Asurion Ripoff cell phone insurance, Pay too much, apparently used equipment, etc. Nashville And Smyrna Tennessee

Last Wednesday I bought a Motorola droid 4. I only owned the phone for less than 48 hours and I dropped it and shattered the screen. I never even paid 1 month of premiums. I paid a 99 dollar deductible and they next day shipped it to me. since it was outside of business hours by the time the claim was processed I will be receiving my phone on Monday so I cannot comment on its quality as of now. They said I may keep all accessories I received with the phone and I will receive new ones.

So lets figure out the cost.

Next day shipping from Tennessee to my location next day ups I calculated on ups.com for 68.00 new charger 15.00 and extra back cover 5.00. That is 88.00 so only 11 dollars went to the deductible. to the whole return your phone thing. In Ohio when you total your car it is taken by the insurance company and you get the remaining money after the deductible for its value. Then you can buy the car back. its essentially the same thing. You pay for insurance so someone else assumes the risk of your item damaging. People, who pay for 2 years and dont make a claim, pay for people like me who have to file a claim after 2 days thats how insurance works.

You have provided me with the necessary information to file a complaint in every state with the insurance commission and the attorney generals on Asurion and Liberty Mutual Property&Casualty.

I will post my responses as soon as I hear from the agencies. It is time that the consumer take back their power and put the crooks in their proper place.

Eric

Having worked in the service contract industry for over 5 years - in fact, my company was purchased by Asurion last year - I hope I can bring insight to all who question the merits of service plans.

I am no longer employed in the industry nor do I work for my former employer (not a paid announcement I can assure you!) but I would like to provide you a knowledge base of the business so ultimately we have a more balance viewpoint of the value added potential a service contract plan can have for a consumer.

I realize that many consumer does not always understand the specifics of risk management such as pricing models and business rules. That's acceptable because the consumer only is privy to the outputs - basically the monthly service fee paid and consequently the service that fee provides.

Here are some industry facts that I would like to share with you:

1. The $5.00 fee per month one pays for this type of service is not a revenu that is solely going into the administrator's coffers. In fact, only a percentage goes to the company that underwrites the claim.
2. Sourced out refurbs are normally of excellent standards (annual failure rate anywhere from 2-4% per 100 compared to OEM which might run less 1% to 3%, depending on brand) and are used simply to keep the cost of these plans affordable. That being said, new phones are also being supplied as refurb seed stock availability on the market is constraint by a few factors such non availability of certain manufacturer's parts and high cost of labour to refurb. Because of these factors, refurbs purchase cost are fractionally marginal compared to new as one might be lead to believe. Refurbs unit cost is anywhere 50%- 70% of retail price, depending on availability, model, and feature sets.
3. If one has accidental damage coverage on your unit (as manufacturers do not provide this type of coverage) then one has to expect a higher premium to pay. Accidental claims on mobile units have a higher than normal frequency of breakage. If you doubt this - how many times have you dropped your phone in a span of 12 months? Ditto for any loss or stolen coverage.
4. As we all work to make money, so does is the administrator who is profit motivated. They are in business to make money so they can grow more wealth for the local economy.
5. An top notch administrator has one primary concern - that the quality of its customer care reflects a great experience for the consumer in view of creating a high yield of brand loyal. In fact, they will often lean in favor of the consumer for any repair issues even those considered marginally outside of the terms & conditions. There is no long term advantage to be gained in ripping off consumers. Ithink Asurion has an pretty good track record in the business of taking care of their customers.
6. When a consumer purchases a wireless plan from a telco, the phone is often subsidized by the telco because expectations are to lock in the consumer for a long term - A term that outlives most manufacturer's in warranty coverage period. So a consumer is without a service plan during the out period of the OEM coverage, he or she will have to buy another phone probably at retail, not subsidized pricing, if the unit fails. That's a reality.

In addition, something to think about, today's manufacturer as a cost saving measure are reducing OEM coverage period so they can remain transactionally competitive on the marketplace.

7. The manufacturer rarely replaces a defective unit and the time in shop to be repaired can vary from 5 days to 21 days. Shipping to the depot is at the consumer cost. A service plan provides a consumer with a replacement more often than not and shipping is included.

