Credit card cell phone insurance compared

These days, your cell phone may be among your most expensive possessions. Having coverage in case of damage or theft can be worthwhile for those who anticipate being prone to damaging their phone and/or who would appreciate some peace of mind about the cost of replacement in the event of damage or theft. Luckily, a number of rewards credit cards offer strong cell phone insurance coverage as part of their regular suite of benefits.

Previously, I wrote about one of my experiences using credit card cell phone insurance protection a couple of years ago. While my claim was ultimately approved, I came to the conclusion that it wasn’t really a win given that I had made a poor choice in terms of which card I used: at the time, the card I used had a large deductible and the repair cost of my phone was low. I’d have been better off self-insuring and earning more points per dollar on my bill. In the time since then, I have made a couple more claims (including one purchase protection claim and a couple of phone damage claims….we had a couple of bad years on phones). I also added a number of lines through T-Mobile promotions and I now have 9 lines on my cell phone plan. Quite a few of those lines now have late-model flagship phones on them, so the value of cell phone insurance is growing in my family with a greater likelihood of one of us breaking a phone now and then. Choosing the right card to use for my bill matters in terms of having sufficient and useful coverage, though one has to consider the value of additional rewards sacrificed.

This post includes an easy reference chart and is meant to be a quick-reference resource for what you need to know about cell phone insurance.

Credit card cell phone insurance comparison chart

Credit card cell phone insurance basics

As you can see in the chart above, there are a number of credit cards (and even debit cards and secured cards in some cases) that offer cell phone insurance, but that insurance is not created equally. The cap per claim and the cost of deductibles really vary.

Most cards require you to pay your monthly bill in full with the credit card providing coverage. You do not need to have purchased the phone itself with the credit card (in all cases of which I am aware) but rather pay the monthly service bill with it.

When coverage begins varies. With some cards (like the Chase Ink Business Preferred card), coverage begins the day after you pay your cell phone bill and continues through the end of the following calendar month. Other cards (like the US Bank Platinum card) have coverage begin on the first day of the next calendar month after you pat your bill. It is worth confirming how coverage works with your chosen card before you need to file a claim.

Will cell phone coverage apply if you only pay part of your bill with your qualifying card?

Officially, terms of cell phone insurance benefits almost all require that you pay your cell phone bill in full with the card offering coverage. Furthermore, as mentioned above, coverage on most cards begins on the 1st of the month after the month in which you pay your bill (be sure to check the terms on the specific card you intend to use as this is a generalization).

Many readers have wondered whether coverage would apply if you have used more than one card to pay the bill. For instance, the American Express Business Platinum card offers a monthly $10 credit for wireless services. Some readers have more than one Business Platinum card and may wonder whether making payments with more than one card will disqualify them from coverage. Sometimes we see other promotions pop up where you can get a better return or credit on another card.

Ultimately, whether or not your claim qualifies for coverage is going to be up to a claims adjustor / benefits administrator. In my experience, I have been covered when paying the entire amount shown on my monthly bill at the time it generates. In the past, I played that this way: I paid my bill in full with a card that offers cell phone coverage. Then, after my bill has a $0 balance, I make any additional payments. For example, imagine that my monthly cell phone bill is $100. I will auto-pay that bill with a card that offers cell phone coverage. Then, I may use a Business Platinum card and make an additional $10 payment, bringing my cell phone bill balance down to -$10. Then, when my next monthly bill generates, that -$10 balance gets carried forward and the total shown on my new monthly bill is $90 due to the negative balance carry-forward. I then pay the full amount billed to me ($90) on a credit card offering cell phone protection. Later, I repeat the $10 extra payment. I can’t guarantee that this won’t disqualify you from coverage, but I had to make a claim and I submitted my bill, which showed the total due at the top and the balance forward carry-over beneath that, and my credit card statement showing that I paid the amount billed to me and my claim was approved. Your mileage may vary.

Additional thoughts about credit card cell phone insurance

The final two entries in the chart above are for World and World Elite Mastercards. That’s because Mastercard added cell phone coverage to World and World Elite cards a couple of years ago. It wasn’t previously clear which specific cards were eligible, but now you should be able to enter your card number at https://us.mycardbenefits.com/ to see eligibility for World or World Elite benefits.

At least some cards that do offer protection do not make it particularly clear. This coverage should be found somewhere in your guide to benefits if your card offers it. That said, how many of us keep the guide to benefits handy? Some issuers make that guide to benefits available online, but not all do.

That makes this cell phone protection particularly challenging: it is possible that you have cards in your wallet that cover cell phone protection without an easy way to know it. The chart above shows cards that are known to carry coverage, but it is certainly possible that additional cards offer coverage.

Furthermore, coverage limitations vary in ways that may be significant to you. For instance, the Chase Freedom Flex card specifically excludes damage that is purely cosmetic, including cracks in the screen that are two inches long or less and do not interfere with the phone’s ability to make or receive calls. The wording there was particularly surprising: it is clear that if your phone can still make and receive calls, the damage could be deemed cosmetic even if it interferes with some apps or being able to use sections of your screen that aren’t required to make or answer calls. I don’t know how closely the benefits administrator will follow the letter of the policy as I imagine you’ll be getting your own diagnostic estimate in most cases, but it is an interesting limitation nonetheless.

If you still have the Guide to Benefits that came with your credit card, hopefully you can find cell phone protection details there. And in the case of many of the cards in the chart above, you can easily confirm coverage information on the issuer’s website.

I find it very interesting that the Navy Federal Credit Union secured credit cards offer cell phone insurance. Secured cards are for those building or rebuilding credit and therefore require a security deposit, which should make a secured card easy for almost anyone to get. I would therefore think that a Navy Federal secured card may be a great choice for a student paying for his or her own cell phone bill since I imagine they might be able to get this card even if they aren’t yet able to get some of the more rewarding cards in the list. That said, a student following Greg’s blueprint should quickly be eligible for something better.

Bottom line

Credit card cell phone insurance is a benefit that is being extended on many credit cards. This makes sense; in many cases, the most expensive / valuable item people carry with them day-to-day is their phone. Having coverage in case of damage or theft can really help ease the sting in cases where your phone is completely destroyed. On the other hand, you have to consider the deductible and coverage limits as they relate to the cost of repairing or replacing your phone — and the category bonus you may be able to trigger on a credit card that doesn’t offer cell phone insurance. Some will prefer to self-insure and use a card that earns an excellent category bonus, like the Chase Ink Cash credit card (which earns 5x on wireless services) rather than worry about insurance. It is worth running the numbers to consider how much you sacrifice in potential rewards by using a card that earns fewer points to pay your bill. On the other hand, if you have a number of expensive phones on your plan, you may be happy to trade a few extra potential points away in exchange for coverage that could save you a bundle. Indeed, over the past couple of years, I came out well ahead by being covered by my credit card.

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