Phone Insurance: Consider the cost!

I own a "smart phone" as do many other folks these days.  I have had my Palm Pre with Sprint for 10 months or so.  Sprint has, by far, the best pricing for smart phone plans so using them is a no-brainer compared to more expensive carriers like Verizon and AT&T for similarly unlimited plans.  Recently my shiny new Pre suffered a fatal injury.  I remember that upon purchasing I was offered their Total Equipment Protection insurance plan for just $7 per phone per month plus a deductible to be paid for each replacement.  I declined this plan after I purchased two phones.  Had I been paying for insurance, I would have shelled out about $140 dollars in insurance at this point in addition to the $100 deductible.  It would have cost me $240 to get my phone working again with their plan.  The math I did that made me decline the insurance was as follows; assuming two replacements total or one for each line, we would pay 24 * $7 + $200 or $536 total (or $268 per each) over the two contract years to get a fresh model of the same phone you already had.

So as long as we don't replace more than two phones over two years with an average cost of $268 each, we come out ahead or the same as with insurance.  Well, I just ordered up a slightly used Sprint HTC Hero, which wasn't even available when I got my Pre, from eBay for $251.  During March, I was unaware that Sprint opened the TEP program to all subscribers (not just those who recently purchased a phone), but had I joined just before breaking my phone, it would have been a better deal to go with the insurance.  I have high doubts we will go through two more phones.  What is important to remember for all you go-it-aloneophobes is that they wouldn't insure things if they couldn't turn a profit, and insurance is best used for things that would put you into financial hardship to replace rather than small electronics.