you're only eligible for the discount if its start of your contract or you're renewing your contract. If you bust your phone a month after getting it with the contract, you're not eligible for that discount again and the phone would cost retail which is like 500 bucks or more.
by that logic, the insurance will be cheaper if its 10 bucks a month ( i thought it was cheaper than that but i dont really know). most people upgrade their phones after a few years as well and insurance comes in when you lose it or break it usually long before this.