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Mobile phone insurance versus repairs – how do costs add up?

Posted: , by Maxwell R.

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Mobile phone insurance versus repairs – how do costs add up?
Ever drop and shatter the screen on your smartphone? Your precious? Your portal of connectivity to all things social? Ever wear out a camera module from addiction to taking pictures of every meal you make, and every cat you encounter?

Back in the days when I was a retail rep for one of the major wireless carriers, it was always a priority to offer mobile insurance with every new or upgraded phone. You know the drill, an extra $7-10 per-month would provide the peace of mind should the unthinkable happen to that mini-computer you just bought. Yes, there was incentive to sell the feature, but by-and-large, the service works with little undue drama should the unthinkable happen, and coverage was immediate.

More than a few times, a customer would reject the offer, and not get across the parking lot before dropping their brand-new flagship on the pavement, effectively destroying the display or causing some other unseen damage. With tears in their eyes, some would beg for an accommodation, an exchange , or a retroactive addition of coverage. Tears would often turn to rage when some customers realized the true cost to replace a broken device (a sad byproduct of subsidized contracts).

Such stories made mobile insurance a compelling offer, but does it really offer the best value for the money? If you crack a screen or need a new battery, might going to a local shop for a repair be a better option? The common concern about going to an onsite repair shop is use of quality replacement components. After all, if you found your smartphone to be suffering from a failing battery, you are not keen on the idea of a replacement unit acquired in a volume close-out discount from the Galaxy Note 7 assembly plant. Ultimately, there is no definitive solution for everyone, but for the majority of consumers out there, the answers may surprise you 

The pros and cons of mobile insurance


Mobile device insurance, like any other, is the type of service you would rather have, and not need, versus need and not have. That is the whole point of insurance in the first place. In that light, mobile insurance, as provided through carriers and a few third-party companies, offers peace-of-mind and convenience. It is the type of service to sign up for, and forget about it, until you need it. When you do need it though, the process is usually as simple as a phone call or making a claim online. Such insurance services also tend to be able to replace the newer devices soonest.

That convenience comes at a cost, however. On average, most programs cost $10 per-month. If nothing breaks, that is $120 spent over a year with no discernable return. What if something does break? Well insurance replacement units are often supplied very quickly, often the next day. However, in addition to monthly premium payments, there is a deductible. Using AT&T’s published schedule, depending on the type of device you have, that deductible can be as little as $12 (for a feature phone or hotspot), or as high as $299 (for a 256GB iPhone 7 Plus). Verizon’s plan has a deductible for the same iPhone at $199. Also, insurance is not generally available for devices that are not sold by the carrier.

The pros and cons of a repair shop


No! We dropped our precious! Can we fixes it?

No! We dropped our precious! Can we fixes it?

Taking your phone to a third-party repair outfit is not unlike taking your car to a service shop that is not the dealer you purchased it from. Simple online searches can tell you who the good people are, and who to avoid. Taking that variable out of the picture for the moment, upon browsing through any notable repair service, the immediate advantage is cost.

Three of the more recognizable places to take a device in for a repair are uBreakiFix, CPR Cellphone Repair, and Batteries+Bulbs. Between the three, there are variations on how long their repairs are warranted, but the common denominator is many repairs are completed the same day, some while you wait. Moreover, these repair shops can provide onsite diagnostic assessments to actually determine what is wrong with your device – a handy option in lieu of 

That latter is the largest chain, and also has the most price estimates for various repairs published without the need to fill out forms or visit a store. Using the aforementioned iPhone 7 Plus example, and assuming a common issue like a broken screen, a repair at a service location like Batteries+Bulbs would cost about $250, $50 less than the co-pay for insurance through AT&T, but $50 more than through Verizon, not including premiums paid to-date.

Upon any casual browsing of these repair services, the more astute geek will notice phraseology like “top quality parts.” For someone that may seek a service that only uses original manufacturer components, that may pose an obstacle. However, national franchised outfits have no interest in using cheap components only to lose that savings through ongoing warranty repairs down the road. Where that concern turns into a benefit however, is that those who keep their devices for more than a year or two. Also, newer devices are not always eligible for repair due to parts availability. Finally, depending on where you live, there may not be a repair location within a reasonable distance. 

On the following pages, I went in-depth, comparing multiple options, across different generations of a few popular devices, and see how your money is spent – whether it is money well-spent is up to you.

