The true cost of a lost smartphone

This post comes from Jeanette Pavini at partner siteMarketWatch.

Say you just lost your wallet with $40 cash in it. You'd feel bad, right? There's the inconvenience of canceling cards, getting a new driver's license, etc. But what if you lost your wallet with $900 in cash in it, plus your address book and your bank passwords? That's what it's like when you lose your smartphone.

Now that really hurts.

How much does it cost to lose a smartphone? One of our readers found out the hard way. Her iPhone was stolen while she was on public transit. She didn't have phone insurance, her renter's insurance didn't cover the loss, and she was told if she canceled her phone contract, she would be liable for a hefty early termination fee. In the end, she paid a small fortune and learned a big lesson.

Some 60 million smartphones and cell phones are lost, stolen or damaged each year, according to Asurion, a provider of cell-phone insurance.

Your total cost will depend on your carrier, what kind of device you have and whether you're willing to settle for a reconditioned, used device or want a new smartphone.

If you lose your top-of-the-line iPhone, say, and want to replace it with the same device -- and you aren't eligible for an upgrade anytime soon -- you could pay as much as $849 for the device alone.

Here's a breakdown, based on the major carriers:

Sprint: If you have insurance through Sprint, you pay the deductible of $100 for smartphones and will receive a replacement phone -- probably a used, refurbished phone, not a new one -- without having to extend your contract. If you don't have insurance, you can buy a used device or a new one, and you will not have to purchase a new contract. I found a certified pre-owned Blackberry Curve 3G for $79.99 on the Sprint website. (Post continues below.)

Insurance offered through Sprint includes a free application with a device locator, data backup and lock-and-wipe capabilities. Sprint's policy is to not reactivate a phone that has been reported lost or stolen unless they are able to verify proper ownership.

Verizon: With insurance through Verizon, you can pay your deductible of up to $199 and get another smartphone -- again, it won't be a new phone -- without having to sign a new contract. If you don't have insurance and you want to stay under your current contract, you will have to buy a new or refurbished smartphone. Verizon sells refurbished phones for $300 to $500.

The company offers a free backup-assistant app that gives customers access to the contact information stored on their phone. If you have the company's insurance, you'll be able to locate your phone on a map, send a phone alarm, remotely lock your phone to secure your data or remotely wipe your contacts out. If you put your phone on the company's "lost or stolen" list, Verizon won't activate the phone if someone brings it into a store.

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AT&T declined to answer specific questions and referred us to the company website. AT&T, on its website, advises customers to report a lost or stolen phone and suspend their service, buy a new device and then reactivate service. Once suspended, your wireless service cannot be used to make or receive calls, forward calls, retrieve voicemail, or access data services. Suspending your wireless service does not release your wireless phone number, and you will be charged the monthly recurring fee while service is in a voluntary suspended status.

Keep these tips in mind if your smartphone goes missing:

1. Many new smartphones, including the iPhone, come with a "find my phone" application that allows you to locate the device, regardless of your carrier or insurance. See whether your device has this option and activate it.
2. Your smartphone insurance likely does not cover a brand-new replacement device. You'll get a reconditioned phone, and it may not be identical to the one you lost.
3. Keep track of when you are due for an upgrade on your carrier contract. You might be able to use an old phone until you qualify for the new replacement smartphone at a discounted rate.
4. Whenever you buy a new smartphone, hold on to your old device. If the new one is lost or stolen, that old iPhone or BlackBerry could come in handy.
5. No matter which carrier you use, treat your phone as stolen, even if you think it's only misplaced. It's not just a phone; it likely also contains important personal information, and phone and email contacts.
6. If someone makes unauthorized long-distance calls, don't believe it just because the carrier says it. You may not be liable for these charges, in fact -- probably are not, even if your carrier says you are until the phone is reported lost or stolen. For example in California, the Public Utilities Commission has a law stating that a "telephone bill may only contain charges for products or services, the purchase of which the subscriber has authorized." California consumers are not liable for unauthorized charges made from their stolen cellphones.
7. Beware buying smartphones from third-party sellers or from private parties via classifieds like Craigslist. These phones might be stolen or damaged and you'll have no recourse against the seller.

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