The Applecare Hustle
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The Applecare Hustle
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Re: The Applecare Hustle
#2This seems crazy expensive. $2,097 in the span of three years?
My home insurance is merely about 130 € per year and covers all of the accidental damage to all Apple (and all other) products in my home. Granted, the deductible is 150 €, so I'd only be able to get the screen repair of my Apple Watch down to 150 € (instead of $99), but it seems like hell of a lot better option than buying AppleCare.
Re: The Applecare Hustle
#3The only Apple device I buy Applecare for is the Airpods because the battery really does degrade dramatically. I set a calendar reminder for a few weeks before expiration to get them replaced.
Re: The Applecare Hustle
#41. Is this much repair indicative of abnormal use, or are Apple products not really robustly designed?
2. Why are repairs so damn expensive? Several hundred dollars each to repair a scratched screen or replace a torn earcup fabric!?!?!?!?
Re: The Applecare Hustle
#5In 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 if something really bad happened to my house, it would cost far more than the sum of my insurance payments to fix it, and I don't have that sort of money. I am losing money on average, but I guarantee I will always have a house, so overall I am better off by reducing the extremeness of the worst case situations.
This is why I don't buy insurance or extended warranty for anything I can pay to replace. A company wouldn't offer it if they didn't expect to make money, and I can afford to replace a phone or my luggage, so I'm happy to just take the risk. I buy home insurance because I can't afford to replace my house and travel insurance because there are countries where emergency medical bills can bankrupt you. The government also forces me to buy third party insurance to drive my car, which seems fair enough since I can't afford to pay damages for someone permanently crippled from negligent driving.
In the case here for apple care, I'm not sure. What apple charges for repairs almost definitely has markup, so it's possible that they can provide insurance that averages out below the expected "cost" of repairs but still makes apple money. So maybe it is actually a win-win. Definitely makes sense to add it all up and see if you're getting value for money.
Re: The Applecare Hustle
#6This seems crazy expensive. $2,097 in the span of three years? My home insurance is merely about 130 € per year and covers all of the accidental damage to all Apple (and all other) products in my home. Granted, the deductible is 150 €, so I'd only be able to get the screen repair of my Apple Watch down to 150 € (instead of $99), but it seems like hell of a lot better option than buying AppleCare.
How on earth is home insurance so cheap in the UK?
In the US, the average policy is around $1,500/yr, the deductible is $500-$2,500, and your rates will go up the more claims you make -- so obviously nobody uses it for a damaged phone.
I'm baffled by how UK insurers could possibly turn a profit on insurance... if people were filing a claim for every piece of technology they owned every time they accidentally damaged something, it seems like that alone would make it unprofitable. Not even accounting for, you know, actual theft and home damage.
I feel like something's missing here but I can't tell what.
Re: The Applecare Hustle
#7I buy AppleCare on any Mac that I expect to probably resell down the road, since it transfers with the device. It improves the resale value enough to make the insurance a more attractive proposition.
Re: The Applecare Hustle
#8In 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…
> What apple charges for repairs almost definitely has markup, so it's possible that they can provide insurance that averages out below the expected "cost" of repairs but still makes apple money.
For them to make money from offering the insurance, it would have to be a gain over their alternative of you not having the insurance and then paying them to repair the device if it breaks.
They also have to be making enough to cover the moral hazard. People who buy insurance are more careless because someone else pays for the carelessness, so the insurance has to be more expensive by the amount of the resulting increase in damage.
Re: The Applecare Hustle
#9In 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…
Don’t forget insurance prices are also tailored to your particular risk as much as the insurance company can figure out how. Meanwhile, AppleCare is the same fee for everyone. So for you, your risk model might say that AppleCare isn’t worth it. But for someone else who has a much higher risk of accidental damage (for example, parents of young kids) AppleCare might be a far better value proposition.
Re: The Applecare Hustle
#101. Is this much repair indicative of abnormal use, or are Apple products not really robustly designed? 2. Why are repairs so damn expensive? Several hundred dollars each to repair a scratched screen or replace a torn earcup fabric!?!?!?!?
1. The latter. 2. Apple's greedy anti-repair tactics.
Louis Rossmann's videos are definitely worth watching.