Side-by-side cost comparisons


Through the course of normal events, two of the most common afflictions to our smartphones is a cracked screen, and a jacked-up charging port (often caused while dropping the device while a charging cable is plugged in). I picked the 256GB iPhone 7 Plus (because of the tiered deductibles on AT&T), 128GB iPhone 6sSamsung Galaxy S7Samsung Galaxy S6 edge, and compared out of pocket costs for a single claim at 3 months, 9 months, and 15 months using the published insurance rates as offered through AT&T and Verizon, next to the published repair rates on Batteries+Bulbs’ website. While the repair costs will remain constant through each interval example, I think is also serves as a reasonable reference which may help you decide when to possibly use or drop insurance, and go with a repair (or vice-versa).

I used AT&T’s Mobile Protection Pack, which costs $10.99 per-month and the comparable Verizon plan, called Total Mobile Protection, which costs $11.00 per month. The purchase prices or finance costs for the devices were not calculated because those are sunk costs. To its credit, Verizon does offer some onsite repairs, but only for certain devices, and with limited availability. 

About the insurance plans


On the face of it, AT&T’s and Verizon’s plans look the same. Both are managed by Asurion, though they are underwritten by different insurers. Also, while the monthly premiums are the same, the deductibles are not. AT&T’s initial deductible rates are a little higher, but they decrease dramatically if you go 6 months, then 12 months without a claim. The deductibles themselves are tiered based on the type and retail price of the device being insured. Naturally, flagship devices carry a higher deductible.

Fees/DeductiblesAT&T Mobile Protection PackVerizon Total Mobile Protection
Monthly Premium$10.99$11.00
Deductible range$12.00 to $299.00$49.00 to $199.00

While there is some value consideration for AT&T’s tiered deductibles, because they are based on the retail value of the phone and not the components that broke, a broken screen on a 128GB or 256GB iPhone 7 Plus carry different deductibles, even though an actual repair would cost the same. 

That said, the longer you go without a claim, AT&T’s deductibles decrease, whereas Verizon’s remain static. Over time, the out of pocket costs have significantly different cumulative effects. The insurance services offered through Sprint and T-Mobile are similar in scope in terms of costs, deductibles, and they too are also managed by Asurion. 

Screen repair/replace


When it comes to broken screens, if you must experience it, it is easier on the wallet if you just get it done with early. Outside of that, the point where insurance loses some of its value proposition arrives between 3 and 9 months. Not considering other factors, if the main driver for insurance is having a safety net for a broken screen, knowing if a repair shop is nearby can potentially save you a lot of money, especially if you own an iPhone.

Another interesting trend is that despite the tiered and declining deductible set-up for AT&T, the monthly premiums continue to push cumulative costs higher. Verizon's plan is the perfect example of how much money is spent over time if left unchecked. Insuring a device beyond 15 months certainly does not provide the best value.


Charge port repair/replace


I only prepared two graphs for the charge port because Batteries+Bulbs does not offer this service for the iPhone 7 Plus (but they do for the iPhone 7, $59.99), or the Galaxy S7. I called the local Batteries+Bulbs store and were told that they did not have the parts for iPhone 7 Plus – apparently the components are quite different. He estimated that when parts were available, a repair would cost between $70-80. When it came to the Galaxy S7, I decided to call the local competitor, uBreakiFix, their quote was a whopping $379.99. It was explained to me that when it came to the S7, the charge port required significant disassembly and would sometimes require replacement of the screen as well (that likely means repair costs for the Galaxy S8 down the road will be quite different than past models).


When neither repairs or insurance are warranted


My examination of costs was centered on variations of the two bestselling series of devices in the US. However, not everyone has an iPhone budget. How does this analysis stand up to mid/low-range, or older devices like the HTC Desire 626 or LG G Vista? These devices are not on most repair shops’ radar (including two out of the big three I noted earlier). Why is that? Because it is plainly not worth the time and money for all parties involved. 

It is possible to insure such devices, but how do those costs fare compared to just buying a replacement device (either new or used, through eBay, Swappa, or elsewhere)? It should not require a chart to bear that answer out, but I created one anyway because it shows how the smartphone market has scaled to a point where we can treat them the way we used to treat flip phones 15 years ago.

Mobile phone insurance versus repairs – how do costs add up?

Conclusion


When looking at the issue as a matter of dollars and cents, opting to go to a local repair location will often save you hundreds of dollars, depending on the issue you are having with your device. Where the repair option is weakest is when a device is brand new. Parts, whether from the manufacturer, or OEM-spec from a third party, take time to make and bring to market. That said, even devices that are approaching a year old in the product cycle are not always eligible for repair. So, depending on your budget, how clumsy you are, and type of device, it may make sense to have insurance for the short term.

