If you’re reliant on your smartphone to get places, make purchases and plan out your days, it’s a familiar feeling of panic when your phone screen glitches or shuts off and can’t be brought back to life. As of this year, nearly 80 percent of Americans own a smartphone, according to the Pew Research Center. But if you have a credit card, there’s a chance you may already have insurance, as cellphone protection is a little-known benefit offered by a handful of credit cards. The benefit is a free alternative to cellphone insurance offered by service providers, manufacturers or third parties.
While the coverage offered by a credit card’s cellphone protection benefit may vary from card to card, the limits and protections usually aren’t as comprehensive as traditional cellphone insurance.
How Cellphone Protection Works
“The biggest thing to know about cellphone protection under a credit card is that you have to pay your monthly cellphone bill using that credit card every month to qualify for the protection,” says Ashley Dull, editor-in-chief of CardRates.com.
Coverage kicks in on the first day of the calendar month after you first pay your cellphone bill with your card. You must continue paying your cellphone bill with your card each month to keep the coverage active. If you forget to make your cellphone bill payment with your card one month, your coverage will lapse. Your coverage will resume on the first day of the calendar month after you make your next phone bill payment with your credit card.
You’ll want to take note of the coverage limits offered by a particular credit card. Rob Webber, CEO and founder of cellphone savings website MoneySavingPro.com, says, “The total amount you can claim per phone is quite limited.”
[Read: The Best Rewards Credit Cards.]
Most cards offer maximum benefits of $200 to $600 per claim and allow two to three claims per 12-month period. However, these limits won’t come close to replacing your phone if it’s worth nearly $1,500 retail, like some devices on the market today. For each claim, you’ll have to pay a deductible that ranges from $25 to $100.
Most cellphone protection benefits offer supplemental coverage, not primary coverage. If you have other types of insurance coverage for your cellphone, you’ll need to make a claim with primary insurance before you use your credit card’s cellphone protection benefit.
Potential primary insurance for your cellphone could include a traditional cellphone insurance policy, a renters insurance policy, a homeowners insurance policy, an auto insurance policy or an employer’s insurance policy, depending on when and where your phone was damaged or stolen. These insurance policies may come with higher deductibles that make it difficult to justify filing a claim for a damaged or stolen cellphone.
Ultimatley, Dull doesn’t recommend applying for a card solely because it offers cellphone protection. Instead, look for credit cards that best meet your financial needs and view cellphone protection as a secondary benefit.
The Limitations of Credit Card Cellphone Protection Benefits
Cellphone protection offered by credit cards is a great deal because it’s free. Unfortunately, there are quite a few things that aren’t covered. “Typically, credit card companies will cover you for damage or theft but not for loss,” says Webber. Credit card cellphone protection normally won’t cover the following:
— Accessories other than standard batteries and antennas.
— Electronic issues such as failure to charge a battery or battery failure with no evidence of physical damage.
— Cellphones that are lost or mysteriously disappear.
— Cellphones under the care of common carriers (USPS, airplanes or delivery services).
— Cellphones stolen from baggage other than baggage that is hand-carried and under you or your travel companion’s personal supervision.
— Cellphones that are rented, leased, borrowed or are received as part of a prepaid wireless service plan or pay-as-you-go service plan.
— Cosmetic damage that doesn’t affect the phone’s capabilities or functionalities.
— Damage or theft from abuse, intentional acts, fraud, war, confiscation by authorities, illegal activities, normal wear and tear, or floods.
— Replacement devices not purchased from a cellular service provider’s retail store, internet store or from an authorized cellphone retailer.
— Taxes, delivery charges and fees associated with the cellular service provider.
Make sure you understand exactly what your cellphone protection benefit does and does not cover. “Check the terms and conditions of the credit card so you don’t leave yourself exposed,” says Webber.
Filing a Cellphone Protection Benefit Claim
The first step to filing a cellphone protection benefit claim is figuring out who to call to start the process. When you initially received your credit card in the mail, you may have also received a guide to your credit card’s benefits. Your benefits guide will list who to call to start the claims process.
