Cellular companies are usually the last to offer insurance. However, as the market has demanded that they be protected from broken and stolen devices, cell companies are beginning to see the light. Companies like Sprint now offer $11/month insurance on the iPhone that protects against any type of lost or damaged phone with a $50 dollar replacement fee (That sounds awesome right?). However, was this insurance created to help the customer, or make money off of Companies’ risk aversion?
Let’s say that you have 25 company cell phones in your business. The average insurance cost per phone is $8/phone. So the average cost for your business for the month is $200. That means your company’s cell phone cost for 6 months is $1200 dollars!
Let’s do a little more math to see if this saves you money. The average cost of replacement (smart) phones $425. Average deductible for a replacement phone is $100. If you lose 3 of the 25 phones in a six month period you still lose money buying the insurance. That’s because $1200 plus $300 in deductible is $1500. The purchase of 3 new phones costs $1275. So, unless your employees are using their phones as golf balls for the driving range, cell insurance is not the way to go.
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