A new iPhone, or any smartphone, is not cheap, usually $199 with a two year contract.

But what many people don't realize is that you'll have to pay a lot more if you drop it, break it, or lose it.

That's because replacement phones don't come at a discount, and are not subsidized.

Break it, you buy it

Dave Gregory  learned about the high cost of new phones last year, after buying his two teenagers new smartphones.

"Within two weeks, both of them had dropped their phone, simple drops, fumbling to get a call. It fell to the floor a couple of feet, and the screen shattered," Gregory said.

The same thing happened to Timothy White. "The screen was completely shattered. I can't dial any phone number with a 1, 2, or 3 in it."

Insurance worth considering

Cell phone insurance used to be unneeded, when phones cost $50 or less.

But now, if your phone is broken, lost, or stolen, you can't get a new one for $199. That's why insurance can be worth buying, according to Verizon and other carriers.

Bob Flynn of Verizon Wireless said, "insurance is a good option for the consumer, because it's $199 at the promo price, but if you lose it without the insurance, it's close to $700 for replacement of a 16 gig."

What your options are

Verizon, AT&T, T-Mobile, Sprint, and other carriers offer smartphone protection plans for about $10 a month, though with most you'll still pay a deductible between $150 and $200 for a new phone.

A third party plan that gets very good reviews is Square Trade . It charges $99 - $125 for 2-year protection on an iPhone or Android, with a $50 deductible. That's less than what most carriers charge.

And for iPhones, many tech websites recommend Apple's Apple Care Plus. Apple care is also $99 for 2 years, with a $50 deductible per incident.

Finally, your homeowners policy may provide coverage for even less. So check with your insurance company, and your phone provider.

If one of them offers a better rate, you may want to sign up.

Just remember that you can't buy any insurance AFTER your phone breaks or is lost. So purchase it when the phone is new so you don't waste your money.