[Read: The Best Low-Interest Credit Cards.]
If you can’t find the guide to benefits or you can’t find the benefits number to call, call the number on the back of your credit card and ask to speak to the benefits department. They can transfer you to the correct department or give you the phone number to call to start a claim.
According to Dull, “Generally, you have to file a claim within 60 days.” The benefits administrator will ask for information about your claim. They’ll also send you a more detailed claim form you’ll need to fill out. After you receive the claim form, you’ll need to complete the form and return it within 90 days from the date of the incident.
If your phone was stolen or your claim is due to a criminal action, most cellphone protection benefits require you to file a police report about the theft within 48 hours of the phone being stolen. If you don’t file a police report within 48 hours, your claim may be denied.
Besides submitting a claim form, you may need to submit:
— A copy of the credit card statement preceding the date of your claim that shows your cellphone bill was paid using your credit card.
— A copy of your cellphone service bill that matches the charge on your credit card statement.
— A copy of your cellphone service’s device page that shows the type of phone associated with your account.
— A copy of the police report if the claim is related to theft or a criminal action.
— A copy of any other insurance claims related to the incident.
— An itemized repair estimate from an authorized repair facility.
— The damaged cellphone itself.
— An itemized receipt for the replacement device showing the replacement purchase was made at an authorized service provider’s retail or internet store.
Other Types of Cellphone Insurance May Offer More Coverage
Cellphone insurance offered by phone manufacturers and service providers often covers more than cellphone protection offered by credit cards, but at a cost. You can expect to pay $7 to $17 per device per month. Over the course of two years, that adds a total cost of $168 to $408 per device. In addition to the monthly fee, you’ll typically have to pay a deductible that ranges between $25 and $299 per incident.
While the extra cost is the big downside to traditional cellphone insurance, some cellphone insurance programs offer better benefits you can’t get with credit card cellphone protection. In particular, some cellphone insurance plans offer higher coverage limits per claim and the option to cover the loss of your phone.
You may want to buy cellphone insurance rather than rely on your credit card’s cellphone protection benefit if you have a phone that costs more than the credit card benefit’s coverage limits or you have a habit of losing your phone. “If you only have $200 worth of protection and your damage is more costly, you could find yourself in a bind,” says Dull.
Another option to protect your phone is an extended warranty. Extended warranties cover the same issues as manufacturer warranties such as manufacturer defects and malfunctions. These warranties don’t cover accidental damage caused by a user.
[Read: The Best Secured Credit Cards.]
You can often buy an extended warranty when you buy your phone. That said, some credit cards automatically extend the manufacturer’s warranty on purchases made with that particular credit card for free. The length, limitations and coverage of the extended warranty will vary based on the terms that govern your card’s benefits.
Credit Cards That Offer Cellphone Protection
These credit cards all offer cellphone protection as a benefit:
The Wells Fargo Propel American Express card and other Wells Fargo consumer credit cards offer a cellular telephone protection benefit that will repair or replace your original cellphone that is damaged or stolen. You’ll have to pay a $25 deductible and will receive a maximum benefit of $600 per claim and $1,200 per 12-month period.
The Uber Visa Card offers mobile phone protection of up to $600 for damage, theft or unintended separation from your cellphone when its location is known, but recovery is impractical to complete. There is a $25 deductible and there is a limit of two claims and up to $1,200 per 12-month period.
The U.S. Bank Visa Platinum credit card offers cellphone protection for damage, theft or involuntary and accidental parting of your cellphone up to $600 per claim with a $25 deductible. You can make up to two claims per 12-month period for a maximum benefit of $1,200.
The Fifth Third Bank TRIO credit card offers up to $200 per claim for damage, theft or involuntary and accidental parting of your cellphone. You must pay a $50 deductible and there is a maximum of two claims and $400 per 12-month period.
The Chase Ink Business Preferred credit card offers cellphone protection for businesses. You’ll get protection for damage, theft or involuntary and accidental parting of your cellphone. The benefit pays up to $600 per claim with a $100 deductible. There is a limit of three claims and $1,800 per 12-month period.
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