For those that just “can’t be bothered,” insurance is a good option because it operates on the model of simply replacing the phone – file a claim, and wait for an express package to arrive. The process is simple, albeit hampered a bit by the need to set-up the replacement device with all you user data. Taken in that context, the mobile insurance plans work, at a cost.

Like many services, it is not just about cost or convenience, however. Speed of service is sometimes more important. When that is the case, it is hard to beat the local repair shop, they can diagnose and often repair while you wait. They are also locally owned franchise operations, so you are supporting a small business owner too.

The best part about this is that these scenarios do not force you to pick one option over the other. As devices become ever-more complex, it is perfectly reasonable for some to keep insurance against that dreaded moment of dropping their precious and causing serious damage. For a more minor malfunction or issue however, save the money from a deductible and see if a local store might be a better option. It’s good to have choices (and cases).

references: AT&TVerizon WirelessBatteries+Bulbs

23 Comments
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posted on 05 Apr 2017, 15:39 4

1. Unordinary (unregistered)


Monthly payments for insurance AND THEN a deductible if you break your phone, biggest waste of f**king money.

New Samsung S8? No problem. $8 a month.
Haven't broke it in 2 years? That'll still be 200 wasted dollars.

Broke it after 2 years? No worries! That'll be all your monthly payments that you've been giving us plus your deductible. $400 please :)!

With iPhones and Galaxy's and Notes costing $1000, that's $1500 practically out of pocket. I'll stick with Apple Care.

posted on 05 Apr 2017, 15:48 1

3. sgodsell (Posts: 4505; Member since: 16 Mar 2013)


You go on about payments and insurance being a waste of money. Yet your willing to pay for your high priced Apple card up front. Go figure.

If you were smart, then you would buy an expensive case for your smartphones, and you would save a lot of money as well. Besides the iPhone's and Galaxy's and Notes are all water resistant these days.

posted on 05 Apr 2017, 17:23 1

8. RebelwithoutaClue (Posts: 3333; Member since: 05 Apr 2013)


With a fee of 129 bucks for Apple Care and a 79 dollar fee for replacing an iPhone screen (with a maximum of 2 incidents during those 2 years). That is still pretty expensive. On average an insurance that covers all repairs for an S7 Edge is around 4.50 a month over here.

posted on 05 Apr 2017, 18:15 1

9. TechieXP1969 (Posts: 13413; Member since: 25 Sep 2013)


Your argument is dumb. You pay car and home insurance and you still have a deductible whenever you use it and both cost way more.

Unlike what the writers says. Even though ATT lower cost of deductible over time, no one will keep a phone longer enough to benefit from it.

At VZW since I have gone several years and never made claims, when I had one, Customer Care have replaced my device with a new of same model of available or an alternative I store with me google my through insurance. I did it with both my Note 3 and S6 edge+.

All you have to do is ask. In my case with the Nite, there was a known issue where the phone refused to charge with its own charger, but work with another. I told them I have 5 lines and have had such since 1996, either replace my device here or I pull them all.

With my S6 edge I simply asked I store to the manager. He said at first I will give a refurb. I told him, after paying $120 for 3 years on 5 devices, I've paid for new device. Replace it!

Most customers never ask for such breaks I do.

AppleCare may be cheaper. But for how easy it is to damage iPhone, overall they simply are more expensive to repair via a 3rd party.

The display on the iPhone is a high fail point. It's only being held by 2 screws. Most drop have lead to the display coming apart from the case at the corners. There are tons of them on sale on eBay.

The metal and glass phones are a windfall of cash for carriers and insurance companies.

Apple purposely sold the iPhone 6 knowing it easily bent and right after the iPhone 6 was released,starred a replacement option which cost $50 the device cost. That wasn't a coincidence.

All I can say is get a good case, get a full 9H screen protector for your phone and be careful with them.

