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The Applecare Hustle

basicappleguy.com

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Re: The Applecare Hustle

#71

Post by hellbannedguy »

roenxi wrote: post #58
fnordsensei wrote: post #18

Earlier quoted context omitted.

During my decade or so as a consultant, I did a project with one of the oldest insurance companies in my country of residence (they've been around for well over 200 years). They made sure I was aware of their history, in order to understand their business. They started out insuring farms against calamities. If a farm burned down, it was a proper disaster: for the farmer, for everyone who worked there, and for the sur…

I'm staunchly anti-insurance in most cases, as once someone is making a profit it can't be a positive-expected-value deal. But that angle seems to have been covered already so just to be different - insurers also have the strongest incentives in the market to make sure risks don't play out. There is nobody with more at stake in the event of a bad flood or other disaster. The incentive structures around insurance (in…

I was told by a working political consultant, that insurance industry lobbiests basically control Sacramento.

They poured a lot of money into political coffiers when CA decided to go to demanding auto insurance at DMV. (Before auto insurance was required, but not demanded. So basically if you wanted to chance it, you could drive witout insurance.)

Thus guy told me the Insurance induesty gives politicians the most amount of money, behind unions.

Why is the insurance industry so concerned with state bills?

I think we all know the answer. And I'm at odds at what the Insurance Commissioner does all day? I guess a VPS to Pornhub?

Re: The Applecare Hustle

#72

Post by beckman466 »

mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

> Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it.

> This is why I don't buy insurance or extended warranty for anything I can pay to replace.

Yes, yet you're forgetting that this is only possible for privileged knowledge workers, as well as capitalists. That group of knowledge workers, specifically, is only a tiny percent of the working class overall (all those who are paid in wages, and who do not own capital such as land, machines or intellectual property, etc.), especially when you include both the working class in the global north as well as the global south.

For a lot of 'non -knowledge worker' working class people this threshold of affordability, for being able to buy a replacement when something breaks etc., is much much lower. They are forced to live paycheck to paycheck, and do not have the financial security available for emergencies.

Add to this equation the parasitic American credit card industry, and the toxic culture of excessive credit card spending they have created (which is reinforced and perversely rewarded by the US' shoddy credit rating system, no less) and your hypothetical scenario starts to crumble under the weight of the reality of the capitalist exploitation that the US working class has to deal with in the US today.

In other words, yes, you might be able to replace your iGadgets because you're cash flow positive due to your privileged position and ability to withstand the manipulation described above, yet many really cannot, by no fault of their own.

I am excited for the open protocol, cooperative, insurance/saving pools/mutual credit funds that are emerging; such as what is used in Enspiral circles (CoBudget.co) [1] and elsewhere, which allow small groups of people to build financial resiliency together without the ultra-financialized, rentierist capitalist insurance industry in the middle.

Another exciting alternative/example/experiment is the unemployment insurance circles in the Netherlands, called Broodfonds (translates to 'Bread-fund').

[1] https://medium.com/enspiral-tales/grow-your-own-economy-in-a...

Re: The Applecare Hustle

#73

Post by benjaminwootton »

roenxi wrote: post #58
fnordsensei wrote: post #18

Earlier quoted context omitted.

During my decade or so as a consultant, I did a project with one of the oldest insurance companies in my country of residence (they've been around for well over 200 years). They made sure I was aware of their history, in order to understand their business. They started out insuring farms against calamities. If a farm burned down, it was a proper disaster: for the farmer, for everyone who worked there, and for the sur…

I'm staunchly anti-insurance in most cases, as once someone is making a profit it can't be a positive-expected-value deal. But that angle seems to have been covered already so just to be different - insurers also have the strongest incentives in the market to make sure risks don't play out. There is nobody with more at stake in the event of a bad flood or other disaster. The incentive structures around insurance (in…

I pay £30 a month to insure an £X00k bill if my house develops a catastrophic problem. That’s +ve EV regardless of the numbers because the risk avoidance has “value”.

Re: The Applecare Hustle

#74

Post by Causality1 »

mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

Too many people treat every dollar as if they were equal to each other in value when they obviously are not. Your last dollar is a lot more valuable than your hundredth, which is more valuable than your thousandth, which is more valuable than your millionth. That's the point of insurance, spending your less valuable dollars.

Re: The Applecare Hustle

#75

Post by ComputerGuru »

exporectomy wrote: post #62
Chernobog wrote: post #53

AppleCare is such a non-issue here in Norway. We have five years of "reklamasjon" (think of it as kind of a mandatory warranty). I wonder how electronics would have been built if this was a global thing.

Surely that doesn't cover accidental damage like AppleCare does? Apple already provides normal warranties too.

