The ins and outs of wireless phone insurance

At one point or another, we've all experienced the horrific conjoining events that lead up to an inevitable scene where a handset is either broken to a hundred pieces or simply lost forever in the deep murky waters of a river. There are plenty of things that begin to go through your head about the what-ifs, but needless to say, the pain of losing a smartphone could be lessened by simply knowing you're protected with some kind of insurance. Even though it's not necessarily priority number one in our minds during happier times shopping for a new phone, but it's surely something that can haunt some who disregard it altogether. Naturally, there is an associated cost in having insurance added to your monthly bill – but not all are fully aware of its actual coverage. From various sources, we've all read about the positives and negatives that come along with it, but we'll go into some specifics to give you a better understanding of how it just might, or might not, benefit you in the greater scheme of things.

The warranty

Since most people are elated with anticipation while buying a phone at a store, they might not think about wireless insurance as much at the moment. First and foremost, all new handsets purchased come with a 1-year manufacturer warranty that covers a wide range of customary items. These types of things include coverage against manufacturer defects with the phone and most of the accessories packaged with it. So even if you decide to not add insurance to your brand spanking new phone, you can still sleep well knowing you're covered for a year without paying more out of your pocket. For example, if your handset stops taking a charge due to a faulty microUSB port, it'll be covered under the manufacturer's warranty – no cost to you!

However, there are limitations to what some manufacturers consider as a defect that some consumers might not fully comprehend. In another example, we might not find any fault with using a phone while it's raining very lightly outside, but there can be some detrimental effects that can occur from it without our knowledge – like a short circuit of some sort. So even though you might not have known exactly that your handset was exposed to water, you're probably going to be surprised to be denied from getting a replacement under the manufacturer's warranty. Naturally, other things that aren't covered are items like physical/intentional damage, cracked screens, user modification, and even infestation of some sort.

When does insurance come into play?

In those situations where defects aren't a concern, like losing your phone or accidentally breaking it, wireless phone insurance is definitely appreciated by some who fully understand the ins and outs of the process. So even if you accidentally drop your phone onto the hard pavement, as you cringe upon impact, the feelings can quickly subside knowing that you're covered. On top of paying those monthly fees, which is normally required by companies like Asurion, there is a deductible that's required upon making a claim. When you do the math for an $8/month insurance policy on your account, you'll find that you're essentially paying $192 over the course of two years of ownership – and that's not including the minimum $50 deductible if you happen to actually use it. For some policies, there are higher monthly fees and deductibles associated with smartphones.

In fact, it seems almost completely worthless to go with insurance if the phone you're buying is priced for free with a contract. Take for example buying an entry-level flip phone for free with a contract, which would probably cost around $200 buying it outright, you would essentially pay more in getting it replaced through insurance. However, it becomes extremely valuable for those who happen to make more than one claim during the two years stuck with the phone – which is generally 2 claims per year at the most. Granted that you'll be required to dish out that deductible cost for each claim, it's probably still better than buying two phones full price. Additionally, the handset is covered for any defects, even after the first year is over, as long as you pay for insurance each month. So what does that mean? Well, you get a phone replaced at the 1 ½ year mark for something like a faulty display not powering on properly without having to pay anything – since it's covered under your insurance policy.

Things drastically change when it comes down to pricey smartphones that range from $100 and up with 2-year contracts. As we mentioned, they normally require higher monthly fees and deductibles, but it surely beats having to pay at least $400 for a replacement. Let's say that the monthly cost is $8 for insurance with an $89 deductible – that basically tallies in at $281 if you happen to make a claim at month 24.

And just to be clear on when deductibles are charged, it only applies to situations when you deal with insurance companies, like Asurion, directly. So if you call them up or go online and fill out their claim form and state that you dropped or lost your phone, they'll charge you the deductible fee to get it replaced. However, if you go to a location that deals with insurance and warranty work, but only have issues relating to a defect of some sort, you won't be charged for a replacement or repair – even if you have insurance on your phone.

