When you are shopping for an iPhone, it seems like the sales people are more interested in selling you the iPhone insurance than the actual iPhone. When you go into a cell phone store like AT&T, Sprint, T-mobile or Verizon, they all offer iPhone insurance.
Also, stores like Best Buy push insurance for your iPhone all day long...and in media, such as radio, you hear ads for iPhone insurance every day from companies like Squaretrade.
If you get an iPhone today and then it is destroyed or lost tomorrow, it will cost you between $600 and $800 to replace it...let's say $700 on average. According to the iPhone insurance comparison we did, iPhone insurance is about $8/month. In addition, there is a deductible of $50 to $100.00. So, let's say $75.00 on average deductible.
So, your question is: Should I get iPhone insurance? Here are some things to consider before running out and spending money on iPhone insurance:
iPhone Insurance Math
Let's start out with the actual cost. As stated above, iPhone insurance is about $8/month. Thus, you pay $96/year for insurance on something that you can replace for $700.00. This means that you are paying 13.7% of the total value of your iPhone every year. Furthermore, don't forget about the deductible of $75.00 which is 10+ percent of value.
Now, compare these percentages to other insurance you may have. If you own a home that is worth $250,000 and are willing to pay 13.7% yearly insurance on it, it would cost you $34,250/year or $2854/month. Plus expect a $25,000 deductible payment if something happens. If you have a $30,000 car, 13.7% insurance would be $4,110.00/year or $342/month with a $3,000 deductible.
iPhone comes with one year limited warranty. Last time we checked the Apple website, it stated that "every iPhone comes with one year of hardware repair coverage". It may not be necessary to buy insurance if you are afraid it will break, because you are already covered.
iPhone Replacement Cost
Price of replacing old iPhone goes down every day. Unless you lose your iPhone right after purchase, chances are your iPhone will be worth a lot less down the road as new models come out. Just compare iPhone 4 to iPhone 5 prices. The total price of what you paid in insurance plus the deductible may actually be more than simply buying a new phone.
Will you really need or want your iPhone replaced a year and half from now? Your contract will be expiring and you will soon be eligible for a NEW affordable iPhone with a new contract! While waiting for your contract to expire, you could just buy a used cheap phone to keep you covered in the interim.
Anyway, some may argue that iPhone insurance is very expensive and not worth it (see above). We just listed some things to consider. You should make your decision based on your aversion to risk and cost, and take your financial situation into consideration. Good Luck.
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