Isn’t the iPhone warranty just one year in the USA?

Re: The Applecare Hustle

#76

Post by MandieD »

choeger wrote: post #51
echelon wrote: post #40

Earlier quoted context omitted.

> my car is insured to 20M in damages p.p. How much does that policy cost? Are you hedging against running into a gas pipeline, school bus full of children, or something along those lines? I'm honestly really curious about this.

This is Germany. I think the 20M is a legal requirement or derived from a legal requirement (by adding something on top). This car insurance costs me around 40€/month, but there's a steep curve based on how many years you've been free of damages. A new driver would pay around 6 times as much, AFAIK. The reasoning behind the high damage rate is indeed the risk to it injure a child for life. In that case the insurance…

Legal requirement for personal automobile liability insurance in Germany is 7.5M EUR for personal injuries and 1.2M for property damage. I was startled when I moved over here from Maryland, where $500k liability limit was the highest available from Geico at the time.

We have an umbrella liability policy for 100M EUR - generally recommended in Germany. Our home insurance is less than 300 EUR/yr. Most expensive insurance we have is long-term disability. However, we do not insure older used cars for anything other than liability, and certainly never insure consumer electronics. If a month’s pay could replace it, or it’s not something that absolutely must be replaced right away, we wing it. Insurance is for risks that we could not cover from savings or that would cause long-term financial hardship, not disappointments.

Re: The Applecare Hustle

#77

Post by my123 »

csomar wrote: post #65
mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

> The point of insurance is to amortise risk. I don't think so. Insurance doesn't amortize risk for the individual (though it amortizes risk for the pool). Say you have a 1 in 1.000 years of your house getting destroyed in an earthquake; this means you most likely will never get a payout in a 50-60 years period. If you pay 1 in 500 odds (the insurance makes money), you can never amortize this risk over your lifetime.…

In many countries, you aren’t allowed to bundle insurance with a product.

Re: The Applecare Hustle

#78

Post by matwood »

roenxi wrote: post #58
fnordsensei wrote: post #18

Earlier quoted context omitted.

During my decade or so as a consultant, I did a project with one of the oldest insurance companies in my country of residence (they've been around for well over 200 years). They made sure I was aware of their history, in order to understand their business. They started out insuring farms against calamities. If a farm burned down, it was a proper disaster: for the farmer, for everyone who worked there, and for the sur…

I'm staunchly anti-insurance in most cases, as once someone is making a profit it can't be a positive-expected-value deal. But that angle seems to have been covered already so just to be different - insurers also have the strongest incentives in the market to make sure risks don't play out. There is nobody with more at stake in the event of a bad flood or other disaster. The incentive structures around insurance (in…

> I'm staunchly anti-insurance in most cases, as once someone is making a profit it can't be a positive-expected-value deal.

Are you also against loans?

Insurance is just a way offload risk onto someone else for a fee. An insurance companies profits are not risk free, but they hope a large diverse pool of insured will keep them from being wiped out in a large event.

Most of us don't have a choice on whether to carry insurance or take out loans. I think it's more interesting to look at what the rich do, and from my reading it seems to be mixed depending on cost.

Re: The Applecare Hustle

#79

Post by rubyfan »

The article misses the point of insurance (which AppleCare actually isn’t technically). AppleCare is an extend warranty program which includes accidental damage coverage. There is a manufacturer/ customer relationship component here that the author might be overlooking.

Those expensive but cosmetic fixes aren’t the kind of thing you use insurance for generally. If you are Apple you might be happy to keep your customers on the latest OEM accessories and machines in good repair. Profit on the plan isn’t the only reason to offer AppleCare. Keeping consumers buying the next greatest Apple device might be part of how Apple value AppleCare. Apple may be designing the coverage to be used as the author is using it in which case makes the plan less profitable than we all might imagine. However the overall customer lifetime value benefit to Apple is probably still positive.

Re: The Applecare Hustle

#80

Post by rzwitserloot »

mehwoot wrote: post #5

In contrast, the insured often relies on a recollection of their history and a ton of emotional reasoning to decide if they will be the statistical oddity to make "a profit" of having bought insurance. This isn't generally the point of insurance. The point of insurance is to amortise risk. Yes, the insurance company expects to, on average, get more money from insuring my house than the cost of any damage to it. But i…

> This is why I don't buy insurance or extended warranty for anything I can pay to replace.

Exactly. _Given_ that this is a situation where I'd assume the vast majority of those who could buy the AppleCare brand of insurance could instead just pay for the replacement (how many people can afford precisely 1 macbook but couldn't possibly afford a second one? Some, but not many) - the only thing left to 'play' is to be so sure that you'd be the statistical oddity, that it is 'worth' it.

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