from Hacker News

The Applecare Hustle

by DenverCode on 9/6/21, 6:40 AM with 105 comments

• by mehwoot on 9/9/21, 4:45 AM

  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 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.

• by jeroenhd on 9/9/21, 10:31 AM

  The real hustle isn't Apple's insurance, but the ludicrous prices they ask for repairs. $380 for replacing some foam? $380 + 2 x $115 for a manufacturing defect? Hell, $700 dollars for replacing a screen? Or even worse, $520 for fixing some basic issues with a watch?

  For all of those repair estimates you could've bought one or even two similar devices from other brands. I understand that people get locked into the Apple ecosystem, but even then they should be able to spot these outrageous bills, shouldn't they?

  Apple can greenwash their product all they want but as long as it's cheaper to buy a new device from their competitors each year than to repair their old devices, their claims can go right intotthe garbage.

  I've paid €200 for a screen repair on my phone, of which the part itself cost about $120 (because I couldn't be arsed to learn how to use a heat gun) for a screen that's bigger and is frankly of better quality than that of a similarly sized iPhone of the same build year. The screen replacement service was a third party, so they didn't even have the advantage of controlling the flow of replacement parts to repair centers, instead having to buy the components off the internet. Apple's repair program is a complete sham, and the fact someone has needed this many repairs in only three years is a testament of their devices' lack in build quality to boot.

• by wefarrell on 9/9/21, 5:21 AM

  An independent repair shop would have been able to perform those repairs for ~1/5th the price. This is what I've experienced when comparison shopping repairs.

• by apazzolini on 9/9/21, 4:37 AM

  The 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.

• by Chernobog on 9/9/21, 9:51 AM

  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.

• by ssivark on 9/9/21, 4:40 AM

  1. 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!?!?!?!?

• by Hamuko on 9/9/21, 4:28 AM

  This 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.

• by FiReaNG3L on 9/9/21, 10:23 AM

  Fun bit is that in this precise case, the people selling you the insurance are the same people that set the cost of repair... no way that they are inflating the second to justify the first, is it?

• by pbourke on 9/9/21, 5:25 AM

  My last phone was replaced once and my current one has been replaced twice, both under AppleCare. I view AC as “phone as a service”, which is reasonable. The recent option to add accidental drop and theft coverage onto the base AppleCare seems to be making that explicit. I’d like to always have a phone and have it be replaced quickly if it goes kaput.

• by rubyfan on 9/9/21, 11:52 AM

  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.

• by FredDollen on 9/9/21, 1:06 PM

  Read thru all the comments, and surprised to see nobody recommending self insurance. For gadgets like this, take the money you would have paid for insurance and put it in a savings account. If you need a repair, pay from that account. After several years, you'll build up a substantial balance.

• by ed25519FUUU on 9/9/21, 5:26 AM

  > 2021: Dropped, broken screen (365$ repair down to $0 under AppleCare)

  iPhone screen repairs cost almost $400??

• by ChrisMarshallNY on 9/9/21, 10:21 AM

  In my case, getting AppleCare on my computers has well been worth it.

  I use laptops, pretty much exclusively, though they spend most of their lives docked. They run continuously, for 10-16 hours per day, fans whirring (Xcode, dontcha know).

  I treat my computers well, but ride them hard. Cosmetically, they always look great, but I have had some severe problems.

  My 2017 MBP suffered multiple problems at once, and they ended up replacing pretty much the entire internal computer (not sure why they didn’t just replace the whole unit).

• by brailsafe on 9/9/21, 10:04 AM

  This guy, true to his name, buys a lot of Apple products and Applecare. I've had decent results with only purchasing AppleCare on my laptop (though unhappy that I had to and sometimes being told I'm required to wait for them to ship it away for a week), but found that Apple has tried to outright scam people with older hardware and trivial repairs. Sometimes suggesting what they definitely wouldn't be so keen to do under warranty, such as replacing their entire computer instead of getting their battery or screen replaced.

  Sadly, I've had to have enough major defects that while I'd continue buying Macbooks, I'd have to buy the extra coverage, and I guess that's probably by design.

• by tomduncalf on 9/9/21, 11:02 AM

  I feel it's been worth it for me on my laptop (top spec 16"), I had one of the cursed 2017 butterfly models which I eventually got them to replace with a 2019 model (with a spec bump, which I paid extra for) after multiple repairs. I might have been able to get the replacement without AppleCare (under EU consumer law for example) but I definitely got the sense that it was much easier because I had AppleCare.

  I then spilled beer over the replacement and was able to get basically the entire laptop replaced for the ~£300 accidental damage charge. I might have been able to claim this on my home insurance, but again, much more straightforward with AppleCare.

  Not sure I'd bother on lower priced items though.

• by thinkloop on 9/10/21, 5:47 AM

  Insurance is a premium paid to reduce volatility. If one can afford the volatility, then that person should definitely not get the insurance. A typical HN'er should probably not insure things under $2K. Insurance is NOT about trying to "profit" by better analysing a transaction. It is a service purchased for volatility-reduction.

• by rietta on 9/9/21, 9:58 AM

  AppleCare (a manufacturer’s original warranty) plus a one to two year credit card extended warranty is pure gold. Apple or Amex has paid to repair or replace every MacBook Pro I have owned for 13 years.

  Think of it this way, laptops by their nature do not fair well under heavy usage in the year after Apple designed them to last.

• by elil17 on 9/9/21, 12:57 PM

  Compare it to the cost of third party repairs and AppleCare starts looking like a truly bad deal. I paid $70 to replace my iPhone 7 screen this year, which would have cost $150 from Apple themselves.

• by pavlov on 9/9/21, 5:01 AM

  I 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.

• by cassac on 9/9/21, 1:09 PM

  Looks like he’s not including the repair fees, so his apple car costs are actually 198 more.

  But this is only for 3 years??? Some people are just prone to break stuff I guess.

• by lobochrome on 9/9/21, 5:13 AM

  I remember a course on game theory at business school where we proved all insurance to be non-optimal. There were two ways to deal with catastrophic risk if I recall correctly, depending on the gain function:

  a) if catastrophic risk is infinite - no premium will be acceptable due to price.

  b) if catastrophic risk is discrete - it is optimal not to insure since the expected loss is ruinous anyways.

  Led me to be highly skeptical of all insurance ever since. Paying out of pocket previously felt scary - now it feels good since I know I am saving money with acceptable risk.

  Of course - I am more than happy to have mandatory insurance for healthcare, liability, etc. since I am not living in the US.

  Going back to my game theory text books now :)