Brad Pareso
MoneyMix Contributor 

Back in November, I was pumped to retire my RAZR and buy a new cell phone. I had been eyeing the BlackBerry Pearl, and the day it came out on Cingular, I raced to the store.

In my haste, I ignored all the questions and warnings the sales associate gave me – notably, whether or not I wanted insurance on it in case of an accident.

About a month later, I dropped the phone down three flights of stairs. Four hundred dollars and a new Pearl later, I was cursing myself for not getting insurance. Worse, I had to listen to my dad’s infamous "I told you so" speech.

sleep easy

What if you totaled your car and had no insurance?A cell phone may not seem like much in the grand scheme of things, but consider this: what if I had totaled my car and had no car insurance, or my apartment burned down and I had no renters insurance? Having insurance lets you sleep easy knowing if something catastrophic happens, you won’t have a huge financial nightmare.

 The concept behind insurance is simple: let’s say there are 10 people and each of them owns the same $350 iPod. If one person drops his iPod in a puddle, that person has to shell out $350 to buy a new one. Now, if someone's iPod gets ruined he gets money from the pool to buy a new one.

But what if each of those 10 people puts $50 into a pool for any "iPod-related accidents?"

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