8. Is the coverage of a service paln worth the money? That depends heavily on the frequency of usage by the consumer. The more we use a product the higher the probability that some form of failure will occur. No different that an automobile...I.E. 3 yr warranty or 60,000 miles whichever comes first right? More reasons to consider a plan in view of extending and matching the coverage period of our unit to the telco plan we signed up for. That's just being prudent and smart.

Would I buy a warranty on a very reliable and age old technology such as a CRT
TV? Probably not. On a mobile unit, where components are constantly being miniaturized and new technology paradigmized ever six to twelve months, that would be an emphatic yes!

Now if the customer care you received was atrocious - I certainly would ramp that up to a higher level and voice that to someone in a position of authority. The people upstairs are not always very appreciate to hear that a consumer is not satisfied with their market offering.

Last parting word - there are companies in the industry that do not have any sense of care for their paying customers. Caveat Emptor! Shop around as I do.

A simple question to ask ourselves prior to purchasing any plan is the following: If my unit fails outside the coverage of the manufacturer do I want to invest the lump sum of cash to replace it or will a monthly pay plan be easier on my budget?

That's where we need all to make a deep analysis of our current needs.

Consumer friendly site such as Ripoff Report which provide consumers with a podium for voicing discontent and bringing to light to others bad service experiences (and boy do they exist out there!) is a great leverage tool to alert business owners and stakeholders who care that they must constantly innovate and improve their service offering. Kudos to the dedicated people who run this site.

I hope this brings new insight and an appreciation of the value of a service contract. Certainly no industry is perfect but some are working very hard to bring great value to consumers such as you and I.


Michael

I had the same problem with Sprint PCS, but with a diffrent company. Since that time no longer I buy those garbage insurances.

Let me start off by saying that I've been an employee of this company most likely for longer than you've been a subscriber of the Insurance program. At the moment, I'm currently working in the escalations department, where all of the customers who are upset with the frontline CSRs or want to gripe about paying deductibles or premiums etc go. Before that, I was an employee for T-Mobile; most likely again longer than the amount of time you've been enrolled in the Insurance program. With that said, I can understand how you may feel concerning where it is your money (and your damaged phone) is going and what exactly your deductible covers. I, too, have filed insurance claims (for both Asurion and for my car insurance) and let me tell you that returning a piece of equipment (be it a phone or a car) is not a rare occurrance in the insurance world. Secondly, let me also point out that Asurion is not an insurance company. We are an Authorized Agent and our policy is underwritten AND FUNDED by Liberty Mutual Property&Casualty. All of this information is clearly listed in the brochures we provide at every retail store.

What you've said about the monthly premiums and deductible totalling to the amount of a phone AT A STORE is absolutely correct. It is common knowledge and quite understandable that the longer you go with paying for your insurance, the more money you will be providing to our company. You also have to understand, however, that our monthly premiums are there to provide you with COVERAGE on your device through an insurance policy that you are in NO WAY required to purchase. It is merely there as a convenient way of replacing a phone without signing another contract with your service provider. Of course, we hope that nothing ever happens to cause you to file a claim, but we do understand that life happens and sometimes you have to bite the bullet and take one for the team, even if that means filing an insurance claim so that you can afford to replace your phone and keep in contact with your friends and family.

Now let's get started.

You stated, and I quote,

"Dont forget you gotta send your old broken phone back in with the battery...It does not take a moron to realized that they referbish the old phones and put new cheap plastic housings on the phones and resell em. (check link below) Probably the batteries too. How much do ya think the old cell phone is worth to the refurbish company....? $15, $25?, $40? more? While they resell it for probably at least $90 to $175. Which you originally paid $150.00 for.

Oh and dont forget to send in that old phone, if you dont, thats an extra $300.00

And lastly, the customer service sucks.....Oh the reps you talk to are very nice dont get me wrong, but I was disconnected once, put on hold several times....Told the wrong information.....(a guy at Asurion told me that the $50.00 went towards extra months on your Asurion insurance plan, next Rep. I talked to later said that was not true and it was just a service fee)"

I apologize for your experience on that day. The deductible is actually a service fee just like the one that your car insurance or your homeowner's insurance would require. The only difference between car/home and our policy is that with car/home you are being presented with a reimbursement check for the amount of your damages MINUS the amount of the deductible required by your policy; whereas Asurion is providing you with a new phone instead of reimbursement. That is why we require that you PAY your deductible before your claim is approved.

