Consumers love their smartphones. The convenience is a huge benefit: email, contacts, photos, calendar, travel directions, and plenty of customized, personal data readily available 24/7/365 at your fingertips wherever you go. How should you protect yourself if your smartphone is lost, stolen, or breaks?
Some consumers go it alone and pay out-of-pocket to replace their smartphone when it is lost, stolen, or breaks. Some consumers pay for smartphone insurance from a company named Asurion. The Asurion website presents an impressive description and benefits:
"... 60 million phones are lost, stolen or damaged each year. Without insurance, the average cost of replacing your phone is $300! Our coverage protects you from phone loss, theft and damage (even water damage). We offer fast, easy replacement with overnight shipping to any address you choose... Over 90 million wireless customers around the world just like you are protected by Asurion. Asurion partners with North America’s top 5 nationwide wireless carriers, many regional providers as well as other worldwide wireless companies to help customers get a replacement phone quickly..."
Asurion covers a variety of mobile devices: cellphones, smartphones, and tablets. A Mobile Recovery app allows users to remotely lock and wipe a stolen or lost smartphone.
When Wenner Exius bought his Android 2 smartphone in October 2010 with service from Verizon Wireless, he signed up for the smartphone insurance from Asurion which Verizon had arranged, and paid $6.99 per month premium. I happen to know Wenner personally, as we were coworkers at a digital agency in Boston about six years ago.
This summer, Wenner suffered a broken leg that forced him to work from home during his recovery. As a copywriter at a digital ad agency in Chicago, working from home was an option as he had a laptop and smartphone. While working from home, Wenner's Android 2 smartphone stopped working. Wenner contacted Asurion and received the following email:
From: Asurion - firstname.lastname@example.org
Date: Mon, Aug 15, 2011 at 8:30 AM
Subject: Asurion Confirmation.
"Dear WENNER EXIUS,
Thank you for contacting Asurion and filing your claim with us. Our mission is to help you reconnect with your world quickly, easily, and at a cost far less than paying full price for a new device! For your convenience, simply click on the links to the right to obtain all the information you will need as you move forward with your claims process. You should also receive a separate shipment tracking e-mail within the next 12 hours*.
For security reasons, please click here to retrieve your Claim ID. Once you are redirected to the website, simply enter your wireless number, the security code, and then click the “Forgot Claim ID?” button.
As a reminder, please return your defective device by using the return envelope provided within 15 days to avoid a non-refundable charge to your credit/debit card. Please note that this process does not apply for customers with a lost or stolen device.
If you experience any issues with your shipment you should contact Asurion within 7 days. Additionally your replacement device is under Warranty with Asurion so if you experience any operational problems with your device within the next year, please contact us."
Wenner filled out the appropriate paperwork, paid the $99 deductible, mailed his broken Android 2 smartphone to Asurion in the packaging provided, and waited for Asurion to send a replacement smartphone. When the replacement arrived, he started using it immediately. Like many consumers, Wenner never turns off his smartphone. It stays on for days or weeks at a time. When he did turn off his replacement smartphone, it wouldn't turn back on again.
Wenner contacted Asurion again to return and replace his defective replacement smartphone. Asurion denied this request, stating its policy that he did not contact Asurion within 7 days about a defective replacement smartphone. No credits either.
To get work done at home, Wenner paid $200.00 out-of-pocket for a new smartphone since he couldn't get a working replacement smartphone from Asurion. Wenner is dissatisfied with Asurion's customer service, partly because of the economics. His total payments to Asurion:
$76.89 (11 months X $6.99/month premium)
+ $99.00 deductible
$175.89 total (for a non-working replacement smartphone)
The payments are about the same as what Wenner paid for a new smartphone. He questions the benefits of smartphone insurance with Asurion insurance provides, since he doesn't have a working replacement smartphone from Asurion. He admits that he contacted Asurion about the defective replacement smartphone after the 7-day period, but believes that the company did not adequately explained the 7-day limit. As proof, Wenner cites the above email he received from Asurion.
Second, the Asurion website is all about claims and not for prospective customers. Links about claims dominate the home page. It does not appear that an individual consumer can sign up for an insurance product directly at the Asurion website. Consumers must sign up through their mobile service provider. So, I visited Verizon's website, selected "Illinois" and searched the website for information about Asurion. The Verizon website returned this search result:
I selected the "Total Equipment Coverage" link above, and the Verizon Wireless website displayed a detail page about the smartphone insurance plan Wenner purchased:
"Total Equipment Coverage offers combines the benefits of Asurion’s Wireless Phone Protection with the Verizon Wireless Extended Warranty program and is now enhanced with Asurion’s Mobile Recovery on compatible devices. If your device or covered accessories are lost, stolen, damaged or experience a mechanical or electrical defect after the manufacturer’s warranty expires, you are protected.
- $6.99 per month per covered device.
- $99 non-refundable deductible per approved claim.
