AT&T gave iPhone users some good news recently (perhaps long overdue) by announcing that as of July 17, all iPhones under AT&T plans will be covered against out-of-warranty fixed and replacement. However, to be eligible for this program you need to have had signed up within 30 days of activation or upgrade.

For years, AT&T has been criticized for poor service and poor customer support but now it seems to be finally increasing its standards. Maybe Apple belated decision to give Verizon access to the iPhone had its role or maybe the guys at AT&T finally decided to check the feedback emails they’ve been ignoring for months now. Either way, we are quite happy now.

The service will cost $5 per month per line and will cover lost and stolen hardware and other technical issues that may arise. There is also a deductable involved that could range from $50 to $125 depending on the device. While users will be able to get cover worth $1500, they will not be able to make more than two claims within 12 months.

Until now, users had to go with Apple’s own insurance plans, which were almost twice as expensive. While we are disappointed with AT&T for taking so long to roll out the insurance scheme, some analysts have rightly pointed out that this was probably because Apple wanted full control of its product. Does the change in policy tell us something about the direction of market itself? We will have to wait and see. However, while this is great for existing users, it may not help AT&T stem the tide of users defecting over to Verizon and other carriers despite the “iPhone factor”.

As the demand and ownership of smartphones (especially the iPhone) is set to increase in the next few years, insurance schemes will become essential for users.