How Does Credit Card Cellphone Insurance Work?
Find out if this credit card perk is worth it
With the latest smartphones costing more than $1,000 for high-end models, replacing or repairing a stolen or damaged phone can get pretty pricey. Americans reported spending $3.4 billion repairing cracked screens alone in 2017, according to a SquareTrade study. SquareTrade found that screen repairs could cost as much as $599 but that 70% of phone owners believed screen repairs cost less than $150.
Some credit cards offer cellphone insurance at no additional charge that could drastically reduce the cost of a phone repair. In most cases, all you have to do is pay your bill with the card. We’ll take a deeper dive into credit card cellphone insurance and help you decide whether it’s worth it.
What Is Credit Card Cellphone Insurance?
Credit card cellphone insurance is a benefit provided by your credit card issuer or credit card network saving you from paying out of pocket for hundreds of dollars for damage or replacement. In most cases, you’ll work through a benefit administrator, not the credit card issuer.
Basic insurance through Verizon, T-Mobile, and AT&T costs $6.95 to $19 per month.
When you submit a claim, the insurance policy reimburses you up to a certain amount for eligible costs related to damage or theft of your smartphone. Like other types of insurance, you’ll have a deadline after damage or theft to make a claim, you must provide proof of the damages, and you’ll pay a deductible. There are limitations and exclusions, too.
What Does Credit Card Cellphone Insurance Cover?
Cellphone insurance provided through issuers like Chase and Citi typically covers damaged and stolen phones for the primary phone number and additional lines on the same cellphone plan.
Some providers only offer secondary insurance, kicking in only after the primary provider has covered its share of losses. That means you’d make a claim with any other insurance you have first, like insurance from your cellphone service provider or homeowner’s or renter’s insurance if you have it. Then, your credit card’s cellphone insurance coverage would kick in to cover the remaining amount, up to your claim limit.
Not all types of phones and losses are covered by credit card cellphone insurance. For example, common exclusions include:
- Lost phones
- Accessories other than the standard battery
- Cellphones stolen from checked baggage
- Prepaid, rented, or borrowed phones
- Cosmetic damage
- Taxes and fees
Credit Card Phone Insurance vs. Other Options
Most cellphone carriers offer phone insurance and may even require it if you’re financing a new phone through your carrier. However, if you’re paying for a cellphone in full or you’ve paid off your phone, it’s worth considering other options.
|Credit Card Phone Insurance||Carrier Phone Insurance||Homeowners Insurance|
|Cost||No additional cost, but you must pay your cellphone bill with your credit card||Between $6.95 to $19 per month for coverage from major carriers||A rider must be added to your policy for losses and damages unrelated to your home policy. The annual cost could be $30 to $50|
|Number of claims allowed||Usually up to two claims per year||Two to three claims per year||Claim limits depend on the policy, but your rate could increase when you make a claim|
|Deductible||Deductible ranges between $25 and $50 per year||Deductible is based on the phone model and can be as high as $499||Losses are subject to your policy deductible, which usually starts at $500-$1,000|
|Reimbursement||Maximum reimbursements are between $600 and $800 for most consumer credit cards||Devices may be replaced with a reconditioned or device of the same type, depending on availability||The insurance deductible may be higher than your phone’s value|
|Coverage for accessories||Accessories generally are not covered||Accessories may be covered when they’re part of the original device purchase and part of the loss or theft||Accessories may be covered, but a high deductible could mean you’re paying out of pocket for the damage or loss|
How to Get Credit Card Cellphone Protection
Before you can get credit card cellphone protection, you must choose a credit card that offers the perk. There are only a handful of credit cards that come with the perk, including the Chase Freedom Flex, Wells Fargo Propel American Express, and Citi Prestige.
You don’t have to pay extra to your credit card issuer or enroll for cellphone insurance, but you do have to pay your monthly cellphone bill with your credit card. Coverage may be suspended any month you don’t pay your bill with your credit card.
Set up your bill for automatic payment to your credit card and you won’t miss a month of coverage. Plus, if you’re using a rewards credit card, you can earn rewards on your payment.
How Do You Make a Claim?
If your credit card issuer provides secondary coverage, you’ll submit the claim to your primary insurance provider first (e.g. insurance from your cellphone provider, homeowner’s, renter’s, automobile, or employer’s insurance.)
Once your primary insurance provider has covered its share, or if you have no other insurance, you can start the claims process by calling your benefit administrator at the phone number provided with your credit card agreement. You may have a limited amount of time to file a claim—typically 60 to 90 days after the incident.
To submit a claim, you’ll need to provide proof that you paid your cellphone bill with your credit card in the month before the date of damage or theft.
The benefit administrator will also want to see proof that the phone you’re submitting a claim for is linked to your cellphone account. If this isn’t printed on your billing statement, you may be able to get it from your cellular service provider.
Once you’ve submitted all the documentation necessary to support your claim, it could take up to 10 business days to receive reimbursement, depending on the benefit administrator you’re using.
If your phone is stolen, you may have to file a police report within 48 hours and you’ll need to submit the police report with your claim. For claims involving phone repair, be prepared to submit a repair estimate.
- Cellphone insurance is an automatic benefit with eligible credit cards when you pay your monthly cellphone bill with your card.
- Credit card cellphone insurance is often a secondary coverage benefit, which means you’ll have to make a claim with your primary insurance first, if you have it.
- Be prepared to submit documentation of your claim once you contact your benefit administrator