What would we do without smartphones, tablets, and laptops? It’s difficult to picture living without them, and when they break down, repairs or replacements can be costly. This is where electronics insurance and extended warranties can help.
Electronics insurance, also known as “gadget insurance,” covers damage to your mobile devices that your homeowners insurance does not, such as when your item simply stops operating. But do you really need this insurance?
Here’s an overview of what coverage you may already have, how electronics insurance works, and where you can obtain it.
Are your devices already covered?
You may have greater coverage for your electronics than you realize. Before you get device insurance, make sure you have adequate financial protection through your existing insurance plans or credit card.
Homeowners and renters insurance
If you have homeowners or renters insurance, electronic devices are usually covered under the personal property component of your policy. This coverage will typically reimburse you if your belongings are stolen or damaged by a fire, windstorm, or other disaster specified in the policy.
Some limits apply:
- Home insurance coverage usually does not cover electrical devices that cease working or are damaged in an accident.
- Portable gadgets, like smartphones, laptops, and tablets, may be covered up to a specific sublimit, such as $1,500. (You may typically get more coverage, however.)
- If your electronics are damaged or stolen and you do not have replacement cost coverage, your homeowners insurance will only pay for the existing worth. Usually, that isn’t enough to replace them with fresh ones.
- Any compensation from your insurer will be reduced by the amount of your deductible, which is the amount you are responsible for when filing a claim. So, if your $800 phone is stolen but your homeowners deductible is $1,000, your insurance coverage will not cover the loss.
Extended warranties through your credit card
If you purchased an electronic gadget with a credit card, review your card advantages. You may have an extended warranty for the gadget.
Some Visa, MasterCard, and American Express cards will add an extra year of coverage to the original manufacturer’s warranty at no cost to you. Because this coverage is similar to the original warranties, your equipment will be protected for manufacturer defects but not theft, loss, or accidents. In addition, certain card issuers may provide phone service if you use the card to pay your wireless account.
Do you know if your credit card has extended warranty coverage? To obtain a complete list of card advantages, call the number on the back of your card or log in to your online account.
How electronics insurance works
Electronics insurance covers items that a manufacturer warranty or house insurance policy typically does not, such as accidental spills and drops. If your gadget is broken or malfunctioning, you can file a claim for repair or replacement. You may have to pay a deductible or service fee.
A short note on terminology: When looking for electronics insurance, you may encounter terms like extended warranty, protection plan, and service contract. There are changes in how these items are controlled, but from a customer standpoint, they are very similar. What the plan is called is less significant than what it includes (and excludes).
Individual devices, such as your phone or laptop, are the most typically covered by electronics insurance. However, other companies provide plans that include numerous devices, such as televisions, gaming consoles, and home theater systems.
Some options allow you to pay on a monthly basis. Others are valid for a fixed amount of time, such as two to three years.
Full coverage does not usually go into effect immediately. Some policies require a waiting time, such as 30 days, between when you purchase coverage and when you can file a claim. There may also be restrictions on how old your gadget is or when you must purchase your plan after purchasing the device.
Before entering into a service contract or insurance policy, it is usually a good idea to thoroughly read the terms and conditions.
Do you need electronics insurance?
Several factors determine whether or not electronics insurance is a good value. The most important factor is the likelihood that your item will require repairs.
For example, if your phone has a strong, waterproof case and you are careful with your belongings, phone insurance may be a waste of money. However, if you have young children with overactive, clumsy fingers who enjoy playing with your phone, purchasing insurance may be a wise decision.
Even if you believe you will require repairs at some point, the math does not always work out.
Assume you insure your new iPhone for $8.99 per month, with a $149 deductible each repair. You keep the phone (and the insurance) for two years, during which time you make one claim for a damaged screen.
HomeAdvisor, a home services website, estimates that fixing a damaged iPhone screen can cost between $70 and $400. Meanwhile, the entire insurance cost plus the deductible is approximately $365. In this case, the insurance may or may not pay out, depending on the degree of the damage.
Here are some questions to consider when choosing whether you need electronics insurance.
- Do you feel comfortable with the coverage you now have through your house insurance or credit card?
- What forms of damage does electronics insurance cover that your current policy does not?
- How much will the plan cost you, including deductibles and service fees?
- Would having to fix or replace your device on the spur of the moment be financially difficult?
Where to buy electronics insurance
Phone insurance is frequently available through your wireless operator, and extended warranties are sold by manufacturers such as Apple and big-box retailers such as Best Buy. However, you may also wish to look into third-party suppliers like the ones listed below.
Akko
Akko offers two plans: one for just your phone and one for up to 25 other items like computers, tablets, cameras, video game consoles, and even power tools.
The plans provide coverage for:
- Cracked screens.
- Spills and submersions.
- Theft.
- Accidental damage.
- Component failures in phones, other portable electronic gadgets, and televisions.
- Mysterious disappearance (one claim every 12-month period).
Students may be eligible for discounted rates.
Allstate Protection Plans
Allstate sells individual device plans through a subsidiary called SquareTrade, which includes phones, laptops, tablets, televisions, cameras, and fitness trackers. You may also purchase a family package that includes up to four phones.
A basic plan includes mechanical and electrical failures, as well as incidents like drops and spills. An upgraded plan includes identity theft recovery services, technical support, and one Allstate roadside assistance call each year. Neither plan reimburses for loss or theft.
Phone plans are charged monthly. For most other gadgets, you can specify how long your warranty will be valid, such as two or three years.
Asurion
Asurion offers one protection package for your phone and two more for the rest of your electronic devices. The Home+ Entertainment plan includes smart TVs, gaming consoles, and other entertainment options. Upgrade to the Home+ plan, which includes PCs, tablets, printers, smart home devices, and more.
Phone plans include the following:
- Cracked screens.
- Defects and failures.
- Water damage.
- Battery replacement.
- Theft or loss.
- Accessory damage.
Home+ and Home+ Entertainment coverage breakdowns are related to:
- Defects.
- Normal wear and tear.
- Power surges.
- Dust, heat, or humidity.
- Drops and spills on portable devices like laptops and wearables.
Unlike the phone plan, Home+ plans do not cover theft or loss.
The Home+ plans can be purchased directly from the company’s website, but Asurion phone plans are only accessible through wireless carriers and other merchants.
Upsie
Upsie provides individual extended warranties for a wide range of products, including smartphones, laptops, tablets, and smart home technologies. The company sells warranties monthly.
Upsie warranties do not cover loss or theft, but they do compensate for liquid damage, cracked displays, and battery failure, depending on the model.
Deductibles vary by item but range between $0 and $150.
