In the modern day individuals can insure just about anything, especially gadgets. Fancy $200 cell phones are no exception to this. However, unlike house insurance, which is a must, experts do not suggest buying cell phone insurance.
There are many reasons why experts do not suggest individuals purchase an insurance policy. To begin with, many individuals do not even understand what their policy even entails. Behind pages of complicated text are usually equally complicated replacement phone policies. Many individuals are surprised that although they purchased insurance for their phone, it does not mean that they will automatically be given a new phone if anything happens. Many are required to pay a deductible, like medical insurance, usually around $50 before that can acquire a new phone. Others are instead given “refurbished” phones instead of new ones. (Refurbished phones are those that are not actually new and could have been returned to a customer due to scratches and dents, but companies fix these minor problems before passing them on to others.)
Another problem arises when individuals actually need to file a claim. One of the major supposed benefits of cell phone insurance is that for those who need their phones 24/7, especially for business, they can quickly get a replacement at low to no cost. Many people however do not have this experience when they go to cash in their insurance policy. Claim processing often gets delayed, making the promised one- or two-day turn around promise unrealistic. Additionally, because cell phones turn over so quickly the phone the individual lost or broke is likely to be out of stock, meaning that they may be given a replacement that only has some of the features of the original phone, or they may be put on a waiting list until replacement used models of the original phone are brought in. Just because individuals have cell phone insurance does not mean that they can get whichever phone they want if their original phone is out of stock. Often insurance companies will only offer lower phones with fewer features to customers, even though it is the companies fault that they no longer have the phone.
Finally, the exact wording of the contracts is often very particular. Individuals must realize that these insurance policies are actually contracts with outside third party companies whose goal is to make a profit like any other company. They are not working with the wireless carrier to the point that making the customer is their number one priority, ie they do not really care if an individual has a bad enough experience that they want to switch providers, unlike the actual wireless company. Because of this, many times the fine print of the contracts will void out many common problems that occur in phones, such as cracked screens that do not hamper the functionality of the phone, or normal wear and tear. Not to mention that many people do not realize that inside the back of the phone is a water detector (the red and white tab) that shows companies that the phone was exposed to any amount of water, which generally overrides some companies policy on insurance as well.
Overall, insurance policies on phones make sense in very limited cases. Unless individuals buy several hundred-dollar phones and are extremely prone to losing or destroying them, normal warranties with phones will usually do enough for the average consumer. There is no point to pay for cell phone insurance when it is more costly than replacing the phone at times.
Ashley Russell is a North Carolina native, hailing from Kings Mountain. She is a diehard Carolina fan who loves to watch her team play in any sport—a Tar Heel born and bred. She loves to read and write in her free time. Since high school, she has known she wanted to pursue a career that involved both reading and writing. However, she has recently discovered a love for computers, so she also hopes to incorporate them into her career. She spends her free time tutoring k-5 students in reading and writing in the Chapel Hill area. She is a second-year captain of a Relay for Life team and a participant in Dance Marathon 2011. She is also the online webmaster for the Blue & White magazine based out of Chapel Hill.
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