Excerpt from article:
“For most consumers, it’s not worth the money,” said David Kolata, executive director of the nonprofit Citizens Utility Board. “It only potentially makes sense if you have a very, very expensive phone, but if you’re like most consumers, it’s not really a great deal.”
Why? Well, for one thing, it’s not cheap. In a review of thousands of consumers’ cell phone bills, Kolata’s agency found that roughly half of the customers purchased cell phone insurance, at an average cost of $5.64 a month.
Over the course of a year, that adds up. In some cases, you’ll be required to sign a two-year deal. By the time you’re done, you’ve paid more than $130 in insurance premiums. Most phones don’t cost that much new.
Even if you purchase a more expensive phone, there are other considerations. Linda Criddle, president of the Safe Internet Alliance, says consumers should check their phones’ warranties. If damages are covered for the first year, why buy insurance?
“It’s risk versus actuality and the cost of replacement, but make sure you know what the insurance would cover and what your warranty covers,” Criddle said. “Look at the delta between those two.”
If you decide to buy an insurance plan, read the description carefully. In most cases, cell phone insurers will not cover damage caused by water or other types of accidents, such as dropping the phone. “An alarming number of phones end up in toilets,” Criddle said.
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