When you purchase a new phone, most carriers will try to sell you an insurance plan that costs anywhere from $6 to $11 per month, and promises to repair or replace your phone should it be lost or stolen. But this phone insurance has more catches than Yogi Berra, including huge deductibles and the caveat that you may not get the same phone model as a replacement for the one you lost or broke.
For example, Asurion, the company that actually provides the insurance for all the major U.S. carriers, charges $11 per month to protect a Galaxy S III on Sprint with a $150 deductible. Let’s say your phone is stolen in month 18 of ownership. You’ll have spent $348 to replace a phone that Sprint sells unsubsidized for $549, and there’s a chance you won’t even get a Galaxy S III, because it won’t be made anymore.
Solution: Don’t buy phone insurance. The worst thing that could happen is that you lose your phone while you’re ineligible for a subsidized upgrade and must pay the full retail cost to replace it, a cost of $500 to $700 from most carriers. Fortunately, you can usually find a used or refurbished version of your phone online for significantly less.
However, if you buy insurance and don’t lose your phone, you end up paying hundreds for certain to protect against the possibility that you might have to spend an additional $300 in the unlikely event you lose or break your phone. Take the gamble that you won’t
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