Buying an iPhone means spending hundreds of dollars upfront and thousands of dollars over the course of your phone contract. With that much money going out, it might seem smart to also buy iPhone insurance to protect your investment. After all, insurance claims to totally cover you against theft, damage, and other mishaps for just a few dollars a month.When you dig into the details of what these insurance plans really offer, though, they stop looking like such a good deal. In fact, they start to look more like something that's going to upset you if you ever have to use it. Here are six reasons you shouldn't buy iPhone insurance and one suggestion for how to get extra protection for your iPhone if you want it.
Monthly Costs Add Up
Part of having iPhone insurance means paying a monthly fee, just like traditional insurance for your car or house. You may not notice the charge if it's included as part of your phone bill. A few more dollars each month usually isn't obvious. Still, these fees mean you're spending extra money every month. Plus, when you add it up, two years of insurance premiums from some of the most popular companies can total between US$130 and $215. Some companies offer flat fees—$99 for two years, for example—but, as will be explained later in this article, they're still not a great idea.
You're Still Going to Pay for Repairs
Just like with other types of insurance, when you make a claim, you also pay a deductible. This means you'll either have to pay this fee to get a repair or a replacement phone, or that money will be deducted from a cash settlement paid by the insurance company. Deductibles run between $25 and $200 per claim. This can be a good deal if your phone is totally ruined and you have to buy a new one at full price, but if you just need a repair, the deductible you pay may be a significant percentage of the cost of the repair.
Refurbished Phones Are Often Used
Of all the "gotchas" hidden in many iPhone insurance policies, this is one of the worst. If you need a new phone, even after paying your monthly fees and deductible for an incident, you may not get a totally new phone. In fact, when your insurance company replaces your broken phone with a working one, the replacement is often refurbished. The phones that insurance companies send are often phones that were sold used or broken. For your hundreds of dollars or premium and deductible, wouldn't you rather have a truly new phone?
Poor Customer Service
Nobody likes getting the runaround, but that's just what many iPhone insurance customers have reported. On this site and many others, readers have complained about rude employees, lost paperwork, delays in getting replacement phones, and more (over the years, no iPhone-related product category that we've reviewed has gotten lower scores from readers of this site than iPhone insurance). As a paying customer, good customer service should be a given.
Limits on the Number of Claims
This isn't true of all insurance plans, but some of them limit the number of claims you can make during your one- or two-year policy term. For instance, some iPhone insurance policies limit you to two claims in a two-year policy. Have the bad luck to have a phone stolen or break a third time in two years? Your insurance won't help you and you'll be stuck paying full price for a repair or a new phone.
No Tech Support
Insurance companies provide coverage for loss, theft, damage, and other calamities, but they can't help you with the day-to-day frustrations technology often presents to us. If you're having a software problem, or just have a question about how to use your phone, your insurance company can't help you. You'll need to find answers somewhere else, whether that's online or from an in-person option like Apple's Genius Bar.
Your Best Option: AppleCare
With so many reasons to avoid iPhone insurance, does that mean you're completely on your own in a world that's often hazardous to phones? Not at all. You should seek your help from the same source where you buy your phone: Apple.
Apple's extended warranty program, AppleCare, is a great option for people who want ongoing coverage for their phones. Not everyone will find it a good deal (if you upgrade every time you're able, or when a new phone comes out, it may not make sense for you), but for those who do, the benefits are many.
AppleCare has many of the features of insurance—there's an upfront fee that's about equal to the cheapest insurance plans and then costs per repair, as well as a limit of two repairs in two years—but it offers some benefits. First off, cracked screen replacements cost less than with most insurance plans. Second, AppleCare also covers phone and in-person tech support. While AppleCare doesn't cover theft, it has a number of benefits and gives you direct access to support from the experts at Apple.
The Bottom Line
Insurance or extended warranties aren't required purchases for all iPhone owners. You may already have a good idea about whether your phone might get broken or be stolen before you're ready to upgrade to a new phone. If you need the extra coverage, make sure you know all the details before you make your purchase or, when the time comes to use your insurance, you may be sorry.