Yes, we DO rebuild phones. As a matter of fact, our Smyrna center is ISO Certified and has been for several years. What does that mean? Basically it means that the people who are rebuilding these phones are trained just like the people who built the phone in the first place. We bring the phone back to a quality comparable to when the phone was first built. Why do we do this? Because we know you love your phone. We also know that manufacturers routinely discontinue the production of certain model phones, based on technology as well as consumer satisfaction.

Case in Point:

In 2005, Samsung USA quit production of the A670 model, a very popular phone for Verizon Wireless. That same year, LG also quit production of the VX-6100, yet another popular phone. Verizon had advised us that we were to replace these phones with new phones that did not have the same features (such as video capture) but that were comparable price wise. Because these phones were no longer being produced and you the consumer didn't want a different phone, we were not getting any new phones in and we then began rebuilding phones to meet the needs of our consumers. In addition to that, we offer a limited warranty on those phones. It's like going to a car lot and wanting a green convertible sports car and the dealer saying that he'll sell you a brand new yellow truck. YOU DON'T WANT A YELLOW TRUCK. You want a green sports car, so you tell the salesman again. Eventually he says he has a green sports car, but it's an older model with a rebuilt motor and it does come with a warranty.

We want to make sure you're happy so we give you options such as that new phone, or keep you in your old model. The plastic housings in the rebuilds are provided to us by, guess who! The manufacturer. They are branded with the manufacturer's logo, but not necessarily with your carrier's logo. You also have to remember that the casing on your phone is EXACTLY what we get from the manufacturer and nothing less.

SALVAGE OF DAMAGED PHONES:

The reason we require that you return your damaged phone is for the exact reason above:
So that other subscribers can have the same luxury of being able to choose whether or not to keep the model that was lost/broken/stolen, etc. The reason we impose the $300 non-return fee is because that's how much it costs to purchase the parts needed to build another phone of your make and model, have it programmed, test it, and make sure that it can be used on your service provider's wireless network. Because we are not a RETAILER (e.g. T-Mobile, Verizon, Cingular, etc) we do not get any special promo prices for buying phones in bulk. Therefore, if you are able to provide us with your broken phone (which you're not able to use) and your battery (which we 9 times out of 10 actually recycle instead of reusing, mostly because with the average age of a phone *6-14 months* the battery is pretty much guaranteed to be at less than HALF of the capacity it was when you bought it brand new and also because it is a safety hazard. It can cause overheating issues, which are a definite liability.) you will save us that much more and help keep us from raising the prices on your deductible or your premium.

You THEN said, and i've numbered points for reference,

"(1)So all and all you end up paying about $150.00 or more for your (new) phone, while they turn around fix the old one and (2)resell your phone as a new or refurbished one.....If your phone does not break for longer....You end up paying even more. Worst case senario you forget to send in your broken phone and could end up paying like $450.00 or more.

(3)The only good things about this service is that you pay no shipping costs, Or did I? and I got a new phone by the next day.

I thought insurance was suppost to help your wallet(4), not not burn a hole in it. Its an Assurance, that youll be getting scammed with Asurion insurance.

P.S. There are other people on the net reporting Asurion Insurance as a scam (do a search) One guy says the phone they sent him was used(5), had scratches on it and didnt work(6) when he got it.....Says his Verizon local store told him the company is ripping every one off!(7)"

1. So all and all you end up paying about $150.00 or more for your (new) phone, while they turn around fix the old one

A: Please refer to the above point referring to return of damaged phones for salvage as well as to replacing you with a phone of similar qualities to the one you claimed IF YOUR PHONE IS NOT AVAILABLE, be it refurb or new. Yes, you pay about $150 for the phone (if your phone dies within the average 6-14 month life of a phone) but that's a drop in the bucket in a world where phones (especially NOKIA) routinely cost 5-6 HUNDRED dollars, even up to $1000. As a matter of fact, the limit of coverage on an Asurion policy is $1500 and that is NOT including accessories for your phone.

