Before you sign up, the cell phone insurance company representative probably tells you they'll be charging you $4.00 a month plus a “small deductible fee” once you file an insurance claim. Thing is, this “small deductible fee” can easily translate from $50 to $120. That's a big difference!
So buyers beware.
Don't eat more than you can chew
The deductible is how the cell phone insurance company manages to pay for a replacement cell phone. Of course you pay monthly premiums. But sometimes these payments aren't enough to cover the cost of a replacement. So the cell phone insurance company charges the client a deductible fee—the amount which depends on how expensive the cell phone is—to help with the replacement expenses, even if just by a bit.
Most cell phone insurance companies set their deductible fee at $50. But sometimes this goes up depending on the market price of the cell phone to be replaced. Say you lost an iPhone—you don't expect the insurance company to find you a replacement with just $50, do you?
It's a good idea (and probably the best one as long cell phone insurances are concerned) to be clear with the representative just how much deductible you're looking at from the beginning. Take that amount and add it up with the monthly premiums. Knowing how much your cell phone costs, you should get a good picture of how long it'd take before you actually start saving money with the insurance. If it takes too long—say, 2 to 3 years—then you might as well quit the insurance idea altogether.
Start your own savings
This a good tip on how to start your own savings.
After you get a new cell phone, what you should do, is take $50 or $70 and put it away in your desk drawer. Imagine this as your deductible, except that you get to keep it at an accessible place. Now simply add $5 or $6 to it every month, and after a couple months you'll have enough money to buy a replacement exactly like your cell phone. Of course you don't go out and buy a replacement phone right away, but it's nice to know that you have money put aside just in case, enough to buy a brand new cell phone and not a refurbished one.
Again, buyer's beware. Verify how much deductible you're looking at. You might as well save the money yourself if you think the insurance is too expensive. These are just precautionary measures anyway just in case you lose your cell phone. If you're positive you won't lose your cell phone, you don't need the insurance.
