Cell phone insurance

Insurance for smartphones

On the one hand, “cell phone insurance” refers to a risk insurance policy (underwriting) that specifically covers damage to a mobile device and provides for loss compensation through a collective capital collection point with the insurer. In common parlance, cell phone insurance also refers to the individual insurance contract.

How does cell phone insurance work?

In cell phone insurance in the narrower sense, i.e., the cell phone insurance contract, owners of the smartphone as policyholders pay a fixed insurance premium to the insurer (i.e., the insurance company). The contract specifies exactly which damages are covered and will be covered by the cell phone insurance in the event of a claim.

Premium smartphones such as the current iPhone models from Apple or the Galaxy S class from Samsung are very expensive. It can therefore make sense for consumers or, in the case of company cell phones, for the company to insure the mobile device against frequently occurring damage. This saves costs for repairs or new purchases in the event of damage.

Depending on the insurance contract, the scope of insurance determines whether, for example, only the repair is covered, or whether additional services such as a replacement device or a time value reimbursement are also covered by the cell phone insurance. The contract also regulates other details such as certain waiting periods after taking out the insurance, the amount of any deductible, no-claims bonuses or additional benefits such as theft protection.

Typical features of a cell phone insurance contract

The “typical” case of damage to a smartphone is a broken display. Almost three quarters of all reported damages are caused by a cracked display. Another common claim is water damage – everyone knows the stories of the smartphone dropped in the toilet. Damage to the electronics due to a short circuit or overvoltage is also a typical cell phone claim, and some insurance policies also cover vandalism or operating errors (for example, deleting system-relevant files).

In the corporate environment, one variant for insuring company cell phones is a company cell phone rental model (Device as a Service). In the Everphone rental model, typical damage is already covered by the rental contract, and special cell phone insurance is no longer necessary. In the event of damage, tenants receive a new replacement device.