You buy a cellphone that is worth 12.000$, today. You know that you drop your previous phone once every five years and break the screen of the phone. You can save the screen buy buying a screen protector. However, you also know that once every ten years you drop your phone and break it completely even if there is a screen protector. How much you are willing to pay for a phone insurance that covers the full amount of your new phone? What are your expected costs with and without the screen protector? How much you are willing to pay for a screen protector?