Updated on September 30, 2016

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Should I buy insurance for my new iPhone 7

You just put in an order for your free iPhone 7 with trade in, and now you are wondering if you should buy an extended warranty. Most people who do, will buy protection from AppleCare+, SquareTrade, or direct from the carrier. Which one is best?

Waste of money

In general, buying extended warranties are a waste of money. Many people lose the paperwork or forget they even have a warranty. Or, if something breaks and you manage to find the paperwork, these is often a big hassle or your problem is not covered. These policies are cash cows for the companies that sell them and often pay big commissions to the salespeople who push them on you for everything you buy. I have a rule of thumb – the more pushy the sales person the more you are about to get ripped off. Instead, I most often rely on my credit cards which provide an extra year on the warranty, for free. The warranty business is so profitable because of all these issues and gotchas so most people end up losing money by buying warranties (otherwise the warranty companies would lose money and be put out of business right?).

Worthwhile Protection

But this is different. Warranties can be worthwhile for many people, not just the clumsy? iPhones are very expensive, go with you everywhere and get a lot of handling and mishandling. Repairs and down time can get expensive. Credit card warranties are unlikely to help as they only cover repairs of manufacturer defect – not when the phone falls from your pocket and the screen shatters. Have you ever tried to catch a dropped phone only smack it father and harder accidentally as you tried to catch it? What's your worst phone breaking story?

Which is best?

SquareTrade is the best choice.

SquareTrade

Pros: Maximum of 4 repair incidents and they will repair ANY damage. You'll get double the incidents and BETTER coverage vs AppleCare+. The repairs can be done at any Apple store just like AppleCare+ or a local repair facility. SquareTrade's website does not highlight these differences nor does it include Applecare in its comparison table. That's strange because I think those are the biggest selling points vs its competition.

Cons: With Applecare you can get a screen repaired for a $29 deductible. SquareTrade's deductible is $99, but they might waive it like they did for my battery repair. They don't provide tech support.  Plans auto renew at the end of their term at $89/year until cancelled. I HATE auto renewals… I need to look into how to cancel that. One easy way around that is to use a credit card that you know you'll cancel or use a Citi virtual credit card # which is set to expire in 2 months.

AppleCare+

Maximum of 2 repair incidents. They do appear to cover drops and spills but the terms suggest they can deny your claim for things they consider “abuse, misuse”. Be sure to read the terms before buying AppleCare+.

$20 OFF SquareTrade

Use promo code FP20 or PHONE20 to take $20 off the regular price of $149. That brings the price down to $129…the same price as AppleCare+.

My personal experience

I have used SquareTrade, AppleCare+, and Sprint insurance in the past. All of them did what they promised. Most recently, I had my iPhone 6 battery replaced at an Apple store. SquareTrade not only covered it in full, but they waived the deductible if the total bill was under around $110. The bill was ~$80 so it ended up costing me nothing but a couple hours waiting at the Apple store. I also have a SquareTrade warranty for my MB Air.

Which are worst?

Let's start with which is the worst value in my opinion. Buying insurance from the carriers is the most expensive and usually the worst value. It's more expensive because it covers everything including lost/stolen phones. For example, with Verizon you pay $11 per month x 24 months. You are guaranteed to spend $312 plus if you have a claim, the deductible can be up to $200 if you lose your phone for a total of $512. You are almost prepaying for one phone replacement. If you never lose your phone, you've lost $512. Of course they limit you to how many phones your can get replaced. Most people are more likely to break something rather than lose their phone, so why pay for insurance you don't need? After a year or two your phone will be much cheaper to replace or repair. Lost/stolen iPhones don't have as much resale value as they used to (see many of iPhones on eBay now).

Note: Do not buy Squaretrade warranties from Amazon as you may buy the wrong one and end up with no coverage at all!

How to check how much AppleCare coverage is left?

Click here and enter your device's serial #