"Insurance (from the phone carrier) is not just covering you being a klutz and if the item stops working, but if you leave it in a cab and lose it. You pay a premium for it," Abernethy said. "Our data shows that very few incidents are related to loss and theft. So you're paying a big premium to cover the 4% that is lost or stolen. You basically cut the cost in half by buying insurance through SquareTrade."
Asurion's claims are quite different: 50% are due to loss or theft, 47% from damage and 3% malfunction. That could be because as the default insurer for most carriers, Asurion's numbers include all types of phones and unlike some alternative insurers, it offers loss and theft protection.
"As the insurer of more than 95 million consumers, Asurion has access to a large pool of data," Colombo said. "Given our broad set of coverage -- loss, theft, damage and out of warranty malfunction -- we are able to provide information across all of the major issues a customer may experience. As such, other companies may not have data on issues such as loss and theft."
The good news for consumers is that there is a much larger variety of choices today. You can opt for just damage coverage or full-service, pay by the year or month. The official insurance from the phone companies offer basic damage plans, starting at a few dollar a month. Alternative insurers like SquareTrade, GoCare and Assurant charge a one-time, upfront fee to cover just damage or more.You can also opt to have smartphones included on some homeowner policies or, if you own an iPhone, buy the extended Apple Care warranty to cover hardware damage. At minimum, say all experts, get a good case for added protection and use free apps to protect data or remotely find the missing smartphone. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.