Is phone insurance worth the cost?

Cell phone insurance

That is why insurance for your smartphone is not worth the money

Henriette Neubert
Expert for insurance as of February 9, 2021

Henriette Neubert

Henriette Neubert writes about insurance topics in the Finanztip editorial team. She has already worked in various online editorial teams and, at the same time, completed part-time training as a business journalist. She studied economics and business administration at the University of Leipzig and gained her first practical experience in Zurich and Dublin after completing her studies.

  • Manufacturers, traditional insurance companies and even retailers offer you mobile phone insurance directly when you buy a smartphone.
  • We do not recommend such insurance. They are expensive and the benefits are limited.
  • It is cheaper and more sensible if you minimize existing risks yourself.
  • Don't let the seller quickly convince you to take out mobile phone insurance.
  • If that happened to you, you can use the 14-day right of withdrawal.
  • Use cheaper ways to protect your phone from damage or to repair damage that has occurred.

For some it is an indispensable work tool, for others a toy to pass the time or a status symbol: the smartphone. Such a new device is always expensive. And especially if you have saved up for the latest Apple iPhone or Samsung Galaxy. Then the joy often goes hand in hand with the fear that it could be broken or lost.

Many cell phone sellers address this fear even before you hold your new smartphone in your hands: “What if the cell phone breaks because it falls down or gets wet? Or if it is stolen? ”Wouldn't it make sense to have insurance that would help you in the event of damage? Finanztip explains why you should usually forego mobile phone insurance.

Is it worth taking out mobile phone insurance?

If you are considering taking out insurance for your new smartphone, you have a number of tariffs from various insurers to choose from. Starting with the manufacturers themselves through the dealers to insurance companies. But there is no offer that we recommend. Because protection is relative expensive and the Limited services. Often there is also one long running time, even though the value of your cell phone is rapidly declining.

Cell phone insurance is that expensive

The price for mobile phone insurance depends on the purchase value of the smartphone. The more expensive your phone, the higher the insurance amount. For a one- or two-year contract, you pay annually at least 10 percent of the mobile phone purchase price. With a monthly contract it gets even more expensive. Against theft If your phone is usually not secured yet, that usually costs 2 to 3 euros extra per month.

So if you have spent 550 euros on your phone, the insurance including theft protection will cost you over 80 euros per year. In the event of damage, however, you have to also consider a deductiblethat most insurers require. The deductible also depends on the purchase price and is around 10 percent.

It's expensive, very expensive in fact. For comparison: Who would pay an annual contribution of 1,000 euros for the vehicle insurance for a car worth 10,000 euros and also agree on a deductible of 1,000 euros? After all, the average premium for a fully comprehensive car is around 550 euros per year.

These services are included

Your insurance pays when your cell phone

  • by Breakage and fall is damaged,
  • by Water or moisture is defective,
  • when charging the battery Overvoltage damage suffers
  • Fire catches,
  • through a Operator error Takes damage and
  • by vandalism breaks down.

Theft protection only exists for almost all tariffs if you also insure it for a surcharge.

A cell phone insurance does not pay for a lot

Insurance does not pay if you lose your cell phone your own fault are. This doesn't just mean that you've lost your smartphone. Even if you have your Due diligence violatedFor example, if you leave your cell phone unattended on the table in a café for a short time, the insurance company may refuse to pay for the damage.

By the way, the location specialist Prey reports that smartphones are lost much more often than they are stolen. Almost 70 percent of the phones tracked had been lost by their respective owners. An existing mobile phone insurance would not have paid. Only 11 percent of missing phones were pickpocketed. In the remaining cases, the phone was stolen or stolen during a break-in - then your home insurance pays the loss at its replacement value.

In the event of damage, cell phone insurers usually only pay the new value (i.e. the amount that you paid yourself) if your cell phone is less than six months old. After that, will only the so-called current value is paid, i.e. how much the phone is currently still worth. However, especially with smartphones, the loss in value is very high. For Android devices, the value drops by an average of 35 percent after one year (for Apple by around 24 percent), as a Finanztip analysis on comparison portals shows. After two years, the value drops by more than 60 percent, as various studies, for example the purchase platform BankmyCell or Chip.de show. If you paid 750 euros for your smartphone, it will be worth less than 300 euros after two years. That would be the amount of damage that you are entitled to from the insurer - but without your deductible.

Many insurance companies have explicit current value tables in their terms and conditions: after half a year you will receive 80 percent of the purchase price, and after a year only 60 percent of the purchase price. If there is an insured damage, it will be checked whether a repair is worthwhile. If the repair costs exceed the current value, you will either receive the current value (minus your deductible) or a comparable replacement device.

That is why the runtime is too long

Most tariffs have a minimum contract term of twelve months or even two years. If shorter terms are offered, you have to pay a surcharge compared to the longer contracts. Since the value of your phone drops at the same time, it can happen that you at the end of the contract period paid more insurance premiums has, when your phone is still worth it.

