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But it would be wrong to suggest that people shouldn't place an upper bound on their spending because the average case is lower. The loss of a computer might n

by seabee 15y ago

But it would be wrong to suggest that people shouldn't place an upper bound on their spending because the average case is lower. The loss of a computer might not be financially disastrous. The loss of another gadget might not be, either. But if you get a bad roll and lose multiple things within a short period of time, do you think you can withstand it financially? That is the real question. Don't look at these things in isolation.

dreeves 15y ago
So buy extended warranties on all your electronics in case everything breaks at once and you couldn't afford to replace them all? That's too far-fetched for me. I'd assume that you could scrape together enough money (especially with all the money you saved not buying extended warranties!) to replace the most critical things first and the rest later.
- seabee 15y ago
  You're missing the point and attacking a strawman to boot. Nobody suggested you take out a warranty on things you can probably live without, like a toaster, iPod or TiVo. Other things like a washing machine, you might do, because losing access to it incurs extra costs: taking things to the laundrette, travel to friends, etc. (if you're in a rural area I hope you know people there). This is especially the case if it's work-related equipment. In the case of something that is too expensive to replace without insurance, you just decided that the cost of insurance is greater than the opportunity cost of using a cheaper/inferior good over the time period covered by the insurance. Do you really think that's true in all circumstances? What you should not do is look at insurance narrow-mindedly and declare it a great big scam because the mathematics works in their favour. Well, no shit. They are paid to remove risk, they can't do that if it's an unsustainable business. If you can operate on the same business model as them and make an amortised net profit, do that - but don't assume everyone else can.

by seabee 15y ago

dreeves 15y ago

So buy extended warranties on all your electronics in case everything breaks at once and you couldn't afford to replace them all? That's too far-fetched for me. I'd assume that you could scrape together enough money (especially with all the money you saved not buying extended warranties!) to replace the most critical things first and the rest later.

seabee 15y ago
You're missing the point and attacking a strawman to boot. Nobody suggested you take out a warranty on things you can probably live without, like a toaster, iPod or TiVo. Other things like a washing machine, you might do, because losing access to it incurs extra costs: taking things to the laundrette, travel to friends, etc. (if you're in a rural area I hope you know people there). This is especially the case if it's work-related equipment. In the case of something that is too expensive to replace without insurance, you just decided that the cost of insurance is greater than the opportunity cost of using a cheaper/inferior good over the time period covered by the insurance. Do you really think that's true in all circumstances? What you should not do is look at insurance narrow-mindedly and declare it a great big scam because the mathematics works in their favour. Well, no shit. They are paid to remove risk, they can't do