Over the Weekend I had an “incident” where I dropped my new HTC Hero with Google.  Considering I am writing a post on Cell Phone insurance, you know all did not end well as I bobbled it and watched it land on its glass face.  My phone went from:

HTC-Hero-Sprint  TO Cracked HTC Hero

So for the first time since owning a cell phone I called up my cell phone insurance company, and it got me thinking is this cell phone insurance thing worth it?

The Convenience of Cell Phone Insurance

When I dropped it, I went to the computer to determine whether that was covered under my insurance plan.  I didn’t want to alert the insuring company that I broke it, and that wasn’t covered but “losing it” was covered.  The Cell Phone Insurance company’s website has a picture of a phone sitting in a mug of beer, so I guess I am not the only idiot out there!  When I found my agreement, it in fact covered almost everything, so I don’t know if it was a thing of the past when companies denied coverage.

Being that this was my first time ever using cell phone insurance, I decided to speak to a person rather than file a claim online.  The process took about 12 minutes and probably would have been quicker had I not asked a ton of questions.  In the end my new HTC Hero was being shipped to me over night (confirmation email indicates I should have by 3pm tomorrow, if you were worried).

In the past when I had lost or dropped my phone I scrambled to fight with my cell phone carrier to have them lock me in for another 2 years, or get on ebay looking for a good deal on a used phone.  It was very nice not having to do that.  But that came at a price.

Is the Cost of Cell Phone Insurance Worth it?

Like every insurance contract it comes down to numbers:

  • $7/month added on to my bill
  • $100 deductible
  • The Exact Phone, New, is about $300 on ebay; The exact phone, used is about $225 on ebay

Logically there seems to be a turning point when your replacement phone (through e-bay, Craig’s list, etc.) is at or near the price of your deductible.  It is inevitable, there will be a time when my bad ass phone is the free garbage phone that the phone companies push on people, and at that point the secondary market is flooded with phones that people are trying to recoup some sort of cost on.  For instance that “amazing” sprint palm pre which was going to be the iphone killer, that originally sold for $399 can be found for under $200 used on ebay.  It happens, it is inevitable and it sucks!

Notwithstanding my anger for the cell phone business model, there comes a point where the $7/month and $100 deductible just doesn’t become worth it anymore.  I have no idea when that will be, because I don’t know when “the next” phone will come out forcing early adopters to flood the secondary market with phones.

So, Yes, I think Cell phone Insurance is Worth it as long as the Secondary Market for your phone still is high.

Do you own cell phone insurance? Do you think my breakdown is wrong? Am I an idiot for having a relatively expensive phone?