Many of the best credit cards on the market today offer built-in insurance protections, although the details of these coverages vary. For example, there are credit cards with travel insurance that protects against trip cancellations and interruptions, just as there are cards that offer extended warranties and purchase protection against damage or theft.
Credit card cell phone insurance is another major benefit offered by some credit cards, and this perk is relatively easy to use. However, not all cards offer this coverage, and those that do have important fine print and limitations you should know about.
What is credit card cell phone protection?
Credit card cell phone protection works exactly as it sounds. If something bad happens to your phone, assuming your situation falls in the guidelines that the credit card company has set out for you (like paying your monthly cell phone bill with your credit card), your credit card cell phone insurance will assist with the cost to get your phone fixed or replaced.
Just like other insurance plans, coverage terms will vary by credit card. Ultimately, this is why you’ll want to compare credit cards with phone insurance before you choose a new card for your wallet.
How does phone insurance work?
In most cases, credit card cell phone insurance reimburses you if your cell phone is stolen or becomes damaged in some way. A small deductible is usually required for each claim (usually $25 to $100), and the amount of coverage offered with each claim is usually capped at around $600 to $800. Of course, coverage limits and other fine print details vary by card.
Phillip Parker, CEO of an investigative agency that holds the card processing industry accountable for its impact on U.S. commerce, says the primary requirement for cardholders to use this coverage is paying their cell phone bill with the credit card that offers it. Another requirement is being able to submit information that helps support each claim you make.
“You must also report damage or theft within a specified period and provide documentation, like repair estimates, receipts or a police report for theft claims,” he says.
Does free cell phone insurance cover all types of cell phones?
As long as the cell phone insurance comes with your credit card and you meet requirements outlined in your policy details, you should be covered for any phone – and multiple phones. If you’re paying for your cell phone bill but also your spouse and kids’ phones and it’s your kid’s cell phone that is stolen or winds up with a cracked screen, for example, that should all be covered.
The same is true for older phones, as well as phones that use outdated technology.
Credit cards with cell phone protection
The best credit cards for cell phone protection offer primary coverage you can use even if you have other types of coverage for your phone, although most credit card phone insurance is secondary coverage. The best plans also have robust coverage limits for cell phone damage or theft, and they have low deductibles or copayments. Credit cards with the best coverage also let you use it more than once per year, although fine print with these plans also applies.
The chart below highlights some of the best credit card phone insurance you can get today, plus the limitations found with each plan.
Annual Coverage Limits
Deductible and Limitations
Up to $800 per claim and $1,000 per year
Two claims per 12-month period and $50 deductible per claim
Up to $800 per claim
Two claims per 12-month period and $50 deductible per claim (American Express is a CardRatings advertiser)
*Information related to Chase Freedom FlexSM has been collected independently by CardRatings and was neither reviewed nor provided by the card issuer.
How does credit card cell phone insurance compare to AppleCare+?
Credit cards and AppleCare+ will each reimburse you for things that go wrong with your iPhone. However, AppleCare+ is an extended warranty plan for Apple products that requires an additional cost, whereas credit card cell phone insurance is a benefit offered for free.
With AppleCare+, you might even wind up spending $199 or even $299 per year. How much you pay depends whether you want coverage for accidental damage or also coverage for loss and theft. Of course, AppleCare+ also comes with additional customer support for iPhone users, including 24/7 priority access to Apple experts via chat or phone, same-day service in many parts of the country, express replacement service and other benefits you don’t get with credit card phone insurance.
What you need to know about credit card cell phone protection
If you have been looking at credit cards with cell phone protection, you should know about the steps you need to take for this coverage to apply. The following tips can ensure you get the coverage you need without any surprises.
- Pay your cell phone bill with your credit card. This protection generally only kicks in if you’re paying your cell phone bill with your credit card. If you wind up paying your cell phone bill through another payment method, credit card phone insurance won’t apply.
- Cell phone protection may not cover lost phones. Many credit cards with cell phone protection say they exclude coverage for phones that mysteriously disappear. If your phone is lost and you can’t explain how it happened, your coverage may not work.
- Coverage may be secondary. Credit card cell phone insurance is usually supplemental coverage, meaning protection doesn’t kick in if the damage or theft could otherwise be covered by another insurance policy such as cell phone insurance programs or your homeowner’s, renter’s, automobile, or employer’s insurance policies. Supplemental insurance is usually only applied after all other insurance is exhausted.
- You’ll receive the value of your original phone or a comparable replacement. If you bought a cell phone for $400, you won’t get $1,000 to buy the latest model. You’ll receive $400, or you’ll get reimbursed for whatever it costs to get your phone back in working order (up to the policy limits laid out in your plan).
- Protection has its limits. In every case we found, the protection is limited to a certain number of claims (often two) per year. Also note that deductibles apply, although they tend to be fairly reasonable ($25 to $100 with most cards).
What’s not covered in credit card cell phone insurance?
Most credit cards with cell phone protection offer coverage that applies when your phone is damaged or stolen. However, some fine print details apply that can limit the value of your coverage. The following instances may not be covered by your plan, so make sure to read over the fine print for your card and policy.
- Cell phones purchased for resale, professional or commercial use
- Phones that mysteriously disappear with no explanation
- Cell phones that are lost or stolen while in the care of a common carrier (e.g. postal service, airplane, delivery service, etc.)
- Cell phones stolen from luggage unless hand carried
- Prepaid cell phones and phones with “pay as you go” plans
- Cosmetic damage that doesn’t impact the use of the phone
- Damage or theft resulting from abuse, intentional acts or fraud
- Normal wear and tear
- Damage caused by earthquakes, floods or radioactive contamination
- Losses or damage that results from a cyber incident
What if my credit card doesn’t offer cell phone protection?
If your credit card doesn’t offer cell phone protection, you can purchase cell phone coverage on your own or opt to go without it. You can also sign up for a credit card with phone insurance and start charging your cellular phone bill to it each month.
Another option is checking whether your cell phone comes with a built-in warranty that can help with repairs or replacement if something goes wrong. Whatever you do, make sure you save your receipt and the product’s warranty paperwork. If something does go south with your cell phone, even without official cell phone protection, you will know who to call.
The bottom line on credit card phone insurance
Since credit cards with cell phone protection offer this coverage for free, it’s definitely worth using if you have it. You may even be able to justify signing up for a new credit card that has this coverage, especially if you also get to earn a credit card sign-up bonus and ongoing rewards while accessing other benefits.
Just remember that credit card phone insurance has its limitations, including annual coverage limits and a limit on how many claims you can file each year. Also note that you have to pay your phone bill with that specific credit card for coverage to apply.
