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How Almost All of Us are Duped Into Paying for Our Cell Phones Twice

How Almost All of Us are Duped Into Paying for Our Cell Phones Twice

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I’ve just been duped. Lied to. Cheated…. You may be getting duped as well.

Yesterday, I dropped my iPhone 5 really, really, hard on a weird angle and the front split off from the back. It was toast. Totaled. Kaput.

So I pulled up my plan and called in for my insurance claim. I had been making all my payments on time and paying $10.00 a month for insurance. Well, Verizon sent me to their insurance provider Asurion. Asurion is the top cell phone insurance company out there.

Below you can see which companies use Asurion:

 How Almost All of Us are Duped Into Paying for Our Cell Phones Twice

Imagine my shock and surprise when Asurion’s teleprompter (not a real person mind you) told me that I owed them a $199.00 deductible. I tried pressing 0 to reach a representative, got hung up on, and called back trying to reach a person with no luck.

So I called Verizon. I told them, “Hey, I paid $10.00 a month for 15 months=$150.00 for insurance. Then when I tried to claim my insurance, Asurion said I have to pay another $199.00!?! This was never disclosed to me in the contract (come to find out hundreds of others are complaining online because the cost of replacement for certain phones is not listed in the contract). Had I known that the cost of replacement was so outrageous I would’ve never opted to pay for the ‘insurance’.” The Verizon rep said, “Oh, I’m so sorry, blah blah blah…” Then something he said really got me thinking. He said, “But if you think about it, Mam, it’s just like your car insurance. You have a monthly fee and when you get into a wreck or damage your car, then you have to pay a deductible.”

I calmly replied, “This is not like car insurance. Or home insurance! What kind of car insurance costs you 2% a month of your car’s total value? And then when you put in a claim they charge you another 40% of the price of the car?” I said, “In numbers, it would be like this. My phone was worth $500.00, and I’m paying $10.00 a month which is 2%. So say it was the same with car insurance. It would be like paying $300.00 a MONTH just to insure a $15,000 car which is $3,600. a year. And then when you wreck it and send in a claim your deductible cost you another $6,000.00 (or 40% of the car). No car insurance company out there makes you pay for 40% of the car when you wreck it. No home insurance makes you pay for 40% of your house if it burns down. But that is what your ‘insurance company’ is doing. This is no insurance plan.”…. silence… no response then, “Well I’m sorry. But there is nothing I can do.”

…Seriously, it cost me $350 to replace an iPhone using the ‘insurance’ when I had originally paid $199.00 for it. Sure, Apple says they are ‘worth’ $700.00 without a contract but I looked at buying a new one outright, and it was only $400.00. And I’m sure Asurion is getting a heck of a better deal on iPhones than the average Joe.

Had I broke my phone 7 months down the road the insurance company would have made a profit off of my claim. Insurance companies make a profit. That is no hidden secret and I’m not against that. What I am not in favor of is that they are charging me an insanely huge percentage to replace the item that I’ve chosen to insure. Not only are they making a profit off of everyone who isn’t making claims, but they are also most likely making a profit off of everyone who is.

Case in point. I’m a little embarrassed to admit this but my kid’s dad insured his phone for 26 months now. His payment was $6.00 a month for a $100.00 phone. We never put in a claim and after just running the numbers, I realized that we have already paid more than 110% for ‘insuring it’ than we did to buy it in the first place. If we did have to claim it (if it broke) we would end up paying another $99.00 for this model to replace it. Say his phone broke tomorrow and we made a claim, we would end up paying for his phone 3 times over!   As a business model, these companies are making bank. I gotta give them credit, this is a brilliant model. They say its insurance but the fees are so high on the claims I call it deceit.

Thanks to readers and further information I have, I have now realized that Asurion is replacing most damaged phones with REFURBISHED phones. So when you make the claim you HAVE to supply them with your damaged phone. They fix up your phone and then your old damaged -yet-fixed-up (aka Refurbished phone) gets shipped to someone who broke a similar phone.  Which illustrates the fact that this is even a WORSE deal that I originally thought.