Insurance and damage costs compared to phone value

 priceafter 1 yearafter 2 years
Worth cell phone755 €490,75 €294,45 €
paid insurance
posts
 94 €179 €
Deductible100 €  
Reimbursement after total write-off1 296,75 €15,45 €
Refund repair display300 €106 €215,45 €3
Refund repair battery490 €-184 €-269 €

Basic assumptions: Samsung Galaxy S21, insurance premiums 12/24 month contract including theft insurance
1 Current value of the phone minus deductibles and insurance premiums paid
2 Repair costs minus deductibles and insurance premiums paid
3 like total write-off, since repair costs exceed the current value of the phone
4 Repair costs (paid by yourself, since it is lower than the excess) plus insurance premiums paid
Source: Finanztip calculation, Mediamarkt, Hepster and Cosmos Direkt (as of February 12, 2021)

The table shows that the insurance is rarely worthwhile, especially in the second year you pay on it. Except in the case of a total loss (or theft) in the first year, you end up getting hardly any benefits from the insurance compared to the contributions you paid. In our example, you would pay 184 euros for a battery repair in the first year (90 euros repair, because of the deductible plus the insurance premiums), compared to 90 euros without insurance. Instead of paying for insurance that you may never get, take appropriate measures to protect your phone.

Sometimes an option: Offers from the manufacturer

Some smartphone manufacturers offer their own insurance coverage. At Apple you get basic protection (Apple Care) for one year free of charge. However, this does not cover your own fault.

Samsung is offering Samsung Care + protection free of charge for one year, the so-called Galaxy Z Premium Service, for its products in the current Galaxy Z series (Galaxy Z Flip, Galaxy Fold and Fold2). This year you can report a claim and then only have to pay a deductible (109 euros for the Galaxy Z and 130 euros for the Galaxy Fold models). Theft is not insured. You have to take out Samsung Care + protection immediately when you buy your phone or at the latest 30 days after you bought it.

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How can you protect your phone more cheaply?

To avoid the risk of expensive repairs, you don't need expensive insurance. It is cheaper if you take measures to protect your phone from damage.

theft

You can't always prevent your cell phone from being stolen. Therefore, an important tip in advance: write down the so-called IMEI number immediately after buying the mobile phone. You can read where you can find the number in our guide on the subject of cell phone loss. There we also give you important tips on how to behave in the event of theft.

Overall, cell phone thefts have decreased significantly, for one simple reason: The personal authentication with face or fingerprint means that the phones are usually worthless to thieves. So you should definitely set up this protection on your smartphone. You can also register your phone so that you can quickly locate it and find it again. Another good way to keep thieves away: keep your cell phone tightly locked in a bag or wear it on your body with a chain.

Breakage

Smartphones are nowhere near as stable as old cell phones. The display and partly also the back are made of glass and easily shatter if the phone is dropped. A Armored glass film on the display and one Phone case but help effectively to prevent such damage and cost a fraction of the cell phone insurance.

Water damage

Here, as well as against loss, it really only helps Mindfulness. A lot of water damage happens because the cell phone slips out of your pocket and falls into the toilet when you go to the toilet. You can prevent this by not putting your phone in your pocket. New smartphones are now better and better protected against splash water and do not break so quickly. If only a small amount of moisture has got into the phone, it is sometimes enough to turn it off and let it dry.

Vandalism, overvoltage, fire

This damage is extremely rare and does not warrant insurance. In the past, Samsung has had problems with the battery catching fire. In this case, the manufacturer is liable, because of course you always have a warranty on your phone within the legal scope.

If there is overvoltage damage due to lightning strikes while charging the phone, pays yours Home insurance if you have one. The same applies to fire, vandalism or theft within your apartment (or in your hotel room when traveling).

External damage

You do not need mobile phone insurance to be insured against third-party damage. First of all, if a friend drops your phone, your friend has caused the damage to your property. In this case, you should check together whether your friend's personal liability covers the damage. If the person who caused the damage is not insured, you can contact your private liability insurance. In this case it is important that you have also insured the clause “Cover against bad debt” - which we recommend.

What if it does get damaged?

If your phone is damaged, your home insurance or private liability insurance may cover it. Then you even get the new value. It is often worth having your cell phone repaired, even if you have to pay the costs. But there are a number of providers where repairs are cheap. In order to find the right person, personal recommendations, reviews on the Internet (reviews with a description are more credible; negative reviews are often more informative) and your own gut feeling after a short conversation help.

If your phone is more than a year old, your model is now so cheap that you can buy one add new used items can. You can often get a second-hand smartphone at a good price, With serious dealers also with warranty and right of return. You can read more on this topic in our guide to used cell phones.

What do you do when you get a mobile phone insurance?

If you have bought a new smartphone in the last few days, look carefully to see whether you can find an insurance policy in the documents. In the case of dubious dealers, it may well be that you have a Mobile phone insurance taken out has, without you really knowing about it.

If you got an insurance in the store, you have 14 days right of withdrawal. A simple e-mail with details of the insurance number is sufficient for the revocation. Confirm receipt. Shortly before the 14-day period expires, it is best to use a fax with a delivery report. Registered mail is the safest method, but it is expensive compared to the value of the insurance.

If your withdrawal period has already expired, you can check how the end of the contract is regulated. Some tariffs end automatically after the agreed term. Others can be canceled on a monthly basis. You may then have to expect a surcharge. Nevertheless, this is cheaper than paying the insurance for the entire term.

If the contract cannot be terminated early and does not end automatically, you have to look carefully at how the contract term and the notice period are regulated. Many contracts have a term of two years with a notice period of one month. It is best to mark the notice period in the calendar so that you do not forget it.

Henriette Neubert

Henriette Neubert

Henriette Neubert writes about insurance topics in the Finanztip editorial team. She has already worked in various online editorial teams and, at the same time, completed part-time training as a business journalist. She studied economics and business administration at the University of Leipzig and gained her first practical experience in Zurich and Dublin after completing her studies.

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