What Does Cell Phone Insurance Cover?

If you haven’t shopped for a cell phone in a while, you might get sticker shock upon seeing the prices. Phones today can cost upward of $1,000 — and whether you pay it upfront or choose to spread payments out over several years, that’s a big investment.

As cell phones continue to advance in technology — and increase in price — cell phone insurance is gaining popularity as a way to protect these investments. Device insurance can cover myriad common problems, accidents and issues that can plague today’s smartphones.

What Does Cell Phone Insurance Cover?

Device protection plans, like other forms of insurance, can cover different forms of damage to phones, but most have a few common areas that are covered. If you are considering cell phone insurance, here are a few things that your new policy likely covers.

1. Battery Replacement

If you’re in the market for a new phone, chances are that your current model is struggling to stay charged. As phones age, their battery life fades, and eventually, this can render a phone useless without having a power source nearby. Some phone batteries will retain their ability to charge for years, but others lose this critical feature more quickly.

A device insurance plan covers battery replacement in most cases, which means you won’t have to deal with a phone that constantly needs to be charged if you have insurance. This is especially valuable given today’s cell phone contracts. Many carriers offer free or discounted phones if you sign up for a three-year contract with the carrier. 

While this seems like a deal on the surface, imagine if you’re just one year into the contract and your phone loses the ability to charge. Situations such as this are exactly why battery replacement is such a crucial part of cell phone insurance.

1. Screen Repair

Everyone’s been there — you dropped your phone and you’re terrified to pick it up for fear of a crack. It might be small in a corner or the whole screen might be shattered, but a cracked screen is a big letdown that can be costly to fix.

While cracks are common, screens can also suffer damaged pixels in a drop that can lead to solid green lines or other odd occurrences in your display. Replacing a screen yourself can cause more damage to your phone, and taking it to a shop to have it replaced can cost over $100. Neither of these options is ideal.

Device insurance covers screen repair and replacement most of the time and as long as you don’t have a high deductible, it can come in handy when your screen breaks, cracks or shatters.

1. Loss and Theft

Not all cell phone insurance plans have loss and theft coverage, but if you have ever lost a phone you know how big of an ordeal it can become. While many new phones feature apps and services that help owners find a missing phone, these can be disabled if a phone is stolen and will not work in all situations when a phone is lost. If you have ever had your phone fall into a lake or ocean off a boat then you know those “find my” apps won’t help much. 

With the right device protection plan, you can get an entirely new phone when yours is lost. These plans often have higher deductibles, but getting a new phone through insurance will be much cheaper than trying to buy a new one — especially if you are in a long-term contract.

1. Malfunctions and Defects

Like so many other pieces of personal property that require insurance such as cars, boats and electronics, some phones are built better than others. This can be true even when purchasing different models offered by a single manufacturer. 

One of the biggest malfunctions is a phone’s battery, but screens, speakers and cell service reception in a phone can malfunction through no fault of the phone’s owner. Without cell phone insurance, this could be a costly repair or a big fight with the carrier, manufacturer and warranty provider. With a device protection plan, you have the option to get your phone repaired or replaced in a timely manner. 

1. Water Damage

Whether you were caught in a rainstorm, spilled a drink or jumped in the pool with your phone in your pocket, getting it wet could cause serious damage or render the phone useless. Rather than breaking out the plastic bag of rice and frantically waiting to see whether it dries out, people with device protection insurance have water damage covered. 

Sometimes, water damage does not fully ruin a phone, but can damage it to the point that it doesn’t retain its full functionality. Instead of waiting out the rest of a contract with a damaged phone, cell phone insurance can provide a replacement or correct the issue.

Cell Phone Insurance vs. Warranty

Many people confuse cell phone insurance and manufacturers’ warranties, but they are not the same and offer different protections. Certain manufacturers and cell phone carriers also offer device insurance, so as a consumer, it’s important to know what is covered and what isn’t under each plan. Do your research to find the right provider for your needs.

An easy way to remember the difference is that warranties cover the phone itself, while device protection plans (insurance) covers the phone plus anything that could happen to the phone.

Here are a few key features of warranties compared to insurance.

• Warranty: Covers defects of the phone; does not cover drops, spills, loss or theft
• Warranty: Only available for a limited time, usually one year
• Warranty: Offered only through the manufacturer and repairs/replacements are made at their discretion

• Insurance: Covers phone defects plus accidents (water, drops, etc.) and loss/theft
• Insurance: Available on a monthly basis and renewed as needed, depending on the policy
• Insurance: Additional monthly charge, but many companies offer insurance and you can choose the policy that’s right for you 

Who Needs Cell Phone Insurance?

While cell phone insurance isn’t a must-have for everyone, there are certain situations when it makes more sense to add a device protection plan than others. People and groups who can most benefit from insuring their devices include:

• Cell phone users locked into a contract: Cell phones today can cost up to $1,500, and in many cases, that cost can be spread out over a three-year commitment. Getting insurance ensures that you won’t have to pay the remainder of that contract plus buy a new phone.
• Businesses: Businesses that provide their employees with phones as a perk of the job, or out of necessity, can benefit from insurance plans on their devices. If an employee loses or damages a business phone, employers can easily replace it through insurance. 
• Parents: Teenagers aren’t always easy on phones. If you have kids on your wireless plan and don’t want to pay for a new phone often, then a cell phone insurance plan is probably a good idea.
• Those seeking peace of mind: Like homeowners, cars or any other insurance, device protection plans help ensure that your investment is not wasted or that a big expense appears out of nowhere.

Compare Cell Phone Insurance Providers

Insurers like AKKO can help you protect your valuable tech investments. Not sure where to start your search for coverage? Consider a few of Benzinga’s top recommended cell phone insurance providers with the chart below. 

Frequently Asked Questions