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The true cost of a lost smartphone

Losing a smartphone is a lot more hassle -- and costs a lot more -- than losing your wallet. Here's what to watch out for.

By MSN Money Partner Apr 11, 2012 2:11PM

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.


Image: Businesswoman on cellphone (© Corbis)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.

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.

More on MarketWatch and MSN Money:


Apr 11, 2012 7:00PM
Winki got enough spares from all my existing verizon lines and always keep the old phones
Apr 11, 2012 10:23PM
I'm sure there is enough technology to be able to locate those phones using gps so that if it were stolen you could find it, just like on an apple computer. I'm sure the cell companies like the insurance because they get to sell a new phone. Where they miss it is that the customer could have his life and identity stolen costing thousands and thousands of $ and countless days of worry for the person who lost their phone. I think it should become a mandatory protection offered by the cell phone companies to do for a person that cant find their phone or knows it's stolen.
Apr 11, 2012 7:34PM
hmmm i wonder why there was nothing about t-mobile..just lost my smartfone last week...had ins ...cost me $130 deductable....BRAND NEW Phone and it was overnighted to me
Apr 11, 2012 10:40PM
there screwing us with tech...just were they want us
Apr 11, 2012 8:34PM
Usually the contract buyout is $200 like at T-mobile. Buy out of it go somewhere else. If you pay upwards of $800+ like this story, you ripped off yourself after you lost your phone. This is trying to get you to buy the insurance that's likely around $10 month with tax. $240 for two out of the contract, don't lose phone again!

Apr 11, 2012 9:20PM
So what your telling me is if you have a smart phone your and idiot.  Anybody stupid enough to put all that kind of info on there phone deserve,s what they get
Apr 12, 2012 12:20AM
If you're truly "smart", you would opt for a "dumb phone" and save a ton of money on your contract!
Apr 11, 2012 8:33PM
about T-Mobile, I think they fall under the AT&T statutes of liabilities
Apr 12, 2012 12:12AM
why should we has consumers be locked into this ripoff high tech contracting. why not buy the iphone and just pay fee for the monthly service. then it's your phone-if you lose it you lose it. time to give the paying customer a real choice in the matter and not stack the deck with outrageous rates for security and lost. its time to take a 3world attitude to living in a modern world- security-who needs it. of course there will always be gullible people with no questions asked. why are we just slaves to the high tech industy? And, what is wrong with buying 2nd iphones? Again, it is high tech companies laying out the rules to protect their industry. In asian countries you can buy phones 2nd hand shop around for service providers. wake up and wipe out coporate greed.
Apr 12, 2012 12:45AM

Oh no, I 'm going back to my landline!ConfusedStormy cloud

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