Is mobile device insurance a dice roll?
Andrew Moore-Crispin • August 20, 2013if( has_post_thumbnail( $post_id ) ): ?>
When you’re spending your hard-earned money to buy a brand new mobile device, it makes sense to hedge your bets, paying a monthly premium to protect your investment, right?
Maybe. Maybe not.
Generally speaking, device insurance is an emotional as opposed to logical purchase. It’s monthly instalments on peace of mind. Some people may come out to the good but for that to happen, many more people need to be paying in without drawing out… or at least drawing less than they’ve paid in.
How device insurance works
To distill (grossly over simplify?) the insurance business: All premiums go in to a pot. Claims are drawn from that same pot. After operating costs, what’s left is the profit.
Device insurance companies charge a deductible and, as with all insurance, there may be caveats (more commonly known as gotchas) that you could encounter when making a claim.
At their essence, insurance companies are odds-makers. They figure the odds of something happening to your device and factor against the replacement cost. You pay a monthly premium with the understanding that if something does happen and if your insurance covers that particular something (inexplicably, only one of the companies we looked at specifically covers volcano blasts, for example) you’re covered for the device replacement cost.
It’s worth remembering that the “replacement cost” of your device likely isn’t your purchase price and that phones depreciate in value rather quickly.
So should I get device insurance?
Please see “Maybe. Maybe not,” above.
It’s a dice roll. Knowing that insurance is for-profit and that and that the odds always favor the house, the decision comes down to whether the monthly premium you pay is worth the peace of mind you get in return. If so, by all means, buy in.
As we said, it’s an emotional as opposed to logical decision. Just knowing that, you’re making an informed choice, whatever choice it is you make.
Do you go for device insurance? Do you have your own “just in case” strategy? Let us know in the comments below!