AppleCare is insurance. There's a bit of a wrinkle in that it's insurance from a company who can do the repairs as well, but at the end of the day, it's insurance.

At work, we looked across the body of devices we had and tracked the AppleCare incidents (times when insurance "paid off") and concluded that it wasn't worth buying across the fleet. (This is aligned with the general principle of "don't insure against losses you can afford".)

If you can't reasonably afford the loss, insurance can make sense and you should consider AppleCare. If you can (or if you can self-insure across a large install base), you probably shouldn't.

Or if you know that you (or someone like your kid) is more likely to treat your gear more roughly than average. But, yes, in general extended warranties aren't a great deal.

Or if you know that you will probably have issues with your computer sooner than later even though you're not rough with it.

I did initially not buy it with my current laptop. Something broke during the standard warranty. Got the motherboard replaced... With a faulty one. So they replaced it again.

Got a feeling that buying extended warranty would be a good idea. And indeed, 3 months past the standard warranty end, it refused to boot at all. And once again, got replaced with a (less) faulty motherboard (some faulty USB ports).

I'd have preferred not being given broken motherboards by the warranty service, but since I have no ultimate proofs, had I not bought it, I would most likely have been refused service.

Well, repairs are usually warrantied themselves.

There's probably a better case to be made for laptops and phones you use outside the house than there is with other things. Sure, a TV can die young. However, as the parent said, if you can afford to self-insure you'll probably come out ahead on average.

> Well, repairs are usually warrantied themselves.

I don't know if this holds when the issue occurs more than one year after the repair, and has, at first sight, has nothing to do with it (Won't get into the details as it's not that interesting. The most important part being that the company's logs did not acknowledge a potentially-related issue reported while the servicing technician was still there).

> if you can afford to self-insure you'll probably come out ahead on average.

Yes. But if two parts of my TV broke in its first year and it needed to be serviced a second time just after because the replacement parts sent the first time randomly shut down with the company refusing to acknowledge it because "Yeah, the first technician said this, but the second time a technician came, it was not having issues" or missing logs, my guess is that buying the extended warranty at that point would probably cost less on average for that TV as I would not put any trust in it surviving long without needing another repair.

> If you can't reasonably afford the loss, insurance can make sense and you should consider AppleCare. If you can (or if you can self-insure across a large install base), you probably shouldn't.

You should also check to make sure you aren't already covered by an existing policy. My home insurance covers accidental damage with only a £100 excess, so AppleCare isn't so useful for me (although I've yet to test it!).

note that this often counts as a claim against your home insurance as well, which can result in higher rates. Generally speaking equipment riders are generally not worth it except for during a larger event (home burns down, etc) because of this - they get you on premiums if you don't make a claim (generally it ends up zeroing out after a couple years) and they get you on premium increases if you do make a claim.

It's insurance, on average the underwriter is still coming out ahead, that's the premise of the industry.

Insurance companies only need to (and only do) come out ahead in aggregate, not on any specific individual.

Generally the point of underwriting is to look at the specific individual and write a policy that accounts for their own particulars. Otherwise nobody would take any policy in any case where they would come out behind, so the insurance pool would be 100% 'adverse selection'. Insurance companies need to come out ahead on every policy, on average, that's how they're written.

A practical example of this, my insurance company told me to cut down a tree they thought was too close to my house for example (and I agree, it was a pine which tend to blow down, and it was too close), or else it would have affected my rates, and if you have particular high-risk breeds of dogs (dog attacks are covered by insurance) you will pay more as well.

In this case - if you keep making claims against your homeowner's for accidental damage to contents, even via a separate high-value-property rider, that is going to be accounted for the next time your renewals come around. And the next underwriter will be able to see those claims as well, those claims data are shared.

I had a high-value-property policy on a laptop (through USAA) and made a claim, they actually tried to come through to my parent's homeowners' insurance as well (which my parents didn't like and they backed them down lol). USAA is great in general, great about paying up when the bill comes due but, insurance is insurance.