2. ...resell your phone as a new or refurbished one...

A: Because we are NOT A RETAILER, we cannot LEGALLY SELL YOUR PHONE. We can only salvage it to assist other subscribers with obtaining the phone they want.

3. The only good things about this service is that you pay no shipping costs, Or did I? and I got a new phone by the next day.

A: For Verizon our standard shipping is NEXT DAY, EXCLUDING Weekends and Holidays through DHL. The standard cost of shipping a phone is $25 next day. That is included in the price of your deductible. I'm sorry that's the only GOOD thing you found in your experience.

4. I thought insurance was suppost to help your wallet...

A: Well, if you think of the Insurance Program sort of like a Savings Account (you're paying $5 in premiums every month in case your phone gets damaged. you try putting that in your savings account every month and see if you can get a phone for that much the minute your phone breaks) we're not breaking your wallet. The average cost of a BASIC phone is $200-$250 directly from your service provider with no discounts. If you want a super-ultra thin phone with all the gadgets such as a camera, mp3 player, pda, texting keyboard, video features, and v-cast, you're running about $500, unless you're eligible for another 1-2 year contract, and even so the company is still making its money back. Try getting a better deal on e-bay. You're more likely to get burned.

5. One guy says the phone they sent him was used...

A: Again, please refer to the salvage section above.

6. ...had scratches on it and didnt work...

A: See Above. I also explain that if you receive a refurb, it comes with a warranty. As a matter of fact, if you're a verizon customer and your first phone is a refurb and it doesn't work, then the next phone is required to be brand new. How about that one? We replace it for free with NO EXTRA CHARGES. Not even shipping. We do care about you as a customer... it just seems you got a couple bad representatives.

7. ...his Verizon local store told him the company is ripping every one off!

A: Verizon has a contract with Asurion. We are not to disrepect their company and they-us as well. Because I do deal with irate customers on a daily basis, it's not uncommon for me to hear this, and it saddens me that it happens. What it is doing is tarnishing the relationship between Asurion and its clients and making the consumers feel as if it is cheated. You do not know the number of times I've spoken with a Verizon representative (or a T-mobile or Alltel representative for that matter) who CLEARLY did not understand the policy that we offer to their customers. It's almost as if Verizon also needs to be fully aware of how the policy works and what is required to file or complete a claim. Allow me to explain in the next portion of my rebuttal.

WHERE YOUR MONEY GOES.

Average cost of a BASIC phone: $200-250
(rebuilt phones typically cost $100-150 for a basic phone, includes labor)
Shipping: $25

Total: $125-275

If you buy a phone from your carrier and sign a contract, you're paying $40-50 for 12-24 months to recoup the cost of the phone.

Total: $480-600 for 12 months, $960-1200 for 24.
(I could buy a car for that much!)

WE CHARGE YOU:
$5 premiums (for 6-14 months average. equals $30-70)
$50 deductible (includes shipping)

Total: $80-120

Difference: $45-$155 saved by using Insurance vs buying directly from the manufacturer, $400-520 for 12-month contract and $880-1120 for a 24-month contract from your service provider. Not to mention you won't have to pay any ETFs (early termination fees) if you decide to cancel and you're NOT UNDER CONTRACT WITH YOUR SERVICE PROVIDER! Personally, I'd LOVE to have that $1120 right now to go toward my bills.

Reminder: With any company, there are other places that the money goes, for example, to the employee you talk to on the phone. The numbers listed above are merely estimates to give you an idea of where your money is really going.

Now that I've fully explained the insurance for you, maybe you'll take into consideration that Asurion as a whole isn't a bad company. Take the advice of other customer service representatives who have posted on this website in the past and try to catch flies with sugar. It really works. If you have a problem with a representative, that's fine. Just hang up, call back and maybe the next person would be able to better assist you. If you're still having problems, don't be afraid to talk to a supervisor. I can assure you that one of us would be happy to assist.

Sincerely,

Your slightly annoyed Asurion ACC rep.