I just have AppleCare, I know some people do both. It just comes down to your needs.
Hypothetically, if you need to replace a lost phone, AppleCare is 100, plus let's say $700 to cover a replacement phone. That's $800. AppleCare plus the AT&T insurance (which is about $7 a month) for two years is 268 ( insurance comes out to ~$168) plus a ~$150 deductible, which comes out to ~$420 for a replacement, and is less money up front.
So in the end, it comes down to what you can do. If you can afford to pay outright for a replacement as needed, then don't get the insurance. If not, the $7-10 a month may be better.
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