I break things infrequently enough that it's cheaper to keep the money I would have spent on protection plans in my bank account, and then just pay out of pocket when I do.

Paying protection to the mob is a good idea in general. Even if you're generally careful, you never know when a leg will break because of something that was your fault.

disclaimer: I have applecare+ on an m1 pro

> you never know when the mac will break because of something that was your fault

You have been gaslit by Apple.

You know when it's your fault... but with Apple, you can never be sure.

I really don't want to own objects that are so needy the require their own insurance policy.

No house, car, utility vehicles?

How about your body? Medical and life insurance are nearly universal.

You should insure things you can't afford to self insure for. Life, Home, maybe car.

You should not pay insurance for all the tech crap we buy. You're just losing money on average. Only way to win with this type of insurance is to be unlucky.

But this is exactly it. Insurance is about relative luck and hedging against being unlucky. It’s all a matter of risk/reward. It’s an ex ante cost.

Much history of costs/return in various domains show the power of ex ante investments vs ex post restitution.

If I spend $1200 on a high end phone, and it costs $300 to replace a screen, or $30 with insurance, after a $200 one time premium for 2 years… it depends how often you break your screen on average. If it’s at least once every 2 years, then yes, it’s worth it. And then that’s not even counting other things that may go wrong.

Same logic for extended car warranties. Sometimes they pay for themselves quickly, sometimes not.

Insurance is never a good idea in general, except if you can't risk paying for it yourself.

Which is nonsense, the whole point of insurance (and why most people should purchase insurance) is to pool risk so to cover high costs that most can’t afford for themselves.

GP is saying that insurance makes sense for things too expensive to replace on your own, like houses and cars, but not cheaper things like consumer electronics.

Consumer electronics in the thousands of dollars I would definitely want insurance for.

You and NorwegianDude wrote the same thing.

>can't risk paying for it yourself.

is intended to mean

>can’t afford for themselves.

“Insurance is never a good idea in general” is a bit too extreme. Not all hedges have to be about protecting you from a wipeout. It’s about opportunity cost for the premium vs the risk (magnitude x probability).

But if that tradeoff were favorable to you, wouldn't that mean it's unprofitable to the company selling it, so they wouldn't?

In many cases, these programs aren’t profitable, especially if the extended warrantee covers products with unknown problems. Neither the supplier nor the purchaser knows the true risks of warranting a new product, they only have historical data to go by. Often they are profitable, on products that actually were far more reliable than consumers expected (eg. Phones whose screens get harder to break). But even then it doesn’t mean it’s a bad idea to buy it, as you can’t predict the future, you can only make bets and cover your risk exposure to some degree. That risk coverage and piece of mind is valuable even if the unlucky event never happens.

At a bigger scale than product warrantees, Health and Life insurance are both profitable but also often worth purchasing to protect you or your family as it’s the ultimate case of hedging against bad luck. You’re trading reasonable, predictable costs against actuarial events with huge (potentially bankrupting) costs. Some folks that didn’t need it, they spent a reasonable an amount of money and still got value out if it: risk coverage and piece of mind.