- 2 replacements in a 12-month period with an equipment maximum of $1500 per claim (in New York, 2 claims per policy year)
Replacement devices may be remanufactured equipment. If the same model is not available, a comparable model will be provided. You may cancel at any time and receive a prorated refund of your monthly fee. For a list of equipment in the Phones, Advanced Device and Tablet programs, please visit Asurion's website or call Asurion at (888) 881-2622."
This page was somewhat helpful, but it didn't mention anything about the 7-day limit by Asurion. A document at the Asurion-Verizon website seems to include the smartphone insurance plan terms and conditions (1.9 MBytes, PDF) for the plan Wenner purchased. Section 2H mentions a 60-day period for late claims. I did not see anything in this document about the 7-day period deadline for notifying Asurion about defective replacement smartphones.
I tried to contact Asurion about the 7-day notice policy and to get the company's point-of-view on the situation, but emails to the company went unanswered.
I re-read the above email and the last paragraph in it does not seem to clearly convey Asurion's position about what happens when users do not contact Asurion within the 7-day period. There also seems to be some ambiguity in the email about exactly when the 7-day period starts. Does it start from the date of the above email message, or when Wenner received the replacement smartphone? Regardless, that is not much time for a consumer to fully inspect and test a complicated device such as a smartphone; especially when the replacement is a different brand and/or model.
Wenner wants his $99 deductible back since he never got a working smartphone from Asurion. He plans to cancel his smartphone insurance with Asurion.
I began to wonder if Wenner's experience with Asurion was unique. A quick search of the Internet discovered stories from many other consumers who experienced customer service problems with Asurion. While the company has an A+ rating by the BBB, actual reviews and experiences by customers tell a different story. The Consumer Affairs website lists numerous complaints about refurbished replacement equipment, damaged replacement equipment, and incorrect billing issues. Many of the stories are similar to Wenner's.
You can read more experiences reported by customers at Ripoff Report. In November 2010, BusinessWeek reviewed Asurion and reported:
"Some accident-prone owners—and parents of phone-toting kids—praise the sense of security Asurion provides. Consumer advocates, though, almost uniformly say the insurance isn't worth the extra expense... Those refurbished phones may not even work that well. Robert Nissenbaum, owner of Blue Ridge Wireless Cell Phone Repair Center in Tucson, Ariz., sees many used phones from Asurion and other, smaller insurers..."
Is this smartphone insurance plan from Asurion a good deal? You'll have to decide for yourself as your mobile usage habits probably vary. Some people are harder on the equipment than others. In my opinion, this Insurance plan coverage is weak for the following reasons:
- Asurion doesn't guarantee new equipment and delivers re-manufactured equipment
- Asurion doesn't guarantee that the same make and model smartphone will be available as a replacement
- Consumers are limited to two replacements per 12-month period. A smartphone is a high-use mobile device prone to abuse (e.g., drops, weather, liquid spills) and theft
- Full disclose seems spotty. Neither company's website provides easy access to the full insurance plan terms and conditions for prospective customers. The above Verizon copy directs users to the Asurion website and the Asurion website requires customers to log in to view the terms and conditions
- As Wenner's experience showed, the amount he paid in insurance premiums just about equaled what he paid for a new smartphone
- Based on the Asurion website pages and documents I have seen, the disclosure of terms and conditions seems sloppy
- The experiences reported by Asurion customers describe questionable customer service quality
What do you think? Is smartphone and mobile device insurance from Asurion a good deal? If you signed up for smartphone or tablet insurance from Asurion, please share your experiences.
[Update: Sept. 15: Wenner reports that Asurion has contacted him and now claims that they never received the original defective Android he sent to them.]
[Update: Sept. 20: I received the following email from a representative at Weber Shadwick, the public relations agency representing Asurion:
From: Kokoruz, Aaron (DAL-WSW)
Sent: Tuesday, September 20, 2011 12:35 PM
Subject: Asurion Sept. 14th Blog Post
Dear Mr. Jenkins,
I am emailing in regard to your September 14th blog post about Mr. Exius’ experience with Asurion. First and foremost, allow me to extend my sincere apologies for the frustrations that Mr. Exius felt. We understand that losing or breaking a mobile device is a stressful situation for anyone, even more so for Mr. Exius coping with a broken leg and the need to work from home. We always work hard to ensure our customers have a positive experience and we’d like to do what we can for Mr. Exius.
Every year we provide millions of customers with replacement phones so that they can reconnect with family and friends as quickly as possible. We ask every customer with whom we interact to rate their experience. Any customer expressing dissatisfaction is contacted by Asurion for more information. Happily, most customers are pleased with our service and value. However, we realize in this case we didn’t meet the customer’s expectations.
We carefully review the feedback we receive online and appreciate the details that you provided in your blog. We take your comments seriously and will use the opportunity to speak with Mr. Exius directly to further discuss his experience and see how we might provide better service going forward.
Thank you for bringing this to our attention.
Aaron Kokoruz on behalf of Asurion
1717 Main Street, Suite 1600
Dallas, TX 75201"]