Is Phone Insurance Worth It? We Did the Math for Repair Professionals
Is Phone Insurance Worth It? We Did the Math for Repair Professionals
We analyzed the $13.3 billion phone insurance market, from commission structures to claim rates. The data should change how every repair professional thinks about insurance, and what you tell your customers.
Consumers are paying $180 to $300 a year for phone insurance. Their carrier made it sound like a no-brainer at the store. "For just $15 a month, you're covered." But when was the last time they actually used it? And when they did, how much did they really save?
We ran the numbers on every scenario: premiums, deductibles, claim rates, commissions, and the actual cost of a repair at a local shop. What we found should change how every repair professional in this industry thinks about the phone insurance question. Because for most consumers, phone insurance is a money pit. And for you, the people who actually fix these devices, understanding that math is the single biggest competitive advantage you're not using yet.
But this story goes deeper than consumer economics. Insurance companies are now actively recruiting repair shops to sell their plans. New players like AKKO are pitching "commission plus repair revenue" as a win-win. And you're hearing from all sides that "insurance is taking over the repair market." Before you sign up for anything or panic about the competition, let's look at what the data actually says.
Tech repair is critical business in the US because everything is becoming tech, and every one of those devices will eventually need a fix. The question isn't whether people will pay for repairs. It's whether they'll overpay for insurance they barely use, and whether you should be the one selling it to them.
The $13.3 Billion Machine and Where the Money Really Goes
The US mobile phone insurance market is now valued at approximately $13.3 billion as of 2025, with North America representing roughly 35 to 39 percent of the $43.7 billion global mobile insurance ecosystem. That's a massive number. But where does all that money actually go?
Here's the part the insurance companies don't advertise: only 25 to 35 percent of premium revenue actually goes toward paying claims (fixing or replacing someone's phone). The biggest single expense? Marketing and sales commissions, eating up 30 to 50 percent of every premium dollar. That's not a typo. The insurance companies spend more money paying carriers and retailers to sell the plan than they spend actually fixing phones.
This isn't speculation. Assurant, one of the two giants in this space and a publicly traded company, reported $12.35 billion in total consolidated revenue for 2025. Their financial filings confirm that "Underwriting, Selling, General and Administrative" expenses, which consist primarily of commissions, are a dominant cost center. As of early 2025, Assurant held $585.7 million in "Commissions Payable" on their balance sheet, money owed but not yet paid to distribution partners. Industry analysis confirms that in the mobile device protection space, commissions to partners range from 30 to 55 percent of the premium.
Asurion, the other giant, is privately held so we can't see the same SEC-level detail, but credit rating agencies and industry reports paint an identical picture. Asurion generates approximately $10.6 billion in annual revenue and holds a dominant 70 percent market share in US mobile device protection. For a standard $15-per-month plan, roughly $7 (nearly 50 percent) goes to covering the split between Asurion and the wireless carrier. The company carries over $15.6 billion in debt, used largely to fund acquisitions and maintain its massive carrier distribution network.
When a consumer pays $180 a year for phone insurance, somewhere between $54 and $90 goes to the carrier or retailer who sold the plan. Only $45 to $63 is earmarked for actually fixing their phone. The rest covers overhead and profit.
Who Actually Has Insurance, and Has That Really Changed?
You've probably heard the narrative: "More and more people have phone insurance now, and it's eating into the repair market." It's one of the most repeated claims in our industry. But is it true?
Approximately 30 to 33 percent of smartphone owners in the US have insurance or an extended warranty on their devices. That percentage has hovered around the 30 percent mark for several years. The growth rate in adoption is steady at about 5 to 7 percent annually. Not the dramatic shift that some would have you believe.
So who's pushing the "insurance is taking over" narrative? Follow the money. The companies and individuals saying this tend to be the ones who want to sell more insurance. It's in their interest to make the market sound like it's already moved in that direction so you feel like you need to get on board.
Here's what has actually changed: the value of the policies has grown faster than the number of policyholders. Premium smartphones now exceed $900 in average selling price, which means the plans cost more and the claims cost more. Average policy premiums have risen 25 to 30 percent in the last two years, but that's the price going up, not a flood of new customers signing up. Consumer awareness of phone insurance has increased to 70 percent in 2025, up from 55 percent the year before. But awareness isn't the same as adoption. Most people know insurance exists. Most of them still choose not to buy it.
The numbers tell the real story. With 290 million smartphones in the US and roughly 30 to 33 percent insured, that gives us 87 to 96 million insured devices and 194 to 203 million uninsured ones. Seventy percent of the smartphone market has no insurance at all and relies entirely on out-of-pocket repair. That is your market. It has not shrunk. Don't let anyone tell you otherwise without showing you the data to prove it.
