Apple offers AppleCare+ for iPhones and iPad (please note that AppleCare+ is different from AppleCare.)

Do you need it? Is AppleCare+ worth it? It depends on your risk tolerance. AppleCare+ is $99 for 2 years but $49 each for claims due to physical damage. Is this worth it to you? Many users are resorting to replacing commonly damaged parts such as touch screen digitizers themselves rather than relying on cell phone insurance.

The best description of what AppleCare+ does and doesn't cover is from Apple itself:

Every iPhone comes with one year of hardware repair coverage and 90 days of telephone technical support. AppleCare+ for iPhone extends repair coverage and technical support to two years from the original purchase date of your iPhone and adds coverage for up to two incidents of accidental damage due to handling, each subject to a $49 service fee plus applicable tax.1 With AppleCare+ for iPhone, Apple experts can help troubleshoot issues over the phone or at an Apple Retail Store. They’ll answer questions about iOS, Apple iPhone apps such as Mail, iMessage, and Calendar, and help you solve interconnectivity issues between your iPhone and Mac or PC. And if your iPhone needs service under the plan, Apple technical support representatives can even set up a repair during the same call.

There have also been recent media reports suggesting that commonly damaged parts on the iPhone 5 such as the LCD screen or touch screen digitizer are more easily replaced than on it's predecessor the iPhone 4.

There are also third-party option such as SquareTrade who offer protection for devices bought on eBay. A SquareTrade Care Plan protects your eBay purchases from mechanical and electrical failures during normal use.

A SquareTrade Care Plan protects your eBay purchases from mechanical and electrical failures during normal use.

What is included in Coverage:

1 to 4 years of coverage, starting on day 46.

100% parts and labor coverage – with no deductibles.

Item repairs, or the full item price paid back to you if SquareTrade can’t fix it.

Covers New, Refurbished and Used items – even if there’s no USA manufacturer’s warranty on your item.

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