Understanding the Difference Between Warranty and Insurance

You may have heard a lot of talk about Apple and AT&T’s stance on insurance coverage for the iPhone (their stance being that they don't offer it). As unfortunate as that may be for those with a displayed tendency for damaging their cell phones, there are alternatives to explore.

Both AT&T and Apple will remind you that even though they don't offer insurance for the iPhone, extended warranties are available. The iPhone comes with a free one-year warranty that can be extended to two for an extra $69. It’s important to differentiate between a warranty and insurance, especially when investing in a gadget as costly as an iPhone.

Warranty Coverage

By definition, a warranty is a contract that promises complementary replacement or repair if the covered product stops working properly as a result of poor workmanship or a flaw in the design. The coverage expires after a set amount of time and anything that occurs after that is up to you to pay for.

Insurance Coverage

Insurance is what you pay for to make sure you’re covered in the event of unforeseen circumstances such as accidental damage, liquid sills, or theft. One of the biggest dilemmas facing iPhone customers is the high cost of replacing the phone in the event of any of the above situations.