I’ve never thought cell phone insurance was necessary. Technology advances so quickly that before we can even get value from the phone’s insurance, we’re buying a new version.

My Recent Mishap

Last week, I clumsily knocked my iPhone into the kitchen sink, full of soap and water. I took it out as quickly as possible, dried it off, and even consulted friends and the Internet for fail-proof solutions.

Sadly, after spending $43 trying to have it repaired, it was deemed “not fixable.” Because I didn’t have a warranty or insurance, I was left with only a few options:

• Purchase a new iPhone for $650 retail
• Sign a new contract and add a line to my existing service for $303
• Purchase a pay-as-you-go phone and card for $121

So, I’m the proud new owner of a pay-as-you-go phone, and will wait until December – when my contract automatically renews – to get a discount on a new phone.

Total expenses: $164. If I had cell phone insurance, which costs between $5 and $10 per month, I would have paid $50 for the deductible, and a new phone would have been in the mail within 2-3 days.

Depending on your phone’s insurance plan (and how careful you are with your phone!), you might find yourself paying a lot more to replace a phone than you would if you had just bought insurance to begin with.

What About the New iPhone 4S?

The new iPhone 4S was released today, and there are lots of insurance options for that. Apple now has “AppleCare+” insurance, and Verizon, Sprint and AT&T all offer insurance options of their own. There are also third-party insurers, like SquareTrade and Worth Avenue Group.

Sprint, AppleCare+ and SquareTrade are the cheapest options at $4.13 per month. Worth Avenue Group and AT&T’s insurance policies are each about $7 per month, and Verizon tops out as the most expensive at $10 per month.

All of these cover pretty much everything but theft and loss, unless you bought your iPhone used. (Refurbished iPhones are also eligible for insurance, in most cases.) Most providers also give you 30 days from the time you get your iPhone to enroll, except you’ll have to drop into AppleCare+ and Sprint immediately upon purchase. Worth Avenue Group will let you enroll anytime.

The cheapest options still add up to about $100 extra over the next two years, which is the length of time most of these policies allow. The most expensive policies allow you to add a third year of coverage. We’ll leave the question to you:

What do you think about iPhone insurance? Is it worth having, or just an added expense? What if you have another kind of phone? What’s your experience been? Weigh-in with a comment below.

Carrie Smith is a PerkStreet Customer Columnist who has worked as a freelance Certified Bookkeeper for nine years and as a Tax Specialist for four. She specializes in small business and oil and gas accounting. She has written several finance and accounting articles at Hubpages.com, and also writes regularly on her own blog CarefulCents. Follow her on Twitter @applecentsmith.

Photo: axbom