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Tuesday, October 23, 2012

Should you buy an extended warranty for your phone?

Most mobile devices come with a manufacturer’s warranty—typically for one year. Often, you're given the option to purchase an extended warranty, which would cover manufacturer’s defects for some time beyond one year. Before saying yes to an extended warranty, read the fine print; it contains important information about what is and isn’t covered. Check with your credit card issuer, as some provide extended warranties on electronics you buy with the card. Phone insurance is intended to replace a cell phone that is lost, stolen or damaged. Premiums typically range from about $4 to $8 per month, and the deductible (the portion of the loss that you have to pay out of pocket) can be anywhere from $25 to $125, depending on the phone model. There can be a number of limitations to the coverage. For example, many policies state that the replacement phone can be refurbished rather than new, can be a different brand, model or color than the old phone, and might not be compatible with your current accessories. Before buying phone insurance, do a calculation to determine if you are better off just being careful with your device and putting aside the equivalent of the premiums and the deductible in an account so it’s there if you need it.