Neets: Yikes, I haven't dropped mine once. I guess that's because it's either on the bed (yes, I sleep with it, don't we all?) or I am on the floor - with my phone of course (hours stretching after hard training sessions). Maybe you've got big arms R2D2 or you need really wide arm rests :P
$50 is cheap as chips. I'm sure ours is much more than that, but like you, I understand the contents insurance covers the phone.
Rounded armrest on that sofa makes for an unstable resting place for the phone. That and shiny low-friction finish and you have a recipe for "oops".
I'm going to guess that the excess is dependent on the insurer, what and how much you have insured, and most likely, length of loyalty and claims history. I'm with AMI if that matters. No complaints with them and I've been a customer for 15 years at least.