Free smartphone insurance?

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If you recently bought the iPhone 6, you no doubt were offered a chance to add on Apple’s insurance, AppleCare+, during the purchase. For $99, you get repair and replacement coverage for two years in case you damage your phone. But you only get to use the service twice, and each time you’ll pay a $79 “service fee,” plus tax.

If that seems like a lot to pay to protect you from your own clumsiness, there’s also private smartphone insurance, for which you’ll pay a small monthly premium.

Better yet, you could — for free — get some peace of mind that dropping your phone won’t take a huge bite out of your wallet.

Pay with plastic

A number of credit card issuers offer cell phone protection plans at no charge for customers who pay their monthly smartphone service bills with plastic. You do not have to purchase the phone with that credit card to be eligible. But remember to pay your credit card bill off each month, otherwise interest charges can quickly make this free service costly.

And the card companies don’t seem to care which brand of phone you own. So that means Android fans can jump on this service, as well.

Card issuers offer a range of maximum payouts, but the coverage details are pretty similar among the plans we reviewed.

The plans:

  • Cover phones that are stolen or damaged. Lost phones aren’t covered. You’ll need to submit a police report at the time of your claim if your phone was stolen.
  • Offer protection beginning on the first day of the calendar month after you pay your bill with a credit card. Plans terminate if you pay your phone bill through any other means, but protection is reinstated if you again pay with your credit card.
  • All include a deductible of between $25 and $50.
  • Limit you to two claims during any 12-month period.
  • Generally include both the primary phone line and one or more supplemental lines.

Top payouts

The maximum benefit per claim we found is $600.

Wells Fargo, the nation’s fourth-largest bank by assets, and First Citizens Bank, a Raleigh, North Carolina-based bank with 570 branches in 18 states, both issue credit cards that include a $600 maximum benefit protection plan.

Now $600, minus the $25 deductible in Wells Fargo’s case, isn’t going to cover the full replacement cost of an iPhone. The unsubsidized price of the iPhone 6 starts at $649.

But $575 is a whole lot better than nothing if your phone becomes inoperable after it bends in your pocket when you sit.

Hard to find, rarely publicized

Outside of Wells Fargo, most of the big credit card issuers don’t appear to offer this perk. But some community banks and credit unions do, although their maximum payouts tend to be significantly lower.

For example, Vermont State Employees Credit Union, which has nine branches, offers a maximum benefit of $200 per claim, as does TruMark Financial Credit Union, with 16 branches in and around Philadelphia.

And you’ll also have to watch out for the fine print.

First Citizens Bank included this passage in its FAQ on the protection plan:

I have a small crack on my screen. Can my phone be replaced?
Cosmetic damage or damage that does not impact the phone’s ability to make or receive phone calls are not covered.

So you’ll have to learn precisely what you’ll get in case of theft or damage before you can decide the value of these protection plans. On the other hand, free is free, right?

Does your credit card offer a cell phone protection plan? Have you used it?