The Cost of Device Insurance

So Sprint just texted me that I’m running out of time to sign up for their “total equipment protection” insurance plan for my new LG G2 smartphone. I did some math to see just how cost-effective it would be.

The plan costs $11/month, and the deductible if your phone needs replaced is $150-200, depending on the phone. I’m using $150 for this. So, if I need to replace my phone once in the two years I’ll own it, I will have to pay $414 out of pocket for the replacement ($11 times 24 months, plus the $150 deductible). My phone, right now, only costs about $500, for a savings of $86 off the price of buying a replacement myself — by this time next year, I doubt the protection plan would save me a dime on a replacement. And if I don’t need to use the replacement plan, I will have paid $264 for nothing.

The plan does allow up to three replacements per twelve months, which over two years comes to $1,164 paid for $3,000 worth (at today’s price) of new phones, but who loses or breaks three phones in a year? I have never needed to replace a phone before my contract was up. If I had carried this sort of insurance for the whole time I have ever owned my own phone, I would have paid over a thousand dollars by now, and never have seen a dime of use from it.

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One Comment

  1. Kirra
    Posted January 24, 2014 at 10:11 pm | Permalink

    I’ve never had to replace a damaged phone, but two of the people I work with have had to replace or repair several phones in the past year and a half. It amazes me.

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