All insurance is a scam

posted on 05 Apr 2017, 23:45

12. Leo_MC (Posts: 2288; Member since: 02 Dec 2011)


One doesn't waste money on insurance, one invests in one piece of mind.

posted on 05 Apr 2017, 23:47 2

13. Leo_MC (Posts: 2288; Member since: 02 Dec 2011)


Stop talking stupid.
iPhone 7 is well built phone, it is tougher than Samsung S8.

posted on 06 Apr 2017, 02:57

14. sgtdisturbed47 (Posts: 803; Member since: 02 Feb 2012)


"I told them I have 5 lines and have had such since 1996, either replace my device here or I pull them all." It's people like you that make people spit in customers food. Oh, and since we're on the topic of how much of a badass you are, why are you referring to "9H" tempered glass when no such tempered glass exists? You should have done your research on that, but I'll be kind and point you in the right direction:http://www.moutfitters.com/blog/true-hardness-tempered-glass-screen-protector/

posted on 08 Apr 2017, 07:59

18. bossmt_2 (Posts: 454; Member since: 13 Oct 2009)


Apple Care is a better deal for damage. There's no denying that. It's much cheaper to fix a phone on AppleCare than with insurance. Same with Google's protection. I'm not familiar with non-Verizon insurance so I won't talk about it. The reason to get insurance is if you're really hard on phones. Instead of getting 2 claims per 2 years, you could get 3 or 4 as you get 2 claims per calendar year. Though the contingent on 4 is you break yourphone as you walk out the door. The reason I have insurance is what isn't covered by Apple or Google's or squaretrade protection, lost or stolen.

There's one other huge perk for me, I live out in almost the middle of nowhere, Asurion charges me my deductible and I get my phone next business day typically. Sure it sucks that it costs so much, but it's worth it. Doing the same through Apple or Google could take days or in APple's case a very long car ride (about 5 hours total)

posted on 09 Apr 2017, 23:55

19. corvette72778 (Posts: 107; Member since: 25 Feb 2012)


A case doesn't have to be expensive to protect your phone. I buy cheap $6 TPU cases and I've never had a phone break with one.

posted on 05 Apr 2017, 15:43 2

2. sgodsell (Posts: 4505; Member since: 16 Mar 2013)


It comes down to how you initially spent on a smartphone. Anything under $400 is not worth the insurance, period! Most smartphones are too hard to repair yourself nowadays.

If they are high priced smartphones, then the cheapest insurance is to buy a really great protective case. Many expensive cases will even have some type of insurance or guarantee for your device. So most insurance on smartphones is a complete waste.

posted on 05 Apr 2017, 16:10

5. 14545 (Posts: 1667; Member since: 22 Nov 2011)


None of it is worth the insurance. Buy a cheap case and don't be dumb. As long as you do that, you won't need the insurance. Even if you do, the return is only 3 years to break even if you ever break device. If you are breaking things more than every 3 years, maybe you shouldn't be buying a new device anyway.

posted on 05 Apr 2017, 20:26 1

11. mixedfish (Posts: 1309; Member since: 17 Nov 2013)


Buying a case has to be the single most dumb advice. Why do people even pay premium prices for a phone with premium design and materials at cutting edge thinness only to cheapen it all with some rubber and ugly color.

You buy an expensive phone to enjoy, not to stress out about costs and fragility. Otherwise buy some crap brick for $100 and chuck it out when it's broke.

Putting a case for a phone is like those old people that put plastic covers on their couches.

posted on 05 Apr 2017, 16:05 2

4. Cat97 (Posts: 184; Member since: 02 Mar 2017)


Conclusion: use a case, use a screen protector and use a phone for which good screen protectors exist. It's the cheapest insurance option.

posted on 05 Apr 2017, 18:19

10. TechieXP1969 (Posts: 13413; Member since: 25 Sep 2013)


All phones have good cases and screen protectors. Being lazy an not looking is not anyone's fault.

Next you all begged scream and b%€*hed for metal and glass phones. Now you all wanna whine b/-(h and complain about the cost to replace one when they break.

Lol

This is what you asked for. You all wanted premium feeling less resilient easy to break materials.

You deserve to pay whatever it costs to repair them.

posted on 06 Apr 2017, 03:35

15. Cat97 (Posts: 184; Member since: 02 Mar 2017)


The S7 Edge and the likes with curved screens do not have good screen protectors. All are useless and waste of money, nerves and time.

posted on 05 Apr 2017, 16:29

6. lJesseCusterl (Posts: 36; Member since: 27 Apr 2015)


Depends on the phone, really. Any non-AMOLED screen is usually cheap, or will be a few months after the phone releases. Samsung Edge parts prices are uniformly terrifying.

posted on 05 Apr 2017, 17:17 1

7. L0n3n1nja (Posts: 220; Member since: 12 Jul 2016)


All comments I've seen so far ignore lost/stolen, I personally don't carry insurance but having worked at Verizon over 3 years I've had back up phones.

