Austin from SquareTrade here, I wanted to let everyone know that we have updated our pricing to reflect Apple’s new price points. Nothing about our coverage terms has changed, other than the dollar amount of coverage you get for each model. Here are the new prices (after our ongoing 20% discount):

8GB iPhone 3G – $76.80 for 299.99 in coverage
16GB iPhone 3G or 3G S – $96 for 399.99 in coverage
32GB iPhone 3G S – $115.20 for 499.99 in coverage

Take special note of our coverage amounts. If ATT requires you to pay the full No Contract cost (currently 599 & 699 for 16GB and 32GB 3G S), you will be responsible for the difference.

It is worth noting that, aside from the flash tool, there is no area on the SquareTrade web site noting this, and it can be (legitimately) not seen by the user entering their information.

In the case of replacement contracts, a full replacement of the iPhone finishes up the contract, according to our Service Agreement:

LIMIT OF LIABILITY:
The total amount that We will pay for repairs or replacement made in connection with all claims that You make pursuant to this Service Agreement shall not exceed the purchase price of the Product, less taxes. In the event that We make payments for repairs, which in the aggregate, are equal to the purchase price or replace the Product with a new, rebuilt or refurbished product of equal or similar features and functionality, We will have no further obligations under this Service Agreement.

The mistake was unintentional, and I apologize for any confusion.

To answer your specific questions:
1) Will SquareTrade continue to allow iPhone 3G users to warranty their iPhones at the $599/$699 price-point? Can they go to squaretrade.com and simply register it like any other purchase?
Yes. You can still go and purchase a warranty at the $599/$699 price point, just like any other purchase.

We created a simplified program because customers were confused and worried that they wouldn’t put in the right price point. Unfortunately not all of our customers gets to read the excellent guide you’ve put here on how to determine the right price, so we’ve tried to make it as hassle free for the average user as possible.

2) WIll SquareTrade honor existing iPhone 3G warranties, which were purchased using the $599/$699 price point? Will there be any problem in making a claim for the full retail price?
We will definitely honor contracts that were purchased at the max replacement cost of the iPhone. Keep in mind, though, that the price of the iPhone may change over time. If the price of a 8gb iPhone drops to $399 without contract in a year’s time, and you purchased the coverage at the $599 price point, we will reimburse you $399 to get the new iPhone (minus $50 deductible for accidental damage), and the remaining $200 of coverage will be applied to your replacement phone.

Likewise, if it’s just your battery that can’t hold a charge, and it costs just $89 to get your battery replaced (no deductible, since this is covered by the basic warranty, you will still have $599 – $89 = $519 worth of coverage on your iPhone.

3) What will SquareTrade do when customers are out of contract, and told that buried in the fine print, they’re now forced to either fork over $200, or sign a new contract to replace their iPhone?
When we spoke to our customers before creating this program, the majority indicated that they planned on staying with AT&T in the future and didn’t mind signing a new contract if they were getting a new iPhone. Since the cost of warranty + ADH on a $599 phone is $179.99 for 3 years — almost as much as the customer paid for the phone initially — we chose to make the warranty more affordable.

I hope I’ve been able to answer your questions!

Quoting the web site: “Prices are based on the maximum replacement costs of the iPhone models: $399 for an 8gb model and $499 for the 16gb model. You will see these values listed as the “item price” on the checkout page and on your purchase summary email.”

But that isn’t correct! The maximum replacement cost of iPhone 3G is $599 for an 8 GB and $699 for a 16 GB unit. The prices you quote take into consideration the signing of a new 2-year agreement.

Ergo, if someone is 29 months into their contract (out of their contract), you are only refunding them the with-contract sales price of the phone. What if someone is now on prepaid service, or wants to cancel service? They can’t sign a new contract to get that price.

This wasn’t on the main sales page, this is buried in the agreement.

So, I now have three questions:

1) Will SquareTrade continue to allow iPhone 3G users to warranty their iPhones at the $599/$699 price-point? Can they go to squaretrade.com and simply register it like any other purchase?

2) WIll SquareTrade honor existing iPhone 3G warranties, which were purchased using the $599/$699 price point? Will there be any problem in making a claim for the full retail price?

3) What will SquareTrade do when customers are out of contract, and told that buried in the fine print, they’re now forced to either fork over $200, or sign a new contract to replace their iPhone? SquareTrade must bring this to the attention of the plan buyer… and not bury it in the fourth sub-tab of the fine print… especially because before this web site… SquareTrade went on-the-record with us saying that they would protect the full retail/replacement cost of iPhone 3G.

Vince from SquareTrade here. Sorry for all the past confusion on how to get an iPhone warranty. In September, we created a special program just for iPhones — you can avoid all confusion by just going here:

http://www.squaretrade.com/iphone

Which provides all the details you need. No more need to worry about purchase price — you just need to provide whether you bought an 8gb or 16gb model, and if you want 2 or 3 years of coverage.

For what it’s worth, Best Buy is also now offering extended protection on iPhones through their “Geek Squad Black Tie” service — but it’s a bit pricey at $14.99 / month.