Do you really want to insure your cell phone?

Notice how when you buy a toothbrush the salesperson will try to sell you an extended warranty for it? Here's a rule of thumb: when someone is trying hard to sell you something, they're not doing it out of the goodness of their hearts.

Here are some numbers from SmartMoney:

What’s behind the proliferation of policies? For the companies that write them, they can be extremely profitable, says John Rost, founder and chief executive of Fiesta Insurance Franchise. Insurance is designed so we can all pay a little bit so that a small fraction of us can be covered in the event of a disaster. But many of these non-catastrophic policies don’t quite work that way. Between premiums and the deductible, customers with cellphone insurance could end up paying the insurance company more than it would cost to buy a new phone outright. And acccording to some estimates, the profit margin on extended warranties – basically, a form of insurance to protect your gadgets beyond what the manufacturer’s warranty covers – is a whopping 50%.

Ouch. The answer is to self-insure, not for anything catastrophic like your house or life, but your cell phone ... ?

With average premiums around $5.64 per month, according to Citizens Utility Board, cell phone insurance is cheap. But even with the coverage, losing your phone can still be expensive. The policies usually require a deductible of up to $100, in addition to the premiums, and there are often exclusions for common mishaps like cracked screens. Plus, some cell phone issues are covered by the manufacturer’s warranty anyway, the average cell phone isn’t all that expensive, and the insurance company might replace your phone with a refurbished model rather than a new one. “It’s not worth it,” says Schwark Satyavolu, co-founder and CEO of BillShrink.com.

Cost to “self-insure”: $100 - $600. To cover yourself, you simply want to save enough to replace or repair your phone. The average phone repair usually ranges from about $30 to $100, but new phones without a contract are more expensive. Standard phones cost $189 on average, while BlackBerries, iPhones and other smartphones can run up to $599, according to an October 2010 BillShrink.com analysis.

For a long time I thought about insuring my hair against loss, but it's too late -- a pre-existing condition.