By Tracey Dowdy

Here’s a sobering factoid: according to a survey by Plaxo, 1 in 5 people have dropped their mobile phone in the toilet. Whether it fell from the back pocket of a pair of jeans or tumbled out of a hand, 20 percent of cell phones have gone to a watery grave.

Clearly that’s a less likely scenario for your laptop or tablet, but accidents do happen. Should you consider insurance for your mobile tech to help protect you against a loss? Is it worth the peace of mind or is it simply a way for retailers and manufacturers to grab more of your hard earned cash?

Consumer Reports electronics editor Glenn Derene cautions, “Our reader surveys have shown time and again that extended warranties are not a good deal for most consumers…Many products are reliable and don’t break during the period covered, and the plans cost as much as you’d pay for a repair that might never be required.”

Keep in mind that when it came to smartphones, only 15 percent of consumers were given a new phone when the device needed repair. When you factor in an average cost of $10 per device per month and a deductible for as much as $100, the additional coverage really doesn’t work out to be such a bargain.

But what about other devices? Is coverage worth it for bigger ticket items? Again, not necessarily. With regular use, barring dropping or immersion in water, most devices are well made and don’t require a lot of maintenance or repair. It’s a matter of high cost and low risk, so purchasing an extended warranty often isn’t worth the expense.

“Only 15 percent of products in our survey were covered by the manufacturer’s regular warranty when they broke, and about 10 percent were under a service contract or extended warranty,” said Derene.

 

Having insurance is one thing – getting insurers to pay out on your claim is something else. There’s a lot of fine print in those contracts, so make sure you read the terms and conditions carefully before signing. Often the terms and conditions will exclude common accidents like dropping the device. In addition, many insurers reserve the right to choose whether they’ll repair or replace your phone with one of equal value, meaning you’re more likely to get a refurbished device rather than a new phone.

In the end, it’s up to you to determine how likely you are to lose or break your device. If you’re clumsy and know only too well the misery of a cracked screen, it might feel like it’s worth it. But keep in mind the cost to replace an iPhone screen is about $110 out of pocket which is cheaper than the insurance offered by most carriers.

On the other hand, if you’re likely to lose your device or have it stolen, the additional warranty could mean significant savings even with the deductible factored in. Also remember that your existing policies may cover loss or damage. Home owners and renters insurance generally comes with a fairly high deductible but may cover damage or loss of your device. And if you purchased the device with a credit card, the company may offer a less expensive version of the extended warranty that covers device malfunction once the manufacturer’s original warranty expires.

Tracey Dowdy is a freelance writer based just outside Toronto, ON. After years working for non-profits and charities, she now freelances and researches on subjects from family and education to pop culture and trends in technology. Follow Tracey on Twitter.