Insurance for Your Smartphones: Is It Really Worth It?

Does it pay to get insurance on your small business’s smartphones or tablets?

It may or may not.

I know that’s a lame, uncommitted answer. But it really does depend on the devices you own and other factors. Under some circumstances, insurance can save your small business a heap of money. In other situations, it doesn’t pay.

Before saying “yes” or “no” to insurance for your digital devices, you need to evaluate your current situation and keep some important considerations in mind:

1. The latest and greatest models cost more to repair or replace.

If you decide to equip your staff with the newest devices on the market, it’s typically in your best interest to buy insurance on them for at least the first 6 to 10 months. Replacement parts for new models are extremely expensive for repair shops to buy—and of course, that expense gets passed along to you if your device is uninsured and something goes wrong with it.

2. If you have models that aren’t the latest to market, insurance may not make sense for you.

The longer a model has been available, the less expensive parts become.

A typical deductible on smartphone insurance can be as high $250. And remember, you would need to pay that to replace a phone in addition to the approximate $10 to $15 per month premium fee. Depending on the model you have, the cost to repair it may be far less than insuring it.

3. When you replace a damaged device with a new one, you risk losing data.

In my experience as a digital device repair shop owner, most people don’t back up their devices’ data properly or as often as they should. That’s one strong argument for considering forgoing the insurance and getting your devices repaired rather than replaced. Under most circumstances, repair professionals can successfully preserve your data when fixing your equipment.

4. “New” may not be what you’re expecting it to be.

Don’t fall prey to the illusion that with insurance you are guaranteed a brand new device of the exact type you had before. Typically, the gadgets you receive as replacements through an insurance claim are refurbished. And if the insurance company is out of your specific model, you may get a “comparable” device rather than an exact match.

5. The math surrounding the most common repair issue plaguing devices doesn’t usually justify purchasing insurance.

Cracked and broken screens on devices (the subject of most claims) usually cost from $80 to $175 to repair professionally. Even if your cost for the repair would land in the high end of that range, you’d still be better off paying for the repair than paying a $200+ deductible and a $10+ per month insurance premium.

The Bottom Line

Think before you buy insurance on your digital devices. To understand whether or not insurance will be a good investment, consider asking a trusted repair professional for insight on what the costs to repair your device will be in the short term and what you might expect in the long term. With that expert guidance, you’ll find yourself better equipped to make the best decision for your small business’s bottom line.

Author: Kenny McKechnie is the Co-Founder and COO of Digital Dr. Phone & Tablet Specialists, where he and his team help small business owners and individuals with phone and tablet repair services in Sacramento, CA and online. A self-made entrepreneur stemming from the corporate world, Kenny is looking to educate gadget users on the convenience and cost-savings of repairing gadgets instead of replacing them.