordable to pay for than buying a new phone.

The Manufacturer’s Warranty Is Not Mobile Phone Insurance

Unlike cell phone insurance, the manufacturer’s warranty usually lasts for one year and covers manufacturing defects or mechanical issues. As long as you have taken all possible precautions and used the phone properly, you can get a replacement for a malfunctioning phone with your manufacturer’s warranty.

However, cell phones can be stolen, lost or damaged by accident – which isn’t covered by a manufacturer’s warranty. Mobile phone insurance policies fill in where your warranty ends. If you have a high-end model, coverage for loss and damage especially makes sense.

Does Your Homeowners Policy Include Cell Phone Insurance?

Insurance for mobile phones – when it is included in your homeowners policy – is probably not enough to replace your phone. A typical HO-3 homeowners policy insures all direct physical losses of all personal property listed in Coverage C of the policy document. The only condition is that a covered peril needs to be the cause for the loss.

Therefore, if you listed your mobile phone in Coverage C and insured it against theft, you would receive coverage for the theft of the mobile phone. 

If your theft coverage pays for the depreciated value of the phone, you will still pay a considerable amount to buy a brand-new one. You also need to pay a deductible before your coverage kicks in.

Homeowners seldom conduct a complete assessment of their personal belongings before opting for full replacement value coverage in their homeowners policies. Make sure you understand what personal belongings are covered, and for what amounts. 

Adding your cell phone as a line item to your homeowners policy, or getting a separate rider, will ensure that you’re covered when something dire happens to your phone.

What to Look for in Cell Phone Insurance

Insurance for mobile phones makes sense under certain circumstances, but you want to be sure you are getting the benefit and value you need. Here are some questions to ask:

• What is the coverage and scope of the cellular phone insurance? Does the policy cover accidental damage, phone theft and loss?
• What does the coverage cost? Multiply your monthly premiums by the length of the policy and then add the deductible. For example, if you pay $10 a month for 3 years, then $10×36 = $360 + deductible of $50 = $410. If the price of a new cell phone is less than the amount you would be paying, you may decide that buying a new phone would be a more cost-effective option.
• How will the cell phone will be replaced in the event of a loss? Will you get a similar model or a better one? Will the replacement be a new phone or a refurbished one?

Considerations When Evaluating Cell Phone Insurance

Only you know whether cell phone insurance makes the most sense for you. When deciding whether to buy coverage, consider the value of the cell phone and your usage. 

If you are a person who uses your phone for everything from staying in touch with your kids to managing your email, consider whether you can afford to be without it. Are you a very careful person, or do you tend to drop your phone?

Be sure to evaluate the cell phone coverage carefully and ask such questions as:

• What will it cost to replace your phone out of pocket?
• If you are considering insurance, how much is the deductible?
• Will the insurance cover the cost of calls a thief made after stealing your phone?

Your insurance coverage should fit your needs and give you peace of mind. When you research your options, take the time to get a few quotes before you buy, so you can feel confident that your coverage has a high value and can protect your investment adequately.