So why do most cell phone owners choose to insure their phones? I think it because the charges seem minimal so it’s easy to justify. $10.00 isn’t that huge of a payment. But if you think about it, many of us are paying about $20.00-50.00 a month to insure our cars! So yes, $10 is a huge insurance payment for a phone, especially considering that if you do end up claiming it you still have to pay another 40% of what they claim is market value. Most likely it will end up costing you about what you originally paid for it with a contract.

I understand that people break their phones more than they crash their cars. That said, I’ve dropped my phone over a hundred times and it was only this once (when it fell from a pretty high spot to a hard floor, that it broke). I’ve had cell phones for over 15 years and this is the first one I’ve ever broke. As fragile as they may seem, if you use a really great case for it like this, and a screen protector like this, and are somewhat careful, most likely your phone is not going to break.

What I’ll do this time around is I will take that same $10.00 I was paying towards phone insurance and put it in a bank account or in a tin can.  If  I do end up breaking my phone, I’ll pull out that money I’ve saved and added it to what the deductible of the phone would have been had I gone with Asurion and buy myself a new phone for basically the same price. If I don’t end up breaking my phone, I’ll get to keep my money.

If your phones are insured, I’d recommend running the numbers and reconsidering the huge amount of insurance you are paying to Asurion and/or other companies. So unlike me and most other insured cell phone users, you don’t end up paying for your cell phone twice… or possibly even three times.

 How Almost All of Us are Duped Into Paying for Our Cell Phones Twice

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 How Almost All of Us are Duped Into Paying for Our Cell Phones Twice


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Tuesday 8th of February 2022

Verizon is shady... I was paying for insurance on phone ($7) and wireless insurance ($5) $12 per line. My hubby has it in his name & refuses to request a refund. Basically 2 - Note 10+ phones $25x24=600. These were 1200$ phones when new (2yrs). Naturally we pay off then I break phone (got run over in mud puddle). I paid $250 for a new replacement ($850). I get the phone and its locked! Yes its a refurb as its laser etched on back ASURION REFURB!!!! Clearly it was dropped (broke screen?) because the pen has scuffs on it! Ive lost allot b/c Google implementing caps & I only have whats on sd-card... Should get recovery included! Prob better off buying new phone or even different one. New Note10+ is ~$600 now NIB. If I cant unlock phone (extra 75$ & they made sure to update it to the latest software) itll go back & ill add another credit card. Not like I can really afford $250 cause rent is going up $200/mo! Sadly I could've saved that $ but prob would've spent it after the 24moinths & have No phone! Considering people who break phones on purpose & grossly careless...

thomas nunez

Wednesday 10th of March 2021

my humble opinion is paying for insurance is not worth it, you pay insurance for years and when your phone breaks you still have to pay a big amount of money to get it fix.


Monday 15th of March 2021


Richelle Burns

Saturday 6th of February 2021

I filed a claim and in my case the deductible ends up being cheaper than the phone's contract value remaining. Asurion said the phone would be an "insurance loss" and once I pay the deductible I no longer have obligation to Verizon. Sounded fair until Verizon claims that my contract remains in full force because the insurance covers repairs and replacement NOT the contract agreement of two years. This sounds like an illegal peactice where Verizon can "double-dip" and still charge me where insurance already intervened. Now that is an obvious crime.


Monday 15th of March 2021

Yeah, by them being separate companies it seems like they can cross their wires/policies and get away with it... sorry this happened to you.


Tuesday 13th of June 2017

I used to work for AT&T doing iPhone support. I would recommend insuring the phone for only the first 30-60 days. Phones typically change size year to year and our phone grip is muscle memory. If you suddenly carrying around a different size phone, you are more prone to dropping it. Most phones get dropped and broken in the first month or so.

If you only insure the first month, and then drop your new $700 phone, you are only paying a $200 deductible and the $10 payment to get your phone replaced. If it's one of the brand new models, you are likely going to get a new phone and not a refurbished one.

Anita Fowler

Friday 23rd of June 2017

Yeah that's a good point! I don't oppose to insuring a phone for the first little bit—esp with a new grip and it being brand-new. just don't forget to cancel

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