So if you want to be nitpicky - no, they do come out ahead on any specific policy, on average - that is the point of diligence in underwriting, to account for those individual-specific factors. Even if you are "riskier than average", they will eventually account for that too. What is true that once written, they either win or they don't - and some policies they will lose. But the expected net value is biased to the house, on every single policy, given the best information they have.

In economic terms: perhaps there is some alpha that you as an individual can extract with your precise knowledge vs an unaware underwriter - but over time as you exploit that, the alpha will decrease to zero, because it will show up in your claim data. Just like any other market, alpha decreases to zero.

The house always wins in insurance, on average. You're not special, you aren't going to beat the house in the long term. Insurance is a "smoothing" tool, it lets you break a $5k lump expense out into $50/mo payments, it's not free money.

> Insurance is a "smoothing" tool, it lets you break a $5k lump expense out into $50/mo payments, it's not free money.

This is called a loan. Insurance "smooths" across the population, because not everybody breaks their laptop.

Of course you pay more after renewal when you make a claim (because you've shown yourself to be at risk for breaking laptops), but if you are able to make an insurance claim for something you generally do better in the long run making that claim than not - that's the entire point of insurance, nobody would get it if it was a net negative when you had to use it.

> but if you are able to make an insurance claim for something you generally do better in the long run making that claim than not

nobody has ever disputed that, but if you read my comment again, you'll see that I was discussing expected value of writing/taking a policy.

> that's the entire point of insurance, nobody would get it if it was a net negative when you had to use it.

in fact, on the topic I was discussing - everyone takes insurance policies even when they expect it to have negative net expected value - which all homeowners insurance policies are underwritten to have. Yes, if you make a claim you come out ahead, but on average you are expected to come out behind.

The fact that you also remembered some other thing that also works by the same method, is not particularly interesting or insightful. See:

> This is called a loan

Yes, indeed, loans also have neutral or negative expected return, so do lotteries, and that doesn't mean that insurance doesn't too. A is a member of S doesn't mean that the cardinality of S is 1.

You're trying to be cute and contrarian, in the finest HN spirit (it's also not cute or funny when anyone else does it, fyi) but you're going off on irrelevant tangents. Please, you're not furthering the discourse here, you're just being tangential and contrarian.

Please re-read the rules, it is very explicit that you need to take the most generous interpretation of a comment, and the reason that rule exists is because it's tiresome dealing with this contrarian nitpicking mindset. It's pretty clear that this statement does not imply in any way that you shouldn't make a claim if you have an event, only that taking a rider generally has a net-negative expected value - as does all insurance. Your entire comment chain here is the least-generous interpretation and should not have been posted.

> Generally speaking equipment riders are generally not worth it except for during a larger event (home burns down, etc) because of this - they get you on premiums if you don't make a claim (generally it ends up zeroing out after a couple years) and they get you on premium increases if you do make a claim.

> nobody has ever disputed that, but if you read my comment again, you'll see that I was discussing expected value of writing/taking a policy.

Your original post strongly implies that making a claim against the policy is net negative: "they get you on premium increases if you do make a claim". I am disputing that implication.

> Yes, indeed, loans also have neutral or negative expected return, so do lotteries, and that doesn't mean that insurance doesn't too. A is a member of S doesn't mean that the cardinality of S is 1.

The point is that you said that insurance "lets you break a $5k lump expense out into $50/mo payments", this is not true. That is what a loan does. There is a meaningful difference. Insurance allows you to pay to guard against risk by spreading payments out over multiple people, not spread out a large payment over a period of time.

> You're trying to be cute and contrarian, in the finest HN spirit (it's also not cute or funny when anyone else does it, fyi) but you're going off on irrelevant tangents. Please, you're not furthering the discourse here, you're just being tangential and contrarian.

Please read the HN guidelines before commenting, in particular this section:

> When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."

You can find a link to the guidelines at the bottom of the page, or here's a direct link: https://news.ycombinator.com/newsguidelines.html

Again, the comment I made:

> Generally speaking equipment riders are generally not worth it except for during a larger event (home burns down, etc) because of this - they get you on premiums if you don't make a claim (generally it ends up zeroing out after a couple years) and they get you on premium increases if you do make a claim.

This in no way implies that you should not make a claim if you have a covered event. It simply says that the expected value of any given policy or clause within a policy is net-negative - because that's how insurance operates.

You took that comment and cleaved off the bits you didn't like, until you had a sufficiently narrow statement that you could come up with some contrarian bullshit to look pithy on HN.

Again, have you finally accepted that just because loans also operate in this way, that it doesn't mean insurance can't too?

> Please read the HN guidelines before commenting, in particular this section:

Haha, this from the person who didn't even read the "please follow the most generous interpretation" clause?

Your entire comment chain has sprung from a least-generous interpretation of the rules, which is explicitly against the HN rules. Don't cite rules to me while you're breaking them yourself. And again, you should read the rules about not being snarky or making shallow dismissals.

You wanted to make a cute contrarian comeback post and you made a very in-generous reading of the comment in order to do it, and then if I point that out I'm the bad guy. Again, a very HN phenomenon - too much coddling here. You broke the rules trying to look cool on a social-media site and when called out you tried to rules-lawyer to make yourself look like the good guy.

Take it up with @dang if you want, I don't really care. But I'm not going to be scolded by the wrongdoer for pointing out that someone is cleaving apart substantive comments to make little gotchas. It's a real problem on this site, as is the hiding behind rules-lawyering when people call it out.

Your reply is a low-value comment that doesn't belong on this site and it's gone downhill from there on both sides. This is why we have a rule about that, your comments set the downhill direction here.

I do think your original text was clear enough that I was able to figure out what you meant, but it would have been a lot clearer if it explicitly mentioned spreading a lump-sum expense across multiple people rather than only mentioning spreading a lump-sum expense over a multiple time periods.

By only mentioning the time-series of payments, it took me more than a single read to understand and I could easily see someone genuinely misunderstanding your point.

I actually don't know what you mean by that, but, the "insurance industry comes out ahead on average" is true both of individual policies and on average, which is why his response is kinda irrelevant. If you're a high-claim buyer that will get passed along to you in your premiums (which is what I specifically said in the first paragraph). They don't just write "here's the average policy, we'll do this for all situations" because then they would be hit by adverse selection. All homeowners/etc are underwritten against a specific property and person.

Of course any particular policy may end up being a win or a loss for the insurer - but - the policy is written so the insurer wins on average, and that's also true of any particular rider or supplemental coverage. The expected value of all particular policies and all particular supplementals/riders is, from the insurer's data, negative for the buyer, otherwise they won't write it.

I did not address it in that comment in particular, but in the specific case of when you already have an accidental damage rider or it's generally included in your policy, whether you should take it... the answer is probably yes, but, you should also expect it to impact your rates down the road, especially if you do it more than once. You'll have to weigh that, and sometimes it's not worth it unless it's part of a larger claim. Yeah, sometimes you do win on a particular insurance policy but... the insurer can still win on the backside too, with higher premiums in the long term. And even if you pick up and move insurers, the next insurer will see that claim too and it will affect the quotes you get. Again, not a money fountain, it's just risk smoothing.

What I was more going for was, in general the net expected value is negative so you shouldn't take the rider, because it will come back in your rates if you actually need to use it. The rider premium isn't the total cost here, there's additional long-term costs if you end up being a claims pest. Homeowners is not designed for every time you drop your laptop, and if you use it in that way you'll end up with substantially higher premiums in the long term to account for it.

I’m specifically responding to your explanation of insurance here, to which another poster said “that’s a loan” [and you objected]

> Insurance is a "smoothing" tool, it lets you break a $5k lump expense out into $50/mo payments, it's not free money.

If you believe insurance is only spreading payments for losses over time, you don’t have a grasp of how it works. If you believe insurance is spreading payments for losses over multiple policyholders, you know how it works but didn’t express yourself very clearly and then objected when someone read your words and got misdirected by them.

> the "insurance industry comes out ahead on average" is true both of individual policies and on average

What would the former mean as distinct from the latter?

That wrinkle is important though - since their repair services could be more marked up when purchased directly Thant the insurance is. Looks like that isn’t the case for Apple at least for your fleet but there is no reason in general that a membership / HMO style insurance service will be more expensive than paying out of pocket.

If you have a fleet of devices you are probably big enough to insure the fleet via a traditional insurance company.

That insurance company is also going to [intend to] make a profit on that policy. Self-insuring lets you keep that profit (in exchange for fading the variance yourself).

(You also get the additional benefit of not having to deal with an insurance company over a claim. :) )

Jacking up repair prices to force you into a subscription sounds like an extortion racket to me :/

> Free market charges what it must

Apple charges what they can because the market isn't free.

How is the market not free? Apple is not even close to a monopoly in the laptop space

If my screen breaks, and I need a new screen, apple is the ONLY one who can provide the part.

Not true, you can get new panels from third parties.

I googled (briefly), but couldn't find anything on an m1 MacBook air, for example. How do prices compare to Apple?

Search “M1 MacBook Air LCD” on Amazon, eBay, or aliexpress and there are dozens of options around $250

But not the only laptop vendor to choose from.

There’s a free market to sell laptops in. What terms are attached are up to the consumer to consider.

Many people are happy with Apples terms. That some technologists are not is not evidence of a conspiracy.

Contemporary problem solving does not have to contort itself to the philosophy and nostalgia of some computer nerds. Same as we don’t have to kowtow to a Bible; it’s not about the what but who; present/future meat bags don’t owe past meat bags. No one asked to be born.

,> There’s a free market to sell laptops in.

But there is not a free market for Apple laptop repairs.

That is the unfree market. So yes, that specific market is not free.

Apple and customer are free to set the terms of their relationship without your input.

Freedom from, freedom to; law is semantic games not physics. You have the rights agreed upon by the rule makers.

Currently the free market you envision is not the status quo.

The only mechanism allowed in our social system to change that is vote em out or build a company that works how you want. Posting here is equivalent to echo “impotent rage” /dev/null imo

> Apple and customer are free to set the terms of their relationship without your input.

Thats not true. We can make laws that force Apple to support the right to repair, and force them to open that market up to the free market.

Which is what is happening here. It is because of legislative pressure that Apple is now engaging in some actions, to allow users to have access to the free market of device repairing.

As in, we are literally commenting, on a thread, about how Apple is now being moved in this direction.

> The only mechanism allowed in our social system

No, we can force Apple to allow the free market into their device, with laws, and take away they money via fines, if they refuse.

Which is what is happening.

> Currently the free market you envision is not the status quo.

Actually, with many of the upcoming laws, the status quo is about to change, so that Apple is forced to allow the free market into many of their markets. The one that is most obvious is the App Store Market, which they are being forced, under legal threat, to open up on.

But, also, the other market is the right to repair market. I can't remember the exact laws that are going to force Apple to support more repair options, but I am pretty sure that they exist and are coming into effect soon.

Tim Apple built his computer so that if I bump it off my waist-height table, it will shatter into a million pieces and I'll be out >$500. Conveniently, Tim Apple also sells a peace-of-mind insurance policy that replaces your Mac no-questions-asked. Does this create a conflict of interests that encourages them to design fragile display assemblies, unfixable Logic Boards and un-upgradeable storage? You decide!

After butterfly keyboards and graphics card recalls, I think Apple has learned some lessons about selling crap.

I buy Apple products, I like them, but I'm not going to buy AppleCare.

I expect Apple (or the resellers since there is no Apple Store in Slovakia) to deal with anything that is supposed to be covered by warranty. Both of our countries have strong consumer-protection laws.

AppleCare is basically insurance, and I would much rather take a 10% chance of having to pay $900 than a 100% chance of having to pay $100. Insurance makes sense for stuff you can't afford to replace, such as a house, not for consumer electronics.

That is, unless Apple sells AppleCare at a loss, but I somehow doubt that.

Unfortunately AC+ is not available in many regions. :(

So $200 x 3, + $100? It's 20 dollars more to get Apple's insurance than to just get it replaced!

Brutal!

I’m pretty sure it $200 for the entire 3 year period..