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According to a Pew Research Center study, more than 97% of Americans own a cellphone of some kind and for some of us, our phone is a constant companion. Unfortunately, some of us have a good reason not to have nice things: We’re really, really talented when it comes to breaking them.
When you consider how expensive cell phones can be and how they’re used and abused, insurance against damage or theft to your phone can be a smart move. But before you shell out for a pricey plan, know that you may be able to get coverage at no additional cost—if you have the right credit card.
These cards come with protection against theft or damaged phones (but not misplacing or losing them), along with other benefits and features that make the cards stand out. Review the terms and conditions for coverage as they vary by card.
Cell phone protection is becoming more common as a card benefit, particularly with World and World Elite Mastercards. If you’re paying your cell phone bill via credit card and it isn’t on one of those we’ve discussed here, check your card benefits guide to see if you might be able to qualify for coverage—and what limitations may apply.
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What Is Cell Phone Insurance?
Cell phone theft and damage insurance usually provides coverage for any mobile device against theft, loss, defects or damage. Major wireless providers like Verizon or AT&T typically offer insurance policies through a large insurance partner like Asurion. Mobile phone manufacturers like Apple and Samsung also offer protection plans any iPhone or Samsung user can purchase.
Insurance policies from manufacturers or carriers usually offer a small window to activate an insurance plan, like within 30 days of activating or upgrading your device.
Typically, you only need one cell phone insurance policy, so it may be a good idea to shop around for the best one that suits your needs if you’re looking strictly outside of credit card benefit coverage. Consider factors like how many devices need to be covered, deductible cost, and potential discounts before making a final decision. Even within credit card coverage, plans are different.
What to Know About Credit Cards with Cell Phone Insurance
Some card issuers offer cell phone insurance as an incentive for customers to use cards for recurring charges. If you’re accident-prone, have many phones on your family plan or always have the latest, greatest flagship phones, the coverage offered through your credit card might not be enough.
Consider these factors before hopping on a cell phone insurance policy with your card issuer:
- Read the fine print. Cell phone insurance plans on credit cards have limits. Specific terms vary by credit card, but you can expect a deductible, maximum reimbursement amount and a limit on the number of annual claims you can submit.
- Be ready to pay a deductible. Like most insurance plans, you should expect to submit plenty of documentation to file a claim, which includes paying a deductible before savings kick in. Save the receipt from the purchase of your device and expect to obtain a repair estimate on damages or file a police report if your phone is stolen. The effort is worth it: Some policies will reimburse for up to $800 per claim and $1,600 per year, after any deductibles—usually $25 or $50 per occurrence.
- Make sure you charge every monthly cell phone bill onto that credit card. Simply pay your monthly cell phone bill with an eligible credit card and you’ll benefit from a policy similar to what you’d purchase directly from your cell carrier. Be sure to pay with the card, as your phone probably won’t qualify if you don’t.
- Consider dropping those insurance payments to your cell phone carrier. Usually, there’s no need to have more than one cell phone insurance policy. Having cell phone insurance covered by your card issuer is an added bonus to owning that credit card, but you should go for the policy with the most value to your favor.
How Does Cell Phone Protection Work?
Cell phone insurance plans are similar to other types of insurance like auto or home coverage. Whether a phone is lost, stolen or damaged, the policyholder has to file a claim with an insurance provider. A cardholder will usually have to pay a deductible on each claim. Deductible costs are usually much lower than retail value for a new or repaired phone.
To file a claim, you’ll typically need to know your phone make and model, phone carrier and have a card ready to pay a deductible. If protected through your card issuer, file a claim on your online account and pay any necessary deductible to fix or replace a phone. If protected through a card network like Mastercard, you may need to file a claim directly with the payment network rather than the card issuer. Either way, you can call the number on the back of your card to learn the details of the claims process.
What Do Cell Phone Insurance Plans Cover?
Cell phone insurance policies vary by provider. Insurance plans may include protection against theft, loss, damage or defects. “Damage” is a loose term not clearly defined across all providers. Some may cover cracked screens, while others will only cover hardware failures.
Benefits vary among different credit card issuers and payment networks (e.g. Visa, Mastercard). Even different credit cards offered by the same issuer might have separate cell phone insurance benefits. The only way to know for sure what’s covered is to read the terms of your agreement with the card issuer or payment network. Look for a maximum number of claims per year, what sort of damage is protected, whether cell phone loss (not just theft) is covered and what the deductible is.
How Do I Know If My Card Has Cell Phone Protection?
The simplest way to know if your credit card offers cell phone insurance is to read the terms of your card agreement or call the number on the back of your card. Keep in mind payment networks like Mastercard offer cell phone insurance to anyone who carries a specific type of Mastercard—no matter the issuer—which means you’ll have to read Mastercard’s terms as opposed to your card issuer’s.
Finding details about cell phone coverage may be difficult for some as this small but powerful benefit’s information can be buried deep in the fine print. When in doubt, call the number on the back of your card and ask a representative if the credit card offers cell phone insurance and what the exact benefits and limitations are and where you can find them.
Is Cell Phone Insurance Worth It?
If you own an expensive smartphone and expect to break it before its value is completely gone, it’s a good idea to get it insured. The latest iPhone from Apple starts at $429 and can cost up to $1,599—probably worth protecting.
Whether you purchase insurance through a phone carrier, phone manufacturer or receive it as an added bonus from your credit card, insurance is good to have even if only for peace of mind.
According to market research firm Kantar Worldpanel, the average U.S. phone owner in 2018 held onto a single phone for almost two years before upgrading. In two years a phone can receive plenty of damage or fail unexpectedly. A major benefit to having cell phone insurance is protection from large out-of-pocket expenses when replacing a phone because it fails entirely.
Alternatives to Credit Card Cell Phone Insurance
One of the cards already in your wallet may offer cell phone insurance. Perhaps there’s a new card with this benefit along with other rewards, interest rates and perks that make a good fit for your spending habits. If not, this benefit isn’t your only option.
Many American Express cards*, Visa Signature and Infinite, and select Mastercards include purchase protection for devices purchased on your card. This lesser-known credit card benefit covers you against theft and accidental damage for a limited period of time—usually 90 days.
There’s a large caveat, though: You’re only protected if you bought a new (not refurbished) phone and paid in full instead of making installments. For pricier phones, that’s a big upfront commitment in exchange for peace of mind. It also leaves any phones paid for month-to-month off the table. Phones may also not qualify, depending on the purchase protection limits of the specific issuer.
Many homeowners insurance and renters insurance policies cover phone theft but not loss or damage. These policies can also have higher deductibles than a dedicated cell phone policy, but it’s better than nothing.
You can, of course, buy a separate policy through your phone’s manufacturer (e.g. AppleCare) or service provider (e.g. AT&T Device Protection). Examine policies closely because deductibles and coverage limits vary based on the plan you choose and the exact model of your phone. Some of the manufacturer’s policies will also cover loss and/or cosmetic damage—two perks rare on plans offered by a credit card issuer.
No single credit card is the best option for every family, every purchase or every budget. We've picked the best credit cards in a way designed to be the most helpful to the widest variety of readers.
Bottom Line
Purchasing cell phone insurance separately isn’t absurdly expensive, but it’s redundant if you’re able to use a credit card to qualify for a policy at no additional cost. Given phones are such an integral part of our world and have significant replacement and repair costs, it makes sense to take advantage of this perk if your credit card offers it.
Of course, you shouldn’t pick a credit card based solely on this feature. Choose the card best in alignment with your spending habits and know any extra perks—like cell phone insurance—are a great money-saving bonus.