iPhone Insurance Arrives, But It Ain’t Cheap

By Joel Schectman, AP Business Writer

NEW YORK (AP) — Absent-minded iPhone users can now insure their devices against loss or accidents. But with a $12 monthly fee and a $199 deductible for the latest model, it might make more sense to just learn to be careful.

Asurion, an insurer of consumer-electronics products, has started a new policy that will cover iPhones that are lost or stolen, or get damaged whether dropped on the ground or into a pitcher of beer. Cracked screens, a common iPhone mishap, will be replaced, even if the phone otherwise works.

It's the only insurance plan for the iPhone authorized by AT&T Inc., the exclusive wireless carrier in the United States for Apple Inc.'s popular smart phone.

Replacing a phone can be costly. Although the iPhone 4 costs $199 or $299 with a two-year contract with AT&T, customers would need to pay the full retail price of $599 or $699 to replace a phone in the middle of the contract.

Repairs aren't cheap, either. Tekserve, an Apple retailer and repair shop in New York, charges $149 to replace a cracked screen and $99 for a broken microphone or charging port. (Apple didn't responded to repeated inquiries on repair service charges at the company's stores.)

Nonetheless, the value of the new insurance product is questionable.

"These policies aren't worth it," said Mike Gikas, senior editor of Consumer Reports magazine. "You are paying more than the phone is actually worth if you lose it later in the contract."

Gikas said that the best option is to buy a used phone from a website such as eBay, or get an older one from a friend, until the contract is up. He said the overwhelming majority of users do not lose or break their phones, making the premium prices far too high.

Consider this: The plan costs $12 per month, and to get a replacement, a customer must also pay a $199 deductible for the iPhone 4 (The deductible is $50 or $100 less for some older iPhone models).

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