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ConsumerWatch: Are 3rd Party iPhone Warranties Worth It?

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The Verizon version of the Apple iPhone. (Don Emmert/AFP/Getty Images)

The Verizon version of the Apple iPhone. (Don Emmert/AFP/Getty Images)

SAN FRANCISCO (CBS 5) – Whether you have an iPhone through AT&T or Verizon, replacing it can be costly. Several companies offer warranties, but are they really worth it?

Sam Rifkin has had bad luck with two iPhones, knows first hand the cost of replacing them. “I had one that was burned in beach bonfire and I had one that fell out of my pocket and fell into a gutter and was completely submerged in water,” he said.

Without insurance, Rifkin said it cost somewhere between $600 to replace a damaged phone. That’s when he said he stumbled across SquareTrade Warranties, a third party company that sells warranties.

Steve Abernathy with SquareTrade Warranties said the iPhone design is accident prone. “A third of iPhones will have some form of damage in a two-year life span,” he said. Abernathy adds 75 percent of failure rates with iPhones occur from dropping it or water damage.

But being insured by Apple doesn’t guarantee full coverage, Abernathy said. The $69 AppleCare extended warranty only covers manufacture defects.

Both AT&T and Verizon Wireless offer extended protection plans which cover accidents and theft, but they include a $200 deductible. With a third party insurance company such as SquareTrade, the deductible is $50.

Kent German with CNET said he is not surprised to see consumers buy warranty through these third party companies. “The only advantage of going with your carrier to get a warranty is that you’re sort of constricting it to fewer parties,” he said. “But it’s certainly not a danger to go outside that if the pricing is right and the terms are good for you, then by all means.”

German said protecting your iPhone is a good idea, whether you buy a bumper case or pay for insurance protection.

SquareTrade isn’t the only company offering warranties. There are companies like Worth Ave. Group, Safeware, Asurion, along with Best Buy. Keep in mind some plans won’t cover unlocked phones, international accidents or limit the number of claims.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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