i'm a VZW rep..
in the first 30 days you can exchange the device for the same device BRAND NEW IN THE BOX for free. You can also exchange for a different device for a $35 Restock Fee (plus difference in phone prices..of course).
BEGINNING DAY 31 your MFR warranty kicks in, for a full year, Verizon will replace your phone under warranty at NO CHARGE if you have a defect...these include, but are not limited to:
-short in speaker
-short in ear piece
-bluetooth not pairing
-unresponsive (but not damaged) touch screen
-non working keys / buttons
-etc-etc-etc...basically along those lines.
if the screen has some minor damage (ie: big black sploge in the corner), the Verizon store-AT MANAGERS DISCRETION can replace it for $50-because it is technically not covered under warranty.
In either case, Verizon provides you with a CERTIFIED LIKE NEW REPLACEMENT, these replacements are usually 30 day swaps reconditioned BY MOTOROLA (or RIM or LG or Samsung..depending on the phone of course).
If your phone is damaged severly (read: shattered screen, broken hinge, etc) or liquid damaged, or lost / stolen. Without insurance, VZW will offer the one year pricing on a new device.
WITH INSURANCE, you will pay Assurion an $89 deductible, and they will overnight you a new Droid.
hope that answers everything....as i said...i AM a Verizon rep