Whenever people decide to purchase a new mobile device, the retailer asks if they would like insurance. Many people have decided to get it because they have experienced the devastating of having their phone break and then having to pay the hundred or couple hundred dollars to repair it. Is insurance the best solution, though?
Insurance for mobile devices often comes with a monthly premium. Each month you may pay $10 or $20 depending on the insurance you decide on for the device. This premium ensures you have the insurance. If something were to happen to your device, you will need to pay a deductive. This deductible can be $50 to $150+. This is on top of the monthly premium you’ve already been paying.
So if you calculate your cost for a repair after a year’s use of your device…
Let’s say $10 per month for 12 months, which is $120 and then if you have to pay $100 for the deductible, you end up really paying $220 for the repair.
Since most repairs are around that much, you really aren’t saving any money at all. Actually, you may be spending more money if the repair doesn’t cost $220.
Yes, it feels better because you are only paying $10 a month. It hurts only a little to pay $100 when the device breaks vs. the $200. However, if you think long term and what you’re really saving, insurance is really not worth the investment.
Taking It One Step Farther
While there are not many people who never drop their phone, there are some. These people are usually super careful and because they are careful with most things in life, they end up getting insurance for “just in case.” Well, these people end up wasting the most money. They don’t end up needing a repair and in two years, they have already wasted $240. Basically, they have paid for a repair even without breaking their phone. Again, insurance isn’t always the best option.
Take some time to really figure out the cost of insurance to see if it’s worth it for you. In most cases, it’s really not worth it at all.