Lost or Stolen Cell Phones – Is it Worth it to Make An Insurance Claim?

It happened. You lost your cellphone. New devices can cost hundreds of dollars to replace off contract, so you may be wondering if it's worth it to make an insurance claim?

Making a property insurance claim

Technically, cellphones are personal property and would be covered under your home insurance or tenants insurance contents policy, but it might not make sense to file a claim. For starters, you need to look at the cost of your deductible. This is the amount you are required to pay in the event of a claim. These usually range from $500 to $1,000. In the latter example, the deductible would be higher than the cost of replacing the phone, so you would not receive compensation for your loss, yet you'd be stuck with a claim on your record.

You also need to ask yourself if it's worth losing your claims-free discount. If you've made claims in the past this might not be as big a deal, but if you haven't made a claim, losing this discount could significantly increase your premiums. These discounts are sometimes as high as 20 per cent! The cost of replacing the device is likely cheaper than the cost of your deductible and the penalties associated with losing your claims-free status. You might want to contact your provider to discuss how making a claim could affect your rates.

Separate cellphone insurance

Going forward, you may want to think about adding a separate insurance policy for your phone or mobile device. Many insurance providers offer riders, also called floaters or scheduled items, that allow you to insure certain contents separately and often with a low to no deductible. Before you sign up for one of these, you'll want to make sure disappearances are covered under your policy. Even though these are separate policies, it's important to note that a claim for a scheduled item could still impact your overall property insurance rates.

It's best to discuss with your insurance provider first. While some mobile providers also offer extended warranty coverage for damages, only select plans offer coverage for lost or stolen devices. These plans range from $7 to $15 a month. Before dishing out the extra dollars for this insurance, make sure you read the fine print to find out exactly what's covered under a mobile provider's extended warranty policy.

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The decision

While insurance is there for you in the event of a loss, it's important to weigh the pros and cons of making small claims as they can make a big difference on your premiums. You may find it is more cost effective to take the initial hit and pay out of pocket for a new device. Talking to your insurance provider can help you determine the right course of action. And if you do decide to file a claim and your rates go up as a result, don't forget to shop around. A new provider may offer you a better rate even without a claims-free status.

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