New iPhone 4 insurance: with costs like this...
By Stela Roman
Asurion, an insurer of consumer-electronics products, has started a new policy that will cover iPhones that are lost, stolen, or damaged. Cracked screens, a common iPhone problem, will be replaced, even if the phone works.
The policy will cost $12 a month, with a $199 deductible for the latest model.
Replacing a phone can be very expensive. Even if the iPhone 4 costs $199 or $299 with a two-year contract with AT&T, customers would have to pay the full retail price of $599 or $699 to replace a phone in the middle of the contract.
Repairs aren't very convenient either. Tekserve, an Apple retailer and repair shop in New York, charges $149 to replace a cracked screen and $99 for a broken microphone or charging port.
"These policies aren't worth it," said Mike Gikas, senior editor of Consumer Reports magazine. "You are paying more than the phone is actually worth if you lose it later in the contract."
But Asurion spokesman Tim Stadthaus said the savings over buying a new phone, if lost, makes the policy a good value. "There is a high demand for a quick, easy, lower cost way to receive a replacement," Stadthaus said in an e-mail. "Consumers want the peace of mind of knowing that for loss, theft, damage, plus out-of-warranty failures, they have a comprehensive solution."
Apple also sells its AppleCare extended warranty program at a one-time cost of $69 for the iPhone 4. But it doesn't cover loss , accidental damage or theft either. Apple extended warranty only covers manufacturer's defects and faulty batteries, for two years from purchase.
With costs like this...who needs insurance?
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