With high-end smartphone prices starting at 365,000 colones (about $730) for a Samsung Galaxy SII, we are talking about a serious investment in a mobile device. How many of us can afford to replace the smartphone, if it is accidentally damaged, lost, or stolen? If you purchased your phone, you are faced with purchasing a replacement. If you acquired your phone on a postpago contract, you are still obligated to make the payments on the phone for the life of the contract, and you need to purchase a replacement.

The biggest challenge facing manufactures of smartphones is building phones that survive the abuse they receive. Phones get dropped, get wet, get chewed on by puppies, and about every other imaginable form of accidental damage. In addition to covering reliability of smartphones, SquareTrade’s report on “Smart Phone reliability: Apple iPhones with fewest failures, and major Android manufactures not far behind” discusses smartphone accidental damage rates. In a twelve month period, 13.8% of the iPhone 4 users reported accidental damage to their phones. Blackberry was the most rugged phone with only 6.7% of the users reporting accidental damage. 12.2% of Motorola and HTC users suffered accidental damage to their phone. While 10.2% of all other smartphone manufactures said their phone was accidentally damaged. In round numbers, we could say that 1 in 10 users accidentally damage their phone in a single year.

From the infographic referenced in the article “Recovering Lost Mobile Devices in Costa Rica,” we can derive an average of about 4 out of 10 phone users lose their phone. While someone may purloin your lost phone for their own use, it is not the same as physical theft (violent theft, in insurance terms) of your phone. Physical theft covers direct theft from you, theft from your vehicle, or theft from your home. The new system for “black listing” stolen devices should reduce the number of cell phone thefts. It takes time for the word to get to thieves, and to get cell phone owners to actually request that their stolen phone be “black listed.”

In Costa Rica, there are two options for insuring your smartphone. You can insure it at the time of purchase, or you can get electronic equipment coverage. Neither, insurance policy covers lost phones, even if they are not recovered.

At this time, only ICE/Kolbi offers point-of-purchase cell phone insurance for selected phones. The actual cost of the insurance is around 16,000 colones ($32 USD) for a one year policy. This policy is not renewable, but it does give the broadest coverage. The policy has a 25% deductible and covers:

• Natural disasters.
• Damages due to dropping the phone, immersion in water, or other accidental damage.
• Theft of phone, which must be accompanied by a police report.

The ICE/Kolbi policy is a group policy. Due to a high incidence of insurance fraud, there is no longer an equivalent individual policy. The electronic equipment policy is the only other alternative. The minimum charge for the policy is around 16,000 colones ($32 USD), which covers most smartphones. However, you can cover all your electronic equipment under this policy. The value of the equipment is based on a five-year straight-line depreciation formula. The policy has a 25% deductible and covers loss of equipment due to:

• Natural disasters
• Theft of phone, which must be accompanied by a police report.

Timothy Garret of Unicen Corredora provided the insurance information for this article.