iPhone Insurance: Are We in Good Hands Yet?

State Farm offers iPhone insurance.

Within the span of the weeks since I last wrote about the iPhone, its ubiquity has grown even more. Sales are through the roof. iPhones and PDAs have been used in jury trials or should I say mistrials. Half of all web mobile device traffic is conducted on iPhones. Applications are blossoming. More goodies such as the 3.0 OS are in the pipeline. Even my die-hard Verizon holdout friends have made the switch to the network that constantly drops calls.

I've settled into a comfort, perhaps even complacency, with the iPhone of late. I used to be a worrier about not being contactable. When I used to travel I used to fret about not having my laptop along. Now I could care less; I still have access to my email, news and AIM/Gtalk via the iPhone. In fact, my laptop's power supply has been broken since November and I am only now getting around to replacing it. The comfort of being enabled and connected by pulling out this amalgam of plastic, silicon, metal and glass is both a blessing and curse. Good in that you can be contacted almost always, but bad because you can almost always be contacted!

But more practical concern is that iPhone has become increasingly valuable as a repository of, well you and your information. Losing it could be costly in terms of personal information in the hands of a stranger and it can be costly in real money terms. Being a risk averse lawyer I've taken the step of having a passcode on my iPhone. At least I have a fighting chance at protecting my information. But, if an iPhone is lost or is stolen, it would cost $500 to replace it. Neither AT&T or Apple sell insurance or has a non-warranty replacement plan. Also, iPhones are not typically covered under your homeowner's insurance unless it is subject to theft or fire. So when ill befalls your iPhone who do we look to?

Recently, thanks to a targeted Facebook ad, I switched to State Farm for my car (the Good Neighbors slogan people) and found out that there is such a thing as iPhone insurance against loss or theft. Praise be State Farm.

So the logistics: State Farm sells iPhone insurance so long as it is tied to a personal effect like a laptop or something like a musical instruments (bicycles do not count sadly, but furs do apparently). The premium for my laptop and my iPhone (16 GB) was $35 a year. It makes sense that someone is finally selling iPhone insurance because they are everywhere. It must also be a good market sector to get into - the moral hazard is relatively low now because of people are used to safeguarding their iPhones, lest they have to bear the costs of replacing it. Now, there's one less thing to worry about. Hope I'll never have to use it.

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Phones
About the author

    Kevin Ho is an attorney living in San Francisco. He's from Iowa originally where he got his first Atari computer when he was little and remembers using the Apple IIGS. He is PC-user but secretly a Mac person in the closet as evidenced by many an iPod cluttering his desk drawers. He'll be writing about his experience with the iPhone. Disclosure.

     

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