iPhone Insurance

 iPhoneBrokenScreenWe've all seen the pictures on the Web. Despite Apple's claim that the iPhone 4's new glass case is "20 times stiffer and 30 times harder than plastic," numerous reports of users breaking the case have surfaced. With a new contract, you can buy an iPhone for as cheap as $99. But if something happens, it can cost as much as $700 to replace.

All new iPhones come with the basic Apple Warranty, which provides 90 days of technical support (hardware and software) and a one-year limited warranty that covers manufacture defects on your device, its battery, and its accessories. It's included in the price of the iPhone, and it has no deductable. However, it does not protect against loss, theft, or accidental damage caused by the user such as drops or spills.

Personally I've always been one to insure my valuables, partly because I tend to break things and partly because peace of mind is priceless. In addition to the basic Apple Warranty, there are a number of other options for insuring your iPhone. Each has its pluses and minuses. While not covered in this article, Apple has similar plans for the iPad.

Apple Care

Price: $69, no deductable; apple.com


Apple Care extends the standard Apple warranty for an extra year. It starts when your warranty expires and provides the same coverage against manufacturer's defects. It does not extend the 90-day technical support.

Pros: It extends basic coverage an additional year and has no deductable.

Cons:Relatively expensive considering that it only covers you for one year and does not cover you against loss, theft, or accidental damage caused by the user. Can only be purchased during the initial year of your free basic Apple Warranty.

SquareTradeiPhone Insurance


Price: $99, $50 deductable for accidental damage claims, squaretrade.com

Covers you for two years, but you can cancel it at anytime and receive a prorated refund. It covers manufacturing malfunctions including battery failure, and accidental damage caused by the user such as drops or spills. There is a $50 deductable for accidental damage claims.

Pros: Very reasonable two-year price and a reasonable deductable; Square Trade has a very good reputation. Also covers older iPhones.

Cons: Does not cover you against loss or theft.

MobileProtect for iPhone

Price: $12 per month (must be purchased within the first 30 days of owning your new iPhone); deductable applies to all claims; mymobileprotect.com

MobileProtectMobileProtect covers you against manufacturer malfunctions, accidental damage, loss, and theft. At $12 per month/$144 per year it's the most expensive plan listed in this article. In addition, a relatively steep deductable applies to all claims, ranging from $99 (for 8GB 3Gs and 3GSs) to $199 (for 16-32GB 3GSs and iPhone 4s). However, it is the most flexible plan discussed (you can subscribe a month at a time) and provides the most complete coverage.

Pros: Backed by AT&T; monthly contract, the only insurance that covers you against loss and theft.

Cons: More expensive monthly fee and a very high deductible. How much financial sense this makes depends on how far along you are in your service contract. For example, if you replaced a lost 16GB 3GS after paying for 12 months of MobileProtect, it would cost you $343 ($144 for the insurance and $199 for the deductable). You can get a used 3GS in good condition on eBay for under $250.

Protect your investment with these insurance options
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