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Exactly: there's nothing wrong with only using one provider if you're not willing to pay for two services but if you can't afford downtime you really need active diversity all the way down.

Route53 uses a bunch of different top-level domains for the same reason – if someone does manage to take the .com servers offline you'll be glad .co.uk is run by a separate organization.

How does that work in practice? Even if I set NS records pointing to two different DNS providers, I don't think a DNS client would automatically switch and retry if one is too slow to respond/times out.

Why not? That's the whole idea behind having more than one NS server isn't it?

Most DNS resolvers will automatically try each NS record until they get a response. That might be your ISP rather than your iPhone but that's an old practice going back to when the internet was even less reliable because some random Sun box under someone's desk failed.

Modern web browsers will also do the same thing if a query returns multiple A records and they get a connection error.

N.b., unless things have changed, I don't think Dyn (for one) allows secondary DNS. Maybe that has changed. {?}