Do you really need cell phone insurance?

“It really appeared like they were doing everything in their power to get out of paying for my cell phone,” he says.

Totally frustrated, Leavens went to the Verizon store and “basically begged for help.”

To make a very long story short, he says Verizon convinced the insurance company to pay for a new phone. Leavens picked it up right away, but he told me he had to wait 2-and-a-half months for his reimbursement check.

I made several requests for a comment from Asurion, but there was no response to my calls or emails.

The fine print
When it comes to insurance, it’s the actual policy that counts, not what you see in the colorful brochure or hear in the sales pitch. The policy is a contract between you and the insurance company, and these cell phone policies have numerous limitations and exclusions not spelled out in the sales material.

For instance, the policy for Cingular phones do not cover “normal wear and tear” or a cracked display “that does not affect the mechanical or electrical function of the unit.”  And while the sales brochure promises, “a replacement is just a call away,” the policy is less generous. It says the company has the right to “repair or replace” the phone. That’s a big difference. And if they do send you a replacement, “colors, features and accessory compatibility are not guaranteed.”

Before making a decision, ask for a copy of the actual policy and see what it covers and what is excluded.

What should you do?
Say no to insurance coverage at the sales counter. Take some time to think about this purchase. You don’t have to make an impulse decision in the store. Cingular gives you 30 days. Verizon Wireless customers have 15 days to decide.

Consider what you’re really buying. While the transaction takes place through your wireless company, you are actually buying the policy from an independent third-party. If your claim is rejected, the wireless company may not be able to help.

Cell phone insurance is not like homeowners or auto insurance. With these policies if you have a covered loss, you get money from the insurance company. With phone insurance you get merchandise — a phone — instead of money.

And consider this. You can go online and get some great deals on used cell phones. If you lose or damage yours, it may be cheaper to simply buy a new one out of your own pocket with the money you didn’t spend on insurance.

Taking action
A class action lawsuit filed in Miami claims the insurance companies selling this coverage are using “deceptive and outrageous” practices. The suit contends the refurbished phones people get are worth less than the original phones.

MSNBC.com has learned a preliminary settlement has been reached in this case and will be presented to the court later this week. If approved, the settlement would affect as many as 13 million people who bought cell phone insurance.

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