Most people that pay for their monthly insurance policy with carriers like Verizon are paying a monthly fee without really knowing what they’re paying for. An example is Verizon’s Total Equipment Coverage plan which is a combination of two different programs that Verizon Wireless offers. The first, is an extended warranty beyond the manufacturer’s one year warranty and the second is an insurance policy to guard against accidental damage, theft, or loss. These two plans are actually priced and figured out separately and then combined into a TEC price.
One user tipped us off to the fact that Verizon is raising the price of the extended warranty coverage from $1.81 to $2.81 which increased his overall plan price to $8.00 from $6.99 a month. You have to take into account that Verizon is effectively taking about $12 a year extra per subscriber for no reason at all. In the letter (below) they offer no reasons for the increase, which is due to take effect in September.
What’s even more interesting is that the price increase goes directly to Verizon Wireless. That is because the Asurion insurance program is operated by Liberty Mutual Insurance, which means that Verizon simply pays them to operate it and Verizon has less control over the price of that program. However, this extended warranty program is actually Verizon Wireless’ own program and the 55% increase in price goes directly to Verizon. Considering that Verizon has over 100 million subscribers and they probably have tens of millions of subscribers on their Total Equipment Coverage plan, this could translate to tens of millions of dollars for Verizon to profit from without a single explanation as to why they deserve to increase the price 55%.
We have contacted Verizon for comment and await their reply.