This is what most people tend to miss reading in the contract when they sign up for cell phone insurance. The deductible fee. Aside from the monthly premiums, you need to pay this charge when you file a valid complaint. Cell phone insurance companies charge around $50 as deductible, but it can vary depending on the cost of the replacement.
2. Replacement phone is refurbished, not brand new
Those who think that replacements are brand new cell phones – think again. A replacement cell phone is a refurbished unit, which is saying it is simply “reconditioned” and not brand new. Some of them were even broken before the cell phone insurance company acquired them and fixed them back to semi-working condition. So don't take it too literally when a cell phone insurance company says, “a replacement is just a call away”. Probably the replacement units aren't as generous as you'd hoped.
3. Peripherals don't fit
Sometimes, when the cell phone insurance company can't find a replacement that is the exact same model as your phone, they'll send you a different model. Now if you had peripherals for your old unit, chances are you won't be able to use them on your new—or refurbished—cell phone. So all the money spent on those items can now fly out the window. Add up all that money plus the deductible charge, and you'll easily come up with enough for a new—and by this we mean brand new—cell phone.
4. Replacement phone of less value than deductible
Believe it or not, some cell phone insurance companies send back replacement units that are much less than the cost of deductible and premiums put together – sometimes even less than the deductible alone. As many as 15,000 people in the US have complained about this since 2004. Sometimes they got refurbished cell phones worth $44 to $47 when the deductible was $50.
5. You won't need insurance anyway
Simply put, you won't need insurance when you don't lose your cell phone. By the end of the year, you get an extra $60, or $120 in two years, $180 in three years, etc.
So you still think you need cell phone insurance? Take your time and think it through.
