Cell Phone Insurance - Here’s What You Need To Know

Here’s an all-too-common situation: You’re finishing up happy hour with a friend, and call an Uber home. It arrives much earlier than you thought, so you scramble your stuff together and jump in the car. When you’re all settled in your seat, you reach to grab your phone, and realize it isn’t in your bag.

In panic mode, you sign into Find my iPhone, only to find your precious phone is already halfway across the city. “It must have fallen out of my bag on my way to the car, and someone picked it up,” you realize.

Will you have to shell out $800 for a replacement phone? Well, that depends on whether you have phone insurance, and what kind you have.

Getting coverage for your cell phone is probably one of the last things you want to deal with—because phone theft happens to everyone else except for you, right? But it only takes one snatch to make you wish you had the right coverage.

Considering whether to get cell phone insurance raises tons of questions. Is it worth getting phone insurance for things like screen cracks? What about water damage? And which plan is right for you?

We’re here to answer your biggest questions around phone insurance.

What is phone insurance and what does it cover?

Phone insurance can take a number of forms—either as a standalone policy or as part of your renters or homeowners insurance (more on that below). Broadly speaking, phone insurance covers damaged, stolen, or lost phones—but what’s covered and what isn’t will depend on the type of policy you have.

Does renters or homeowners insurance cover phones?

Most people don’t realize this, but renters and homeowners insurance do cover your phone in certain specific circumstances. These insurance policies generally automatically cover your phone (and other stuff) for things like theft, vandalism, fire, and other damages (‘perils,’ in insurance speak). You generally won’t be covered for accidental damage or just because you misplaced and lost your phone, though.

But if a thief snatches your new phone was snatched while you’re dancing at a concert, or pickpockets you while you’re traveling abroad, your home or renters insurance will generally cover you.

When Lemonader Phil W. was traveling in Italy, his phone, backpack, and camera equipment were stolen from the trunk of his car:

“The lock on the car was popped, and everything was stolen- including all of the footage from my trip. My travel insurance denied the claim, but my Lemonade renters insurance came through and reimbursed me for everything that was lost, including my phone.”

But understanding when your home or renters insurance kicks in, and when what’s called ‘mobile phone insurance’ would, is crucial.

What’s the difference between mobile phone insurance and renters insurance?

In addition to any coverage you’d have from your homeowners or renters insurance, there are specific, third-party plans that are just meant to cover your phone. The standalone plans might be available through your phone’s retailer (like Apple), while others are purchased via your carrier (AT&T, Verizon, etc.)

There are a few consistent differences between these specific phone protection plans and how your renters or homeowners policy would cover your cell phone.

First off, nearly all of these plans available from your carrier or retailer would cover accidental damage (such as cracked screens or liquid damage), while renters insurance does not.

On the other hand, retailers (such as AppleCare+) don’t provide insurance for phone theft in their base plan, while renters or homeowners insurance policies would protect you if your iPhone or Android is stolen.

That said, some retailer- or carrier-provided insurance plans might protect your phone against accidental loss or theft. Make sure you ask for the details of your specific policy.

What else is covered by phone insurance?

Insurance provided by your cell phone carrier or manufacturer can also provide coverage for other devices as well. That’s why, in the biz, this coverage is often called “Phone & Device Insurance”.

Other gadgets that you can potentially get coverage on include:

• Laptops/desktop computers
• iPads, tablets, and e-readers (like Kindles)
• iPods and MP3 players
• Gaming consoles
• Cameras

If you’re looking to get more coverage on your gadgets, you can also look into purchasing a scheduled personal property endorsement (called Extra Coverage here at Lemonade) through your renters or homeowners insurance policy.

What does phone insurance cost?

Renters insurance is typically more affordable than phone protection plans offered by retailers or carriers. While the price of Lemonade renters insurance start at $5/mo, mobile carrier insurance starts at $9/mo, and retailer-provided insurance starts at $11/mo. That said, to protect yourself against many possible phone-related accidents and snafus, you might want to carry both types of insurance.