Some other demographic details worth knowing: carrier-sold plans dominate, with roughly 82 percent of policies sold directly through mobile carriers rather than standalone insurers. Parents are highly likely to insure children's phones, with 71 percent adoption in that group. Millennials lead general adoption at 57 percent, while baby boomers trail at 29 percent. Subscription-based plans now account for roughly 45 percent of the market, up from 35 percent in 2020, which represents a shift in how plans are sold, not a surge in how many people have them.
Who Actually Files a Claim? The Usage Spectrum Explained
Now here's the data that really puts the insurance business model in perspective. Industry data shows that only 20 to 33 percent (roughly 1 in 5 to 1 in 3) of people who purchase a protection plan will file a claim during the typical 24-month lifecycle of their device. The majority of policyholders pay every single month and never use the coverage. For the insurance company, these are the most profitable customers imaginable.
A few additional patterns worth understanding: claims are significantly higher in the first six to nine months of ownership. People are more likely to insure and repair a brand-new $1,000 device than a three-year-old one. Younger users (Gen Z and Millennials) file claims at a significantly higher rate than older demographics, primarily due to higher daily screen time and more active lifestyles.
Insurers also track what's called "moral hazard," the phenomenon where consumers who have insurance are less careful with their devices because they know they're covered. This is exactly why providers like Apple and Asurion have shifted toward low-cost screen repairs at $29 deductibles. It encourages users to stay in the "medium" category rather than waiting for the phone to completely break and requiring a $200 replacement.
What does all this mean for repair professionals? When you hear that "everyone has insurance now," remember: 65 to 70 percent of the people who do have it never file a single claim. They're paying $180 to $300 a year for nothing. And the 70 percent of the market that doesn't have insurance at all? They're walking straight to your shop.
The Math That Changes Everything: Phone Insurance vs. Repair Cost
Here's where the rubber meets the road. Let's walk through the most common scenario your customers face: a cracked iPhone screen.
| Repair Option | Cost Breakdown | Total Cost | Wait Time |
|---|---|---|---|
| Insurance (Tier 2) | $15/mo ($180/yr) + $99 deductible | $279/yr | 5–10 days (mail-in) |
| Apple Store | Out-of-warranty screen repair | ~$279 | Same day (if parts in stock) |
| Independent Repair Shop | One-time screen repair | $150–$180 | 30 minutes |
The insurance route costs the same as or more than an Apple Store repair, and the customer has been paying premiums all year on top of it. Your shop? It's the cheapest option by a wide margin and the fastest.
Remember the "deductible barrier" from the usage data above: many medium users choose not to file a claim if the damage is minor because the deductible ($29 to $250) is higher than the perceived value of the fix. That's a customer who paid for insurance all year and still ends up at your counter paying out of pocket. They just don't know it yet.
The Deductible Paradox: Your Best Marketing Message
This is the data point that should be at the center of your marketing. Many customers who have insurance still walk into independent repair shops to get their phones fixed. Why? Because the deductible is often equal to or higher than the cost of the repair itself.
Think about it from the customer's perspective. They've been paying $12 to $18 a month for coverage. Their screen cracks. They call the insurance company and learn their deductible is $99 to $149. Then they Google "phone repair near me" and find out your shop will do it for $150. The insurance "savings" just evaporated.
And here's the convenience factor that seals the deal: filing an insurance claim often means 5 to 10 days without a phone if it goes to mail-in. Your shop means 30 minutes and done. Forty-five percent of customers who choose independent repair shops do so specifically because they get to keep their actual device. No refurbished replacement, no data transfer hassle, no risk of getting back a phone that isn't theirs.
"Why pay a monthly premium AND a deductible when we can fix it right now for less?"
This is the deductible paradox, and it's your greatest competitive message.
Not All Insurance Claims Come Back to a Repair Shop
Here's something critical that repair professionals need to understand about the insurance model: when a customer files an insurance claim, there's no guarantee that claim results in work for any repair shop, even when the insurance company owns repair shops.
Carrier-backed plans like T-Mobile's Protection 360 (Assurant) and Verizon's plan (Asurion) prioritize low-cost or zero-deductible local screen repairs when possible. But if parts aren't available locally, they default to shipping a reconditioned replacement device the next business day. Even Asurion, which owns uBreakiFix with over 700 locations, often settles claims by shipping a replacement rather than routing the customer to one of their own stores.
The factors driving hot swaps over repairs include severity of damage (only minor issues like cracked screens are typically repaired), geographic availability (if no authorized repair center is nearby, they ship a replacement), and a "repair yield" metric. If the cost to repair exceeds roughly 20 to 30 percent of the device's value, insurers replace the unit instead.
