Say your phone is damaged in a fire or stolen while walking around your neighborhood. Most people would be at a loss as their phone is so important to them. Most people cannot live without their cell phone at their side. But are you covered by your homeowners or renters insurance for a cell phone replacement?
The answer is difficult. Technically your homeowners covers you for damages or theft of your belongings with limits and special exclusions. So yes, your cell phone is covered by your insurance. However, there are many factors to keep in mind before you file a claim to replace your cell phone. Often times, replacing your cell phone yourself may be the cheaper option.
With your deductible, claim limits, and replacement costs all considered, you should be able to make an informed and accurate choice when it comes to getting help from your insurance or covering the cost yourself.
Be aware of your deductible
Your cell phone is just like any other belonging when it comes to homeowners insurance coverage. Before the insurance company is willing to pay out for repairs or replacement, they will use your deductible first. Most insurance deductibles range from $500-$2,500 and your average phone is around $600 with the higher end models reaching up to about$1,000. This means that the cost to replace your phone will be lower than your deductible.
Your insurance will use your deductible to pay for your new phone and even if the cost is more than your deductible, you will receive a small amount from your insurance company. In most cases it’s more harmful to your policy to file a claim to replace your phone as the more claims you file, the higher your premiums. Your insurance company might even cancel your policy if they determine you to be a possible financial loss.
Think before you file your claim, is the cost of the claim worth the payout or would it be more beneficial to purchase the new phone yourself?
Schedule your cell phone
If you decide you need to have coverage on your cell phone other than your cell phone warranty, you always have the option to schedule it under a separate policy. Scheduling your cell phone under your homeowners or renters insurance will allow you to cover your phone from specified risks like fire and theft. If your cell phone is scheduled, you may find that your insurance company will pay to repair or replace it to its full value.
This brings a different question into play.
Is it worth the cost?
By scheduling your cell phone as a specific item with its own policy, you are purchasing a separate policy. This will cost you the rates that your policy lists as well as a policy specific deductible. By calculating the cost of the rates per year and adding the deductible you can decide if the scheduled policy is worth the cost. If the cost of the policy is $10 per year for 3 years ($360) and a deductible of $50 ($410) then you have to see if the phone is more expensive than your policy and worth the cost.
Unfortunately, most cell phones are not worth the price you’d pay to file a claim and have your homeowners or renters insurance pay to replace them. Either your deductible will cover the full cost and you’ll have wasted a claim, or your separate policy will be too much and the new phone will not justify the cost of the policy.
Often times its more beneficial to just buy a new phone or pay for repairs yourself. There are options out there for those who need them like scheduling your cell phone or having a lower deductible but both options cost more money elsewhere.
If your cell phone was lost along with other items during a massive fire or theft, you may be able to file a claim as the cost could surpass your deductible. But if your cell phone was the only item lost, it’s more likely that it won’t be worth the cost. Check with your insurance agent to see what your policy states and find out if filing a claim is the right choice for you.
To learn more, read our article: Scheduled Personal Property Insurance.