The question is: Can I buy a protection plan for my used phone?
Yes. But it’s difficult. There aren’t many cost effective options for owners of used phones.
There’s a reason for this: most protection plans are built for new phones.
To understand why the market for used phone protection plans is so tough, you have to understand how companies have designed their plans for new phones.
How Do Mobile Phone Protection Plans Work?
Protection companies design their plans and rates similar to how insurance companies design their policies.
Insurance companies must take in enough in premiums (the term for insurance fees) to be able to pay claims. Think about car insurance. Everyone pays a premium based on their risk profile. Everyone’s premiums are pooled to create a ‘loss reserve’ to pay for claims. If 30 people pay $1,000 each in premiums, then the loss reserve can, for example, cover one totaled $30,000 car. However, if everyone had a total loss, the company would be unable to pay all the claims.
Insurance companies know the data. They know everyone won’t make a claim. In fact, they are betting on it. Premiums for customers who don’t make claims subsidize the customers who make claims. It may not seem fair when you go years without a claim, but when something bad happens, you’re certainly thankful the protection is there.
Protection plan companies think the same way. They know the stats on phone breakage and malfunctions well enough so that they can offer consumers protection plans that provide relief from costly repairs or replacement costs for accidental drops or spills.
Why Should You Buy A Protection Plan on a Used Phone?
Just because your phone is used doesn’t mean it isn’t worth protecting. Nowadays, phones play a important role in our professional and personal lives. Losing or damaging one is more than just a simple inconvenience, and it can be an expensive one at that.
Having the peace of mind to know that your phone is protected in the event of damage or loss is important, especially considering that consumers break 50 million phones every year in the U.S. alone!
In order to truly leverage the power of protecting your used phone, you need to understand what options you have, how they work, and what you can do to make sure you get the most out of your plan.
Why is it So Hard to Find A Used Phone Protection Plan?
All this data is built off of new phone stats.
Protection companies have analytical models to demonstrate how likely it is that you will drop your phone and the screen will shatter, or how likely it is that the batteries will give out.
Here’s an oversimplification: if they determine there’s a 5% chance that you’re going to crack your screen, they charge you the equivalent of 10%. That’s how they spread the risk. They find a million other new users, apply the data, and calculate the premium.
1. Assessing the Shape and Longevity of a Used Phone is Difficult
But how do you crunch those numbers on used devices? What’s the factor you apply to battery life? How do you access when a speaker will blow out across hundreds of used phone models, that have each been used differently?
This is a problem for used phone insurance and protection plans, and why there are not many on the market. Calculating risk is difficult for companies to do unless they physically have the phone and can use diagnostic tools to assess its condition.
The other sticking point in creating a plan is planning for fraud protection.
2. Protecting Against Fraud Can Also Be a Problem
How do you prevent a customer from buying a protection plan on a broken phone, then cashing in on the repair or replacement?
In order to try and protect against fraud, almost all phone insurance companies make you buy at the point of sale. They know the condition of the phone when it is in the box as you leave the store. Forcing a purchase before you leave the store helps them to protect against fraud, but it also limits your options.
This tips you off to another feature that drives new phone protection plans. They are based on extended warranty models for other electronic devices. Sometimes identifiers are not available for cameras or TVs or stereo equipment, so having that receipt in hand verifies the item.
The beautiful thing about phones is that every phone in the world that connects to a network has a unique identifier. So you could confirm that the phone you protected is the one that was returned for repair.
However, most phone protection plan companies do not leverage this data to help them create insurance plans based on data. This leaves consumers with few options to insure their phone, and even less control over the pricing of their policies than other types of insurance plans.
With the used smartphone industry growing like wildfire, there needs to be a better way to get protection for your used phone.
3. Finding Coverage Beyond 30-45 Days After Purchase is Nearly Impossible
Almost all of the phone protection plans on the market require you to register your phone within 30-45 days after making a purchase, otherwise, you won’t be eligible for a plan. This protects the plan provider from fraud, but for many mobile phone owners, this prevents them from getting coverage.
4. Low Competition Leads to Higher Prices for Consumers
Another huge problem with the current used phone protection plan market is that due to the lack of options on the market. The ones that are available are often expensive and not customizable.
For instance, you may have a $400 phone that you need coverage on, but you are paying the same rates as someone with a $1,000 phone because most insurance have yet to figure out a pricing model that makes sense across such a broad market with so many options.
5. Current Protection Plans Are Built for New Phones
The current protection plan model really only helps people who have new phones. Not only is this true because of the very strict conditions you must follow in order to secure coverage, but also because almost all pricing models are the same across the board.
What’s the Solution?
At the end of the day, the way the current used phone protection plan market is set up is not very effective. It leaves tons of gaps in coverage, few affordable and truly helpful options, and little to no option for the customization of protection plans.
So, we created TessaB Protect – the first used phone protection plan platform built entirely around your phone, your coverage needs, and your budget.
Let’s see how it compares to the competition and why we plan on making big waves in the used phone protection plan market with our TessaB Protect platform.
