Comment by wat10000
2 days ago
Financially speaking, you shouldn't insure what you can afford to repair or replace, unless you're well above average risk for some reason. Of course, peace of mind is an emotional calculation that may come out differently.
> Financially speaking, you shouldn't insure what you can afford to repair or replace, unless you're well above average risk for some reason.
I know that my MacBook and phone batteries wear out (<80%) pretty quick, and a single free replacement with AppleCare would pretty much let me break even on cost.
Weird. Must be unusual, otherwise AppleCare would cost more.
Right, although repair with Apple devices is a tricky/impossible cost calculation to make. I also remember the "good old days" when you could bring an iPhone with issues into the store and likely get a replacement just by asking nicely.
They still do that. I just replaced my 15 Pro which had a speaker problem. They gave me a brand new one and migrated everything there in the store for me. 100% battery health again. No money paid. Nearly 2 years old.
I turned screws in an Apple Store in that era, circa iPhone 3G/4.
Internally that policy was called “getting to yes” and it was a huge pain in the ass.
The idea: customer comes in with a broken screen. You surprise and delight them by getting a manager’s override on the cost. You say you can make an exception because it’s the first time, but the next screen will cost x.
The reality: customer comes in expecting free repairs. Any charge is an argument. Their cousin dropped like 5 phones in the toilet and they were all replaced for free, etc. It sucked.
> Internally that policy was called “getting to yes” and it was a huge pain in the ass.
I don't remember a "getting to yes" era, especially when I brought in my old MagSafe 2 charger whose cable insulation had worn out because of the type of plastic Apple used, spilling blue stuff all over my space.
All the Genius Bars I went to (in multiple countries) gaslit and blamed it on me storing my MagSafe charger wrongly, even though this was obviously Apple's fault. I wish I could have been surprised and delighted instead.
I still have it in a plastic bag somewhere, rotting away.
The era before they became waterproof and the screens got some decent durability were, I'm sure, a nightmare. The 3G in particular was a huge ergonomic and quality downgrade from the original iPhone, I had one of those break while just sitting in my pants pocket.
That’s not how risk management works.
For an individual it kind of is. To calculate the financial value of an insurance plan you would multiply the average cost of a claim by the probability of it occurring, and divide that by the average expected number of months until claim. For all insurance, the monthly fee is more expensive than the calculation above. This is obvious, because the insurance company needs to make a profit. This implies that no one should ever have insurance. *However,* some events are quite financially catastrophic, and the potential size of the financial burden warrants paying the premium. Examples include houses and cars. Most people can't afford to pay out of pocket if a house burns down.
In the realm of consumer electronics, why would you pay the premium if you can afford to replace the device? Unless, of course, you know you're prone to losing or breaking things.
Many insurance policies also have deductibles as an added cost if you actually need to use it making it even less valuable for things you can afford to fix/replace.
What wat points out is that if you have the finances to replace a device yourself at any point in time due to an _unlikely_ event, it's just a waste to pay a third party for the insurance if _you can handle the risk yourself_.
Applecare+ for an iPhone seems to run at about 80% of the device cost over 5 years, however if you were likely to buy a new device after 5 years anyhow then short of fully losing your new devices every 2.7 years (or replacing the screen every 8 months or so) you're at a financial loss to go with the insurance compared to just buying new devices when the need arises.
That's how I think about it as well. How should I be thinking about it?
Care to elaborate? There's some wiggle room with "afford" which should make it exactly how risk management works.