The insurance ecosystem is not designed to send customers to independent shops. It's designed to resolve claims as cheaply and quickly as possible for the insurer. The majority of your potential customers (the 70% without insurance) are still coming to you. And even many insured customers bypass their coverage entirely because of the deductible paradox.
Insurance for Everything: What Happens After You Sign a Customer Up?
Insurance companies aren't just selling phone coverage anymore. They're integrating protection plans into everything. Buy a $25 mouse online? You'll get offered a protection plan at checkout. A $40 pair of earbuds? Insurance pop-up. A $15 phone case? Yes, they'll try to insure that too.
Extended warranty and protection plans are being embedded into ecommerce platforms at every price point, turning checkout pages into insurance sales funnels. This is the same B2B2C model that Assurant and Asurion perfected with carriers, now spreading across all of online retail.
Now here's the question every repair shop owner needs to ask before selling a protection plan from their counter: if you sign a customer up for a plan, what happens to that customer's inbox?
Traditional insurers like Asurion and Assurant are built on maximum attachment rates. Their carriers aggressively remarket to anyone who declines insurance at the point of sale. If a consumer says "no thanks" at the store, they will often receive emails, SMS alerts, and app notifications for the first 30 days (the "open enrollment" window), all urging them to protect their "unsecured" investment. Their business model is built on selling a separate policy for every single serial number. A family with four phones means four premiums. This leads to massive over-insurance where households pay $50 to $70 a month in total premiums.
If you're selling plans at your shop through a provider, your customer may now be in that remarketing funnel. They may start getting emails and notifications pushing them to add more coverage, upgrade their plan, or insure additional devices. Are they going to appreciate that you signed them up for that? Are they going to associate those spam emails with your shop, the place they trusted with their phone?
This is a real customer experience risk that most repair shop owners don't think about when they hear the commission pitch. The insurance company's number one goal is to sell more plans. That's not a criticism; it's their entire business model and the reason they exist. But your number one goal is customer trust and repeat business. Make sure those two things aren't in conflict before you put an insurance sign-up on your counter.
Should Your Shop Sell Insurance? Proceed With Caution.
New companies, most notably AKKO, but others as well, are actively recruiting repair shops to sell device protection plans. The pitch is compelling: earn a commission on every plan you sell, and when the customer's device breaks, the repair work gets routed back to your shop. Commission plus repair revenue. Sounds like a win-win.
But before you sign up, here's what the data actually says, and what it doesn't.
AKKO's partner material explicitly pitches two revenue streams: commission on plan sales and repair work from covered claims. They state that "repairs are seamlessly referred back to your business" when you're an approved repair partner. They lean heavily on "customer loyalty" language, positioning plans as a way to keep customers coming back.
Here's the problem: there are no public case studies with concrete numbers showing what percentage of AKKO plan holders actually return to the originating shop for repairs. There are no published statistics on claim frequency per plan, average claim value, or the percentage of claims handled by the shop that sold the plan versus elsewhere. The loyalty and repeat-business claims are marketing language, not independently verified performance data.
To become an authorized AKKO repair provider, you typically need to join the Repairs First Association (RFA), which acts as AKKO's exclusive vetting and quality assurance partner for their North American repair shop network. Membership costs $69 per month ($828 per year). RFA offers additional benefits (training, parts discounts, mastermind calls), so the membership isn't exclusively about AKKO access. But the AKKO relationship is a centerpiece of the pitch.
So here's the question RFA and AKKO should be able to answer but don't publicly: What is the actual ROI for a repair shop that pays $69 per month for RFA membership and sells AKKO plans? How many AKKO insurance jobs does the average member shop receive per month? What's the average reimbursement per claim? What percentage of claims filed by customers who bought a plan at Shop A actually get routed back to Shop A for repair?
These are straightforward numbers that would validate the investment, and the fact that they aren't published should give every shop owner pause.
AKKO itself is a relatively small player, estimated at somewhere between $10 million and $26 million in annual revenue depending on the source. Compare that to Asurion's $10.6 billion or Assurant's $12.35 billion. The company is privately held and does not publish audited financials.
AKKO's model is different from the traditional carriers in one important way: instead of selling a separate policy per device, they offer an "everything" plan that covers multiple devices under one policy. That sounds consumer-friendly, and in some ways it is. But it comes with its own form of aggressive engagement. To get the full coverage, customers have to upload photos and serial numbers of all their gear into AKKO's app. Once someone has spent 20 minutes cataloging their laptop, tablet, headphones, and phone in that system, the switching cost becomes very high. They're not just canceling a phone plan; they're abandoning their entire digital inventory. That's a retention strategy, and it's by design.
And remember: the number one goal of any insurance company, including AKKO, is to sell more plans. That's not cynicism. That's how the business model works. The commissions, the partnerships, the remarketing, the data collection, all of it exists to drive plan sales. The question for you is whether their goal aligns with yours.