Most insurance claims I was involved with, was a lost or stolen device. It's ridiculous how many phones end up down an ice fishing hole or off the side of a boat. Haha

posted on 10 Apr 2017, 14:30

20. tacarat (Posts: 801; Member since: 22 Apr 2013)


This. Repair shops don't cover lost or stolen phones. Insurance doesn't give you a chance to retrieve lost data (do your backups!).

As far as the declining deductibles not mattering because nobody keeps a phone long enough, it's good to know that it's based off the line, not the physical phone. If you keep the a device ok long enough and replace the phone, the new phone will have the lower deductible too. It doesn't reset with a device change.

posted on 06 Apr 2017, 08:27

16. tokuzumi (Posts: 1140; Member since: 27 Aug 2009)


Haven't had phone insurance in 4 years. Yet to have an issue. I've maybe dropped my phone 2-3x in that time, and since it's always in a case, never been damaged. I have scratched a screen, but that's it.

posted on 07 Apr 2017, 17:36

17. Mixkhata1 (Posts: 129; Member since: 26 Feb 2017)


Get a good case, apply a screen protector, and be cautious when using it. This is what i've been doing my whole life and it worked every single time.

posted on 13 Apr 2017, 19:27

21. daflash34 (Posts: 4; Member since: 02 Dec 2012)


The guy Unordinary makes somewhat of a point but I think he may be a little off. Below is why I think there's no point to insurance if, 1) you have a very high end phone that you have been paying on for a while or, 2) you have a low end phone that may be cheaper to just buy a new one.

1) Get the insurance if you just purchased the latest and greatest phone but cancel it once you have paid off half the phones cost. At that point it may be cheaper to just buy the next newest thing if your current phone gets damaged because truth is by the time your phone is half paid off the next Iphone or Galaxy is being released.

2) Low-end phones only cost a couple hundred bucks so depending on the amount you pay for insurance monthly and the deductible you could have just bought a brand new low-end phone.

Ex. Purchased a new Iphone 7plus. You're paying $25-$33 per month plus $10 for insurance. At the halfway point (which is 1 year) you would have paid $300-$396 plus $120 for insurance bringing you to a total of $420-$516 thus far. Then BAM phone drop. Cracked screen, broken charge port, etc.. happens. Now you have to pay $300 just to get a new replacement phone. On top of that once you get the replacement you have to continue to pay the monthly cost of the phone which still is $25-$33 per month. So your total for your phone at the end of it all if your replace it once with insurance is $1140-1332 for a phone that costs $770 for a phone that will be 2 years old by the time its paid off. And in today's world that almost ancient tech if you like to stay up to date.

Advise - Get a good phone case. Ditch the insurance. Save yourself $240 at a minimum.

posted on 16 Apr 2017, 13:20

22. youlookfoolish (Posts: 176; Member since: 14 Dec 2012)


This opinion piece is incredibly short sighted and asinine!

Private repair isn't an option for lost and stolen devices! And the ultra vast majority of consumers FINANCE devices or even worse lease devices if you are unfortunate enough to have Sprint in the US. The consumer is on the hook for hundreds of dollars.

Verizon and AT&T have more than 30% of US wireless subscribers. Buy from their carrier stores or retailers like Best Buy? Like the ultra vast majority? Insurance is flat out a must have. In fact, I would be absolutely pissed if my consultant didn't just assume and put it on my account.

Anyone who buys an iPhone 7 or Galaxy S8 this month just must have it period because if that hot devices is lost, stolen, or damaged beyond the display, then the consumer is responsible for the $750 of the first device and then will need to turn around and get another device at $750! Consumers might as well just give a $1500 check to the carrier.

Repair is stupid and for a very minor group of people. In my nearby mall there are no less than 4 or 5 repair options for mobile devices and thank god every single one of them are ghost towns. I also imagine the insane fools who fill up Apple stores for the "Genius Bar" and force appointments to be made a week out.

Get insurance. MANAGE YOUR OWN ACCOUNT. Because US phone sales clearly show the ultra vast majority want a flagship device from a large carrier. Thank Apple and the Duopoly for the prices and policy if you are salty. But even T-Mobile customers fall under that same demographic.

Get insurance!!!!!!!!!

posted on 10 May 2017, 07:54

23. ericliu126 (Posts: 1; Member since: 10 May 2017)


I like DIY, no repair, no insurance.

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