How to save money on cell phone insurance
Cody Hebden is a 23-year-old college graduate currently working as an insurance underwriter in Central Michigan. These are his words…
What if I told you to drop your cell phone insurance plan, and get a plan from an insurance company? What if I said it would only cost you $35/year with a ZERO dollar deductible and a brand NEW replacement.
Listening yet? Good. (Before I reveal this to you I just want to say that being honest goes beyond your individual ethics. I am here to save you money, but I am also here to suggest that low premium costs are the result of honest policyholders.)
The insurance companies that offer coverage through your cell phone provider are there for a reason, to replace your broken, damaged, lost, or stolen phone, and that is great. The only problem is you pay, say $7/month ($84/year) and if you do make a claim, they still charge you a deductible of say another $50. Just for fun, let us say they do not send you through the ringer by making you get a police report or tell you the phone is on back order for the next two months.
Now, the alternative.
Instead, you have a couple options. The first option is best case, so I will mention this first. Go to an insurance agency, any one will do, but preferably an independent agency. I mean, if you are going to save some money, let us keep the local businesses running, and maybe they’ll even save you money on your other insurance needs. Now, ask for an ‘œinland marine policy’ or otherwise known as a Personal Articles Floater. The main thing is to get this as a separate policy from your car and/or home and insure your cell phone for the replacement cost. That means that if you were to walk into a store today and buy your phone, how much it would cost WITHOUT a contract. So, say it would be $400. Now, since the policy is already inexpensive, elect to have a zero dollar deductable. Be surprised when the agent asks for an annual premium of $35.
Congratulations, you have just insured your cell phone for $400, with a zero dollar deductible, and what happens when your phone is dropped on accident, lost or stolen? Either the insurance company will reimburse for repair costs or they issue you a check to buy your phone at any retailer.
Option 2 is the same as above, but to include your cell phone as a rider in your home insurance policy, possibly discounting it even more from a multi policy discount. However, with this option, too many claims can cause your homeowners premiums to increase.
Why stop here? Next time you buy your Laptop from a major retailer, skip their service plan. Instead? You guessed it, do the same thing for your laptop, or digital camera. Personally, I have insured my $450 Smartphone and my $125 digital camera on an inland marine policy, and I pay a $35 annual premium, with no deductibles.
More about Cody Hebden:
Cody Hebden is a 23-year-old graduate from Northwood University with a major in Business Administration and designations from the Insurance Institute of America. He has worked in the telecom industry and currently is an insurance underwriter in the Central Michigan region. As a past business owner and entrepreneur, he looks forward to a rewarding career in finances and perhaps consulting.
I loved this post!! I just linked/posted to it on my blog, http://www.thewisermiser.net. Hope you don’t mind, this is great advice. Thanks!
I called my insurance company, Met Life and asked about their inland marine policy. I was quite surprised at their answer. The agent said, “Oh. Well, we only insure boats and boating equipment under that. We don’t do cell phones.” I told her about this article and she said “Oh. I don’t know anything about that.” Do you think I should try calling back and asking someone else?
Absolutely. Matter of fact, today I got a notice from a company called Assurian (the phone carrier’s insurance), and the fine print even said that they were an inland marine policy. BTW, that notice from them was saying their deductibles have gone up to $100 per claim. Call back, or go to an independent agency in your area.
Ok I tried to get an ‘inland marine policy’ through Geico whom I have auto insurance through and they said the only way to get that is to have a renters or homeowner’s insurance policy. Do you have any companies that you can suggest that would just do a policy like this on a electronics? I’m trying to insure my phone as well and my husband is going to be purchasing a new camera soon so it would be nice to have one on that as well. Any suggestions would be welcomed!
Very sensible options. Going to an agency is smart. They aren’t tied to the carrier you buy from so there is no worry of unreasonable pricing or policy restrictions.
“He lives the poetry that he cannot write. The others write the poetry that they dare not realise.â€
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While this can be a great option for people that usually aren’t quite so accident prone to give them a safety net – I’d still advise folks that have a lot of losses or breakages to think twice about the separation the asurion plan gives you. I pay around $600 on my homeowners..if a claim caused that to go up 5%, I’ve immediately lost any savings over the asurion plan, and rates go down much slower than they go up, so a 2-3 year rate hike from that claim could even wipe out the savings by not having a deductible.
It really depends on whether you’re a loss or accident prone person. For businesses, it’s easy to split people up and only insure devices that will be out in the field. A telephone repairman is going to be more likely to lose a device up on a pole than a customer service rep will be.
http://networkingexchangeblog.att.com/small-business/have-you-ever-washed-a-smartphone-2/
/I am an AT&T employee, but my opinions are my own – I actually seriously considered using this approach as I don’t have many accidents myself, but the risk of homeowners going up wasn’t worth it to me. Someone with renter’s insurance might not have to worry as much since a 5% bump there wouldn’t hurt so bad.
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Thanks so much for this! This is great information and so smart!
Hi Cody just curious but do you have a inland marine policy? I have called a couple of places and they stated I needed home owners or renters in order to receive a policy. thanks for the article.