Because I am weak, I upgraded my iPhone over the weekend. I've always insured my laptops but never found good, reasonable policies for the iPhone. Today I discovered Square Trade. I was able to buy a 2 year policy on a 32gb iPhone 3g s for $115. This covers drops and spills, which AppleCare does not. If I upgrade the phone (say NEXT June), I can get a refund for the unused time on the policy. It seems like a good idea considering if I break the phone, It will be $500 to replace.
I've never made a claim to Square Trade and can't vouch for them but if you decide to give it a try and feel generous, list me as a referral (david @ macsparky . com - without spam-busting spaces). I have no idea what referrals do for me but it can't hurt.
If you've got any better ideas about insuring your iPhone (I know some homeowner's policies cover them - mine doesn't), sound off in the comments.