How to Evaluate Any Insurance Partnership
Offer the plan for 3 to 6 months and track: plans sold per month, claims filed, claims routed to your shop vs. elsewhere, and your average margin per claim after costs.
Track whether plan customers return for non-covered work (accessories, out-of-scope repairs, upgrades). That's a better measure of loyalty than claim work alone.
Decide in advance: "We'll keep this program if we earn at least $X per plan sold plus $Y profit per claim, and at least Z% of claims come back to our store." If thresholds aren't met, walk away.
Request your exact commission per plan type, reimbursement schedule (labor rates, parts markups, coverage limits), and historical claim frequency for similar shops. If they won't share, that tells you something.
If the insurer's allowed rates are lower than what you normally charge, claim work can be a loss leader. Operational overhead (photos, diagnostics, back-and-forth) eats into effective margin.
After signing up a few customers, ask them: have you received any additional marketing from the insurance company? If your customers are getting spammed, that's your reputation on the line.
The bottom line on selling insurance from your counter: protection plans can be a legitimate profit and loyalty tool for repair shops, but the specific promises from any provider should be verified with your own numbers, not taken on faith. Don't just take what someone says as the gospel truth. Ask for real data and real information on how this will benefit your business. If they can't provide it, proceed with extreme caution.
The Self-Insurance Argument: What Your Customers Should Hear
Here's the math that the insurance industry really doesn't want consumers to see, and it's a conversation you should be having with every customer who walks into your shop.
Instead of paying $15 per month for insurance, a consumer puts that money in a savings account. Over two years, they've saved $360. They buy a quality phone case and screen protector for $50. If they crack their screen (which statistically happens zero to one times over two years for most people) they pay $150 to $180 at your shop.
Now layer in the usage spectrum data: 65 to 70 percent of insurance policyholders never file a single claim. They would have saved every penny of that $360 to $600 in premiums. The self-insurance math isn't even close for the majority of consumers.
Self-insurance isn't a theory. It's basic math. And it's a message you can put on your website, in your shop signage, and in every conversation with a customer who says "I think my insurance covers this." Help them do the math. They'll thank you for it, and they'll come back.
When Insurance Does Make Sense
We're giving you the data, not a sales pitch. For some consumers, insurance genuinely makes sense. If someone loses or has their phone stolen regularly, insurance with theft and loss coverage provides real value; your shop can't help them find a phone that's gone. If they own a foldable phone with a $500-plus screen replacement cost, the calculus shifts. If they damage their device two or more times per year, putting them in that 5 to 8 percent "heavy user" category, the break-even math can work. And parents insuring kids' phones, where the 71 percent adoption rate speaks for itself, often find the peace of mind worth the premium.
But for the average consumer who cracks a screen once every couple of years? Insurance is almost always more expensive than just paying for the repair at a local shop. The right to repair movement is making sure independent shops have access to the parts, tools, and documentation needed to deliver OEM-quality repairs at a fraction of the insurance cost.
What This All Means for Your Repair Business
Your Playbook Based on the Data
Seventy percent of smartphone owners have no insurance. That percentage has not changed dramatically. The people telling you the market has shifted are often the same people trying to sell you something. Demand the data.
Put the math on your website. Create a simple comparison: "Insurance cost vs. repair cost." When customers see the numbers side by side, the decision makes itself. When 65–70% of policyholders never file a claim, the math speaks for itself.
"Your deductible is $99. Our screen repair is $149. Skip the monthly premium and come straight to us." That message resonates because it's true.
It can work, but the promises are unverified for most newer programs. Run a pilot, track your numbers, monitor the customer experience, and set minimum thresholds before committing.
Speed (30 minutes vs. 5–10 days). Keeping your original device. No paperwork. No claim denials (5–15% of claims face denial, and even successful appeals only win 44% of the time).
200 million devices in the US have zero coverage. Those people need you. Make sure they can find you. List your shop on WhereToRepair.org and keep your Google Business Profile up to date.
Tech repair is critical business in the US because everything is becoming tech. The insurance industry knows this; that's why they're collecting $13.3 billion a year in premiums. But the data shows that most of that money would be better spent at your shop. Help your customers see it, and you'll never worry about where your next repair is coming from.
Help Shape the Future of This Industry
The data in this report comes from TCA's ongoing market research. The more repair professionals who participate, the stronger our data becomes. Take the survey. Read the research. Come back for more.
This article is part of TCA's State of Tech Repair 2026 series, delivering original market intelligence to the professional tech repair community. Haven't read the first post? Start with "The Tech Repair Industry Is 8x Bigger Than Anyone Thinks." Coming up next in the series: the right to repair laws that just changed everything for your shop, and what you need to do right now to take advantage.
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