Asurion, cell phone insurer, reaping profit Olga Kharif,Brad Stone, Bloomberg Businessweek Saturday November 13, 2010 04:00 AM
Verizon Wireless calls its mobile phone insurance program Total Equipment Coverage. Sprint Nextel has Total Equipment Protection. T-Mobile USA: Premium Handset Protection. The names are barely distinguishable, and the insurance all comes from the same place: Asurion, a 16-year-old company in Nashville that would prefer you never heard of it.
Asurion, which has 5,000 employees in more than two dozen offices around the world, is the quiet giant of the mobile phone industry. The four top wireless carriers offer its insurance exclusively, and more than 20 percent of the
293 million mobile customers in the United States pay surion to protect their handsets, according to the company. Asurion charges policyholders between $5 and $12 a month, depending on the model and type of coverage. If a customer loses a phone, breaks it, drops it in the toilet, or renders it unusable in any way, Asurion will try to ship a replacement in a single day - after the person pays a deductible.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.
"We think it's worthless," said Michael Shames, executive director of the Utility Consumers' Action Network. Consumer Reports magazine advises cell phone shoppers to skip the coverage and hang on to their old phones as a backup should the new hardware meet its demise.
Asurion disagrees with those opinions, of course, but just getting the company to pipe up in its own defense isn't easy.
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