Entries in asurion (2)

Sunday
Dec102017

Warranty vs Insurance and what it means for you

 

When purchasing smartphones and mobile devices such as iPhones, Androids, Galaxies and tablets the most common question that comes up; typically from a sales rep at your carrier store is: "Would you like insurance for the device?"

Often times we see confusion around what a warranty is, what insurance is and even extended warranty and what they do and don't cover.

 

 

 

  • Warranty

 

 

A warranty is "contract" or claim between the consumer and the manufacturer that the purchased product from said manufacturer will be free of defects in materials and workmanship or it will be replaced within a period of time. Most manufacturers offer a 1 year (12-months) [limited] Warranty whch vary according to jurisdiction, but commonly new goods are sold with implied warranty that the goods are as advertised.

 

  • A warranty is typically free and included with a the sale of a new product from an authorized vendor.

 

"In the United States, various laws apply, including provisions in the Uniform Commercial Code which provide for implied warranties. However, these implied warranties were often limited by disclaimers. In 1975 the Magnuson–Moss Warranty Act was passed to strengthen warranties on consumer goods. Among other things, under the law implied warranties cannot be disclaimed if an express warranty is offered, and attorney fees may be recovered. In some states statutory warranties are required on new home construction, and "lemon laws" apply to motor vehicles."

What this means for you as the end-user customer is if you purchase a device such as an iPhone from Apple they are guaranteeing the device will last a full 12months (1 calandar year) from the date of purchase.

There are exceptions to this implied warranty, such as physical damage, customer tampering and unauthorized modifications.

When a manufacturer produces a [tangible] product they know the exact specifications, working conditions and capabilites of the device. In the case of a phone, it will function as claimed, it will not show any signs of failure, it will remain in good physical condition and lastly it will meet the customers expectations of usability. 

When a customer changes the device from its original condition, as with a broken or cracked screen from a fall or drop, this invalidates the warranty and the claim between the end-user and the manufacturer. At this point the warrenty is no longer valid for said device. 

Another example of a warrenty no longer being valid is when the user chooses to open the device and make modifications outside of the normal operating conditions. This could be such as modifying the software on android by rooting it to run un-approved third party applications, or in the case of an iOS device; jailbreaking would open up the software in the device to make changes that were not intended from the manufacturer.

Exceptions to this are laws passed such as the Magnuson-Moss Warranty Act 

The statute is remedial and is intended to protect consumers from deceptive warranty practices. Consumer products are not required to have warranties, but if one is given, it must comply with the Magnuson-Moss Act.

Enacted in 1975, the federal statute governs warranties on consumer products. The law does not require any product to have a warranty (it may be sold "as is"), but if it does have a warranty, the warranty must comply with this law. The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner.

 

Examples of valid warrenty claims:

 

  • Device not booting
  • Faulty battery causing random shut downs
  • Software inconsistencies 

 

 

Examples of invalid warrenty claims:

 

 

 

 

 

  •  
    • Insurance 
  •  


    Insurance is an optional form of protection on a device often sold with the product at the time of sale.

    Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

    An entity which provides insurance is known as an insurer, insurance company, or insurance carrier. A person or entity who buys insurance is known as an insured or policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and must involve something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.

     

 

 Mobile phone insurance is rarely provided by the manufacturer or vendor, but instead offered by bigger companies. Within the mobile device market exsists 3 main insurance providers; SquareTrade, Asurion, Geek Squad.

 

Mobile phone insurance exsists to cover the gap between a warranty and physical damage caused to a device.

 

Phone insurance is normally provided with a month by month plan ranging from $15 - $99 as well as a Deductible at the time of the claim. The insurance companies will "repair" or replace the device with a unit of the same or similiar model when requested.

Different from a warranty, the insurance will offer a solution when presented with a broken device such as a cracked screen, broken charger port, or liquid damaged device.

The insurance plan is typically attached to a customers bill ontop of a carriers monthly account. This is because most often the carriers are given a share of the payment which is typically passed down to the sales reps in the form of commission, although most insurance providers will offer open enrollment in periods shortly after a device was purchased.

On the surface insurance seems like a great option to protect your investment and potentially extend its life, there are some downfalls which are often not mentioned.

Insurance is a cash cow for everyone involved except the customer, as mentioned previously the sales rep earn commission when included with the sale, this may be at a retail location such as Best Buy, Verizon Wireless, AT&T, Sprint, T-Mobile. Often times the insurance plans will require a monthly fee plus a payment (deductable) when the user starts a claim. Most of the time this amount will exceed the amount of any repair that could have been performed at a local repair shop. When submitting a claim through an insurance provider you often need to provide the original receipt with proof of purchase for insurance. Once this is provided a representative will open a claim with a payment of about $99. (average market price) The user will then need to wait for a replacement phone to be shipped to the customers address within 1-2 business days. Most of the time the phone sent to the user will not be new, but instead be a refurbished device, typically having fake or used parts, often times a phone in lesser condition then the phone submitting a claim for. We've already gone into detail about the devices we see as insurance phones in a separate post:

Secrets Your Mobile Phone Insurance Company Doesn't Want You To Know

If you owned an iPhone 6 for 1 year and then dropped the phone and developed a cracked screen then submitted a claim to an insurance provider such as Asurion or Squaretrade you would typically pay $220 to replace the device. This would be broken down into 12 monthly payments of $10 ($120) + $100 deductable and then wait 1-2 days for a replacement device to be sent. Once the replacement device is received a 72hr window is allowed for the original device to be sent back to the insurance provider. But what if you have sensitive data on the device you wish to obtain before sending away the device? This then causes more expense to the end user to get data extracted from the device from a local repair shop, often times averaging to $65. This claim that was submitted for only a broken screen on a device can quickly rise to be almost $300 when most repair shops offering cracked screen repairs only cost $99 and take less than 20mins, all while retaining the original data.

The insurance providers often only allow 2 claims per year.

 

Insurance providers are so keen on keeping their cash cow flowing that even in the case of claim that was submitted for a lost device they will often block the IMEI or ESN even if the original phone is found. This can prevent some cases of fraudulent claims, but it can also present problems for users who wanted to keep an older device as a backup or transfer files over a cellular network. 

In conclusion, we can see that unless you have suffered loss or theft on a device then it is not finacially sound to use mobile phone insurance as a form of "repair" for you device. 99% of the time most insurance providers will only replace the device, only then to send you a device of lesser quality and force you to pay high fees and wait times for something that could have been repaired same day often within 1hr of the damage at a repair shop.

   

Saturday
Jul292017

Secrets Your Mobile Phone Insurance Company Doesn't Want You To Know

Asurion is a company that works with three of the big United States carriers: Verizon, AT&T and Sprint as their officially endorsed subscriber phone insurance provider. Asurion covers loss, theft, accidental damage, and malfunction—the major things that people typically file claims for. Once the insurance claim is approved you'll be told if Asurion is electing to repair or replace the device— and you don’t get to have any say. If it's the latter, they'll ship it out to you overnight. A phone charger, battery, and a SIM card will be included. It may be new, or it may be refurbished. They do not feel obligated to openly inform you as to which you are receiving, but if it’s a refurbished phone it should have “Refurbished by Asurion” on the back of the phone.

Right from the start it’s easy to see how mobile phone insurance is a scam. The people that work in the carrier stores don’t know the details about how Asurion works as an insurance company, and are primarily motivated by the commission that they receive to by adding subscribers. They aren’t really sure whether or not the insurance is worth it but they know that they gain financially by telling you that it’s a must-have. 

The promise of phone insurance and the reality of it are vastly different. Most people seem to think that if they “break” their phone the insurance is there to replace it with a brand new one. For some, a “broken phone” is really just a shattered screen that could have been replaced at a repair shop for about $100, but instead they send it off to Asurion and have their phone (that had a perfectly functional motherboard and had never seen a drop of water) replaced with a “Refurbished by Asurion” phone whose mobo was shoddily repaired after liquid damage by a half-rate technician contracted by the company to mass repair boards collected from other phones sent to the company from customers that don’t really seem to understand what their phone is worth.

To make a point, a customer could bring a phone into Wires Computing and have us put their motherboard into a different frame that’s in decent shape, with a new charging port, battery and LCD, and they would likely be charged less than $200 depending on the model of iPhone. Alternatively, a person could send out their phone that merely has a cracked LCD and be charged between $150 to $200 depending on the deductible to replace it with a refurbished phone containing an older, previously repaired motherboard. The motherboard in the original phone was flawless, and should have been the part of the phone most valued— and now it is the property of Asurion.

These “insurance phones” are reassembled with replacement copy parts by glorified assembly-line workers. We have seen Asurion phones come into the shop that are taped together behind the LCD, with screws left out or loose in the phone. Unlike the repair shop setting, these people don’t know the customers that are receiving the phones and so they are much less invested in doing a good and thorough job. The longevity of these phones is greatly compromised— and to make matters more difficult, any boards that have been soldered during the refurbishment process no longer have the original clues of corrosion, making it much more difficult for even a highly experienced micro-soldering repair technician to return a compromised motherboard to full function. 

 

Most replacement phones have less than new parts in them that fail pre-maturely and are simply not the same quality of parts a local tehcnician would use. We often see our customers come into the shop with something broken on the asurion replacement phone and after opening it find many issues. Some even being 2-3 year old batteries that have half the life that the original phone had. Adding all the problems up with the phones that are replaced make it surely a crap shoot as to how long they will last. This is often the first time the customer is aware of this, making them wish they had just gotten the phone fixed properly at our local repair shop instead of dealing with a mess of a phone from a big cororation that cares ultimatly only about the bottom line instead of quality phones and parts.

 

To summarize the main points of this article, phone insurance isn’t what you think it is, and rarely is it worth it. Not only do repair shops pay more attention to each individual phone and customer that come through the door, but they have well-trained staff that do a better job in the first place, with the intention of maintaining the phone’s longevity.