When it comes to making the most out of your insurance policy, you have to keep in mind some strategies that store technicians or employees utilize in trying to best aid your problems. In some cases, they might try to convince you to move up to a newer handset because your line qualifies for an upgrade. So instead of having to pay full price for a replacement, they'll tell you that you can use your upgrade to purchase a new phone and ditch your broken one.

Now instead of making an impulse decision, you might want to hold off and use your insurance to get a replacement model as opposed to using your upgrade to get a new phone. But once you've received your handset, which is generally mailed within one business day, you can head right back to a store and use your upgrade on a handset you've been eying. In essence, you'll have a fully functional replacement phone thanks to insurance and a new one by using your upgrade – so it's a win-win situation for you.

Replacements

Of course, there is yet another dilemma to overcome when making a claim – the battle between what kind of replacement you'll get. Some would assume that you pay the deductible and get a brand new phone still inside of its retail packaging, but the case is not so. In reality, you're probably going to get some sort of re-manufactured, rebuilt, refurbished, certified like new, or whatever you want to call it replacement. Yeah, not everyone will be pleased to find that they might be getting a problem phone that was repaired, but that's the nature of the business with insurance. However, there are some instances where you might luck out and receive a brand new device that's comparable to what you have. Still, you can always resort to sweet talking yourself, or as we'd like to call aggressive negotiations, in obtaining a brand new device as opposed to something that's been used.

Now if you happen to purchase your device from an authorized reseller, like Best Buy or some other retailer, they have their own extended warranty plans that have their own unique stipulations. Rather than being charged through your monthly cell phone bill, it's generally charged to a credit card account that's filed during the purchase of your phone. But in the event you'll need to get a phone repaired, you'll probably be shocked to find that it requires a lengthy wait time. In most instances, not all, the retailer will more than likely ship out your phone to a repair vendor to get your handset fixed.

From what we've heard, the turn around time for something like this can range from a matter of a few days to a few weeks. Additionally, they might end up just shipping you back a refurbished phone, as opposed to your original one, in the event that the repair costs exceed the value of the handset. And in some very rare circumstances, it's possible to get a phone replaced on the spot with a brand new one from their existing stock – but don't count on that to happen the first time.

Similarly, you might even qualify to get the newer model of your phone if it happens to meet certain criteria – like some kind of lemon policy. From stories we've heard, it's possible to even get a handset replaced for a newer model under the manufacturer's warranty. Let's say that you keep on experiencing the same issue with each replacement model you're given under the manufacturer's warranty, it's possible to be upgraded to the next model up without paying for a single cent. So in theory, a customer who experiences multiple issues with each of their Motorola DROID replacements, they can possibly be treated to being upgraded to the DROID 2 without any cost on their end. But then again, it's not a given and is a case by case situation with each manufacturer and carrier.

Yet another interesting thing about insurance we found through various experiences is that it'll still be carried on if you happen to switch devices. Even though it's a quirk and might not expressively happen with each carrier, we have seen people able to activate various handsets, even much older ones, while still retaining insurance on their account. Furthermore, they're even able to get them replaced for a newer model because of some kind of manufacturing defect with them. For example, someone recently managed to get their hands on a Motorola Q and activated on their account which has insurance. Despite being a 4 year old model, they are still able to get it replaced through insurance because of a small crack in the screen. Regardless, it goes to show that insurance can swing both ways by giving power to the customer and the insurance company.

So...

Those first 30 days with a new phone are crucial in gauging whether or not insurance is correct for your lifestyle and how you handle phones in general. As we've seen, there are circumstances that blatantly point out to situations where insurance might not be too much of concern. Conversely, it can prove to be a complementing add-on to your monthly bill if you can fully absorb all of the details and specifics of what it covers. Although warranty and insurance processes aren't uniformed between manufacturers and wireless carriers, you'll always need to know that there is going to be some sort of monthly charge and deductible associated with them. So when that 29th day of ownership arrives, you'd better think quick on your feat if you want to add on insurance before it's too late.