Protection plans for smart phones experience one of the highest attachment rates in the business today. Customers are keenly interested in this coverage because they know that if they break their phone or lose it, it could come at a significant cost and are seen by many as a worthwhile investment.
Carriers like to sell protection plans because it helps keep customers on their network. If a customer drops their phone and faces a $300 screen repair, they must decide whether to move carriers and get a new phone for a lower price based on a contract, or pay the $300 to fix it. Or worse, be stuck on contract with no phone because they couldn’t afford to fix it. Either way, no one wins.
In the case a customer loses their phone or has it stolen, this additional coverage ensures the customer will receive a replacement phone when an incident happens.
In all cases, in order to trigger accidental or lost or stolen claims, a deductible applies. Deductibles can vary based on the type of service coverage offered. For example, some plans offer advanced exchange support where a new or refurbished device is overnighted to the customer, while other plans require mail or walk in service.
Plans that include loss and theft are more expensive as new or like new devices are expensive when they need to be replaced. Also, because loss and theft is considered an insurance product in order to sell these legally, the people and businesses involved must meet certain regulatory compliance issues which add to the costs. Watch out for those companies that don’t do it right.
What it boils down to is a plan with higher service levels equates to higher associated costs and are more expensive.
We’ve all dropped our phones, perhaps they broke and are a real fear which we all have. Statistics also show, many phones are lost or stolen. It boils down to how we see risk.
Chances are you’re going to have an accident or have your phone go missing at some point, question is, can you afford that to happen?