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If you accidentally damage your cell phone, the cost to fix it can easily run over $100. Mobile service providers offer cell phone protection plans (cell phone insurance). The cost for this protection plan varies between $7 and $15 per month. But you can insure you mobile phone for free by using the right credit card to pay your mobile phone bills every month. Cell phone insurance is a perk offered by many credit cards.
You will find below the best no-annual fee credit cards that offer cell phone insurance.
No Fee Credit cards offering cell phone insurance
Chase Freedom Flex℠
$50 deductible
Up to $800 per claim
$1000 max coverage in 12 months
Covers all phones listed on the phone bill
Maximum 2 claims in 12 months
No annual fee
Wells Fargo Active Cash(R) Card
$25 deductible
Up to $600 per claim
$1200 max coverage in 12 months
Covers all phones listed on the phone bill
Maximum 2 claims in 12 months
No annual fee
How does cell phone insurance work?
If your cell phone is damaged, the credit card company will pay the cost to fix the phone. To qualify for this benefit, you must pay your monthly cell phone bill with your credit card. If you use other ways to pay your credit card such as an ACH transfer from your bank, you will not qualify for cell phone protection.
What you need to know about cell phone protection
The terms of coverage vary between credit cards. But here is how most plans work.
- You will need to pay a deductible – usually between $25 to $50 for each claim.
- Coverage is limited to $600 to $800 per claim. Credit cards also have limits on how many claims you can make in a year and a maximum coverage amount for the year
- If your phone cannot be repaired, you will get a payment equal to the comparable retail value of the phone. If you paid $1200 for the phone, but it’s worth only $600 today in the market, you will be paid $600.
- When submitting a claim, you need to submit a copy of the bill from the mobile provider, your credit card statement showing that you paid the cell phone bill with the credit card, and a repair estimate.
- Cosmetic damages are typically not covered. If your phone can be used without repair, the credit card company is not likely to cover your claim.
- Chargers, cables, and other phone accessories are not covered
- The Protection plan covers theft, but not if you lose the phone.
- Cell phone protection coverage offered by credit cards is secondary coverage. This means that it will cover you after you exhaust your primary coverage (eg. cell phone protection plan from your mobile provider, home insurance in case of theft, etc.). If you don’t have primary coverage, the protection offered by the credit card company kicks in right away.
- Credit card companies use third-party companies to process cell phone insurance claims. So your experience will differ based on the third-party company your credit card chooses.
Fine print
Most credit cards don’t cover phones under prepaid or MVNO plans. But I know people with Visible wireless (a Verizon MVNO) who got their claim covered by their credit card. If you have a prepaid plan, call your credit company to confirm your cell phone protection coverage.
Bottom Line
Having a credit card that offers cell phone protection can save you hundreds of dollars every year. You should not get a credit card just for its cell phone protection perks, but these benefits are nice to have if the card meets all your points, miles, or cashback requirements. Every credit card has its requirements. So take the time to understand the terms and the benefits offered.
My Money Planet has partnered with CardRatings for our coverage of credit card products. My Money Planet and CardRatings may receive a commission from card issuers.