Here are a few other key differences to consider:

• Renters insurance typically has a $250 deductible while other phone insurance plans have lower options. The deductible amount is what you’d have to pay out-of-pocket before your insurance kicks in.
• Most carriers and retailers require you to buy a plan within a set amount of time (usually 30 days) after buying your phone
• While renters insurance policies do not limit the # of claims you can make per year, plans from your carrier or a retailer typically limit you to 2-3 claims per year
• Renters insurance covers all of your stuff (bike, laptop, headphones, etc), while carrier and retailer plans focus solely on phones

Which phone insurance plan is worth getting?

Choosing a plan really depends on your lifestyle, habits, and how much you could pay upfront if you needed to get a replacement phone. Again, if you tend to have bad luck when it comes to your phone, you might want to have both renters or homeowners insurance and a phone-specific insurance policy from your carrier or retailer. It’s up to you.

Different loss or damage types have different costs, and replacing a stolen smartphone is much more costly than fixing a smartphone screen.

So as you decide which plan is right for you, ask yourself these questions:

• How much $ would you be able to shell out if something happened to your phone that wasn’t covered by your plan – $50? $100? $250? $600?
• Are you more likely to have klutz-y moments (ie spilling water on your phone), forgetful ones (ie leaving your on a coffee shop table, only to have it stolen), or both?
• Are you looking to protect all of your stuff, or just your phone?

Bottom line: If you’d like to cover all of your stuff, including your phone, at a lower price, renters insurance is the way to go. But, if you’d like to protect just your phone against multiple incidences of accidental damage (ie cracked screen), adding on additional coverage through your phone carrier makes the most sense.

Phone insurance vs. phone warranty

In addition to renters insurance and specific device protection plans offered by your carrier or retailer, most manufacturers also provide a phone warranty that covers mechanical or electrical problems with your phone. 

If you buy a new smartphone with a two-year warranty, only to see it go kaput in six months through no fault of your own, you have the right to demand that your phone be repaired, replaced, or refunded. 

An extended warranty is, well, just what it sounds like. To extend the warranty on your mobile device, you’ll want to check with your provider about the terms and conditions for applying.

Needless to say, a phone warranty isn’t the same thing as cell phone insurance. As we mentioned, your renters insurance company will cover your phone in the event of a covered peril like theft, a fire, and other damages. By contrast, your phone warranty covers only mechanical or electrical defects. It won’t cover a stolen smartphone, however⁠—that’s where insurance comes in.

How do I insure my phone with renters insurance?

If you decide to protect your phone (and the rest of your stuff) with renters insurance, getting a policy with Lemonade is easy!

All you need to do is get a basic insurance policy, which takes less than 2 minutes: Download the Lemonade app, answer a few questions about your home, and get insured in seconds.

To make sure you’re getting enough coverage for your phone (and everything else), double check your ‘personal property coverage’ (insurance speak for coverage for your stuff) is sufficient. Otherwise, you could be left high and dry when disaster strikes.

Here’s how to estimate the value of your stuff:

1. Take 2 minutes, walk around your apartment, and take a video (or pics) of everything you care about

2. Make a list of the stuff of everything you just filmed/snapped and estimate how much each item costs

– If you have receipts, keep a pic in case you ever have to replace the stuff under warranty or have to make a claim

– For electronics and more expensive items, it’s important to know the make and model as well as when and where you bought them

3. For shoes, non-electronic kitchen items, and other stuff in bulk, just estimate what it would cost all together

4. Add this up and voilà, that’s the value of your stuff (i.e. how much personal property coverage you’ll need)

Best practice is rounding up to the nearest $10K. So if your laptop ($1,250), phone ($1,000), bike ($1,000), furniture ($5,000), and clothing ($7,000) add up to $15,250, you’ll want to get at least $20k in personal property coverage.

Insure your phone in a jiffy

Phones are expensive, and after shelling out serious $$ for your sidekick, the last thing you’ll want to do is replace it if things go sour. As Lemonader Phil told us:

“When my phone and other gear was stolen, Lemonade came through with a fantastic human-driven service process, and the claim was resolved in 48 hours. That’s why I’ll always have renters insurance through Lemonade.”

Take Lemonade for a spin – it’ll take you less than 2 minutes.

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