5 Best Used Phone Protection Plans on the Market
Recently, several companies have jumped into the used protection plan market. Some have already come and go due to offering policies that were too cheap to keep the company afloat in the long run. While cheap is good for you, too cheap can be dangerous and leave you without coverage when it comes time to make a claim. That is why we created this list of the 5 Best Used Phone Protection Plans on the market that you can trust.
1. TessaB Protect – The Best Used Phone Protection Plan on the Market
Custom Pricing Model Built for You
Pricing is tiered, based on the purchase price of your phone. By pricing this way, TessaB is able to bring a more affordable product to the marketplace – one that is fairly priced for the type of phone you have. Savings can be more than 50% compared to other providers.
Quick Claims Processing Time
Because we have a steady supply of high-quality pre-owned phones, repairs are not necessary when a protected phone breaks. Simply return your broken or damaged device and a replacement is shipped to you immediately, and arrives within 2 business days of claim approval.
Get Coverage Today – Not in 30 Days
Probably the biggest pain about purchasing protection for your used phone is that no matter where you purchase it, you will have to wait 30 days after purchasing coverage in order to be able to make a claim. This is because a lot of fraud happens in these markets, and protection providers need a way to protect themselves against fraudulent claims. Sadly, it means the consumer pays the price once again.
In our eyes, this isn’t right, and it also isn’t necessary. Let’s be honest, if something is going to go wrong with your used phone, it will be within 30 days of you purchasing it. Heck, you’ll probably notice in the first 6-12 hours. And we live in a time where you can’t exactly afford to wait 30 days to make a claim on the insurance plan you are still paying for, and then another 45-90 days for the claim to go through and payout.
Cover Phones Consumers Already Own
Lastly, TessaB Protect will soon begin offering coverage to phones consumers already own – an industry first! Later this year you’ll be able to simply download the TessaB app, run diagnostic tests in order to assess your phone’s condition, and get a customized phone protection plan based on your specific phone.
2. Mobilio – Great Used Phone Insurance with a Waiting Period
Mobilio solves used protection by creating a time buffer between purchasing coverage and the activation of coverage. Coverage does not begin until 30 days after coverage purchase, and it must be fully operational with no damage at that time.
3. Swappa – Alright Coverage, But A Lot of Gaps
Swappa is an online used phone retailer. Today, they offer protection plans on the phones they sell. Their pricing is as follows:
- $50 / year for devices up to $300 in value
- $60 / year for phones priced from $301-$500
- $70 / year for phones at $501-$1,000
The plans cover accidents and repairs with $50 deductible. LCD damage and water damage are covered up to the value of a new device.
One thing to note is that this type of insurance is very limited in terms of coverage. A lot of the things they exclude coverage for are often unavoidable and affect the overall performance of your phone.
Also, you can only purchase this coverage if you have bought a phone through them. This does not offer a viable solution to someone who has a used phone from another reseller that needs protection.
4. Warranty Life – Slightly Expensive, Limited Coverage
Warranty Life is the company Gazelle uses to offer accidental and mechanical breakdown protection for used phones.
The deductible is $50. There is a 30-day waiting period for coverage on mechanical issues. Accidental damage coverage begins on day one.
Pricing is based on the purchase price of the phone:
- $500 phone – $100 per year
- $750 phone – $110 per year
Once the value of the phone goes over $1,000, normal protection plans are not offered. The best you can find is $100 worth of screen protection for $79 per year – which is hardly worth it.
5. SquareTrade – Great Coverage, But Only for Specific Cases
SquareTrade may be the most popular stand-alone product for used phones. They are built on an insurance model and owned by Allstate, so you can trust their customer support, reliability, and payouts. Having that background of data analytics and pricing sophistication has helped them to stay afloat and flourish in this difficult industry while providing excellent service.
SquareTrade protects both new and used devices. Their base plan does not include theft and loss, but you can upgrade for additional coverage which is pricey.
Not just any used device can be protected. The phone can be used when it comes to SquareTrade, but the phone must have proof of prior coverage.
So, you may want to do some research to figure out if your used phone is eligible for coverage from SquareTrade. On their site, they have this message:
“While most SquareTrade Protection Plans only cover new items, there are used or refurbished items that we do cover, including: Mobile phones that were insured through a service provider up to the date you purchased your SquareTrade warranty. ”
If you buy used, you must prove it was previously insured, making it difficult to get coverage from them, but not impossible. This basically eliminates being able to protect a phone from the secondary market.
Final Analysis – The Best Protection Plan for Used Phones
When you purchase a used device, do your research on available protection plans. They can be hard to find, and you need to investigate what the terms and conditions are in order to make sure there aren’t loopholes that can void coverage.
In order to make sure you get the best coverage for your used phone, we recommend that you take the following steps:
- Examine what the monthly cost is
- Consider the deductible
- Look at what each plan covers
- Assess whether it is worth it in the long run
Companies are beginning to figure out how to price and structure plans for used phones. The industry is right on the edge of being transformed with new products that put power and choice back in the hands of consumers.
Overall, if you are considering purchasing used again in the future, or have already purchased a used phone and are looking for a protection plan that covers it at an affordable price, TessaB Protect may be right for you.