A few months ago, I wrote a post explaining how the GP family was able to go from 2’178.- CHF/year to 239.40.- CHF/year in cell phone costs. At the end of the post, I had quickly talked about cell phone insurance with the promise to make a dedicated post. Promise made, promise kept!
In this post, I will try to evaluate the pertinence of a cell phone insurance. Before starting, I would like to specify that as an individual, I don’t subscribe to this kind of insurance for the simple reason that I only buy low-cost phones under 300 CHF, but new in order to benefit from the manufacturer’s warranty (for what it’s worth…) of 2 years on the electronic equipment. If I break my phone, well, I’m ready to assume the eventual repair costs, to try to repair it myself or in the worst case, to buy a new device.
When you buy a new cell phone, it is not uncommon that the seller, especially if you go to a shop in person, tries to add an insurance to cover some damage that could happen to your brand new phone. Offering this insurance at the time of purchase is a very well-tried strategy, because the customer who has just spent a significant amount of money on his new device will be more tempted to sign the contract. In this particular context, the insurance is done through the operator, which is not a very interesting choice. The seller is very motivated to sell you services or accessories, because he often gets “bonuses” on this kind of additional sale.
Coverage, premiums and deductibles
The insurance coverages are fairly similar and all protect against the most common problems, namely the screen shattering or the classic phone “splashing” into the toilet. So most of the insurance policies I compared cover risks related to drops, water damage and being crushed by a vehicle. Beware, it is common to see a clause that excludes theft and loss of equipment.
The premiums obviously depend on the new value of the device. For a device costing CHF 800.00, the average premium is CHF 10.00/month, or CHF 120.00/year. For the same device, the average deductible amounts to CHF 50.00 in case of damage. For these conditions, the customer will be reimbursed the new value of the device if necessary.
In the case that the device is stolen and used to make phone calls, the insurance covers the resulting costs up to 2’000 CHF. When you put it like that, it may indeed sound like a good deal, but after all, most people have subscriptions where national calls are included. This may be of interest if the thief uses value-added numbers or possibly calls abroad. However, this situation seems to me to be almost unfeasible nowadays, because the phone is in principle protected by an access code and the same goes for the SIM card.
Do you really need it?
Regardless of your opinion about the real need for such insurance, it is possible that you are already insured! How can you tell? Well, not many people know this, but it’s not uncommon for household insurance to include the same type of coverage for much less money than individual insurance. Just like tablets, desktop computers or laptops, cell phones are considered part of the household inventory. What is even more surprising is that for the same deductible and risk coverage, household insurance is less expensive than individual cell phone insurance. In some household insurance policies, theft and loss of equipment may even be included (often available as an add-on) and this also applies to sports and leisure equipment for the whole family!
For a family of 4-5 people, the choice is quickly made
The above examples are all the more significant in the case of a family of four or five. In a situation like this, including these insurances in the household insurance will cost between four and six times less than taking individual insurances!
Comparison – Samsung Galaxy S21 Ultra 5G
After the theory, let’s go to the practice by comparing different insurance for a high-end phone, the Samsung Galaxy S21 Ultra 5G, offered at a price of 1’299.- CHF (source: Swisscom).
Baloise offers an online calculator. Tip Top. My virtual interlocutor, Mira, asks me a few questions to estimate my premium.
Some details on the coverage modules:
- Damage: Coverage of repair or replacement costs in the event of a fall.
- Theft: Coverage of replacement costs in the event of theft.
- Warranty: During the two-year legal warranty period, we will cover the shipping and installation costs or any other delivery and travel costs. After expiration of the legal warranty, assumption of additional costs that were covered in the legal warranty.
For the amount of 198.- CHF/year, you are not insured against the loss of the device. This option will cost you CHF 42.00. In the end, you will have an insurance of 240.00 CHF/year for the total coverage. A discount of 44.- CHF is applied if you opt for a 2-year contract. What about the deductible ???
Just like Baloise, they offer an insurance calculator. Let’s go! We notice in fact that it is not possible to have an insurance dedicated to the mobile, but that they propose to cover this risk with the household insurance. This protection is directly included in the All-in-One package and it is therefore not possible to determine a precise figure for the “mobile” part.
So they are interesting, because they advise you to avoid cell phone insurance! Yes, it’s written on this page. If you don’t want to read all their blabla, here is their conclusion (only available in french, german and italian sorry).
Their speech is clear. They prefer to promote their household insurance than to offer a specific product for cell phones. I think it’s a good strategy and it allows them to highlight the advantages of their household insurance. They propose to include this coverage either with a complementary “Casco for sports and electronic devices” or via their “All Risk” package.
Here we can find two offers depending on the operating system of the phone:
- AppleCare + : Apple/IOS device only. Details of the services [pdf]
- Protect Clever : Android and Windows devices. Details of the services [pdf]
In both cases, coverage in case of theft is optional and there is apparently no possibility to cover the loss of the equipment. The rates vary depending on the price of the device. In the comparison table below, I would use an Android device costing more than 1’000 CHF.
Swisscom / Axa
Let’s take a look at what the national blue giant is offering. Their offerings are pretty straightforward and consist of two variants:
- Protection Plus, up to CHF 849.00: deductible of CHF 70.00, premium of CHF 10.00/month
- Protection Plus, from CHF 850.00 and above: deductible of CHF 100.00, premium of CHF 15.00/month
Both variants offer the same coverage: dropping and breaking of the screen, water damage, abuse following a theft. Swisscom offers this service through the Axa insurance.
Here is the summary of the compared insurances for the mobile worth 1’299.- CHF
|Insurance||Deterioration||Theft||Warranty||Loss||Premiums||Total 1 year|
|Baloise||112.- CHF||82.- CHF||4.- CHF||42.- CHF||0.- CHF||240.- CHF|
|Mobilezone||149.- CHF||20.- CHF||N/A||not covered||60 – 150 (if theft)||169.- CHF (with theft)|
|Swisscom||150 CHF||included||N/A||not covered||100.- CHF||150.- CHF|
We notice that it is already not simple to compare the services… In some cases, it is really necessary to go and read the general conditions of sale to understand the framework and limits of the contract. The protections against misuse are especially vague, because it is not often possible to have an exhaustive list of cases taken and not taken into account. For example, is the purchase of paid applications covered? Are premium rate numbers covered?
For my part, I remain convinced that individual insurance for cell phones is absolutely not worth it! If you have a low cost device like me, I advise you to take care of it and to use it for at least 3 years in order to pay it off. If you are a fan of high-end cell phones, I let you make your own idea on the subject, but indeed, including a protection for a device costing more than 1’000 CHF in your household insurance could be judicious (but less judicious than opting for a cheaper device 🙂 ).
The option of including this in a household insurance policy is even more attractive for families, as the option is not proportional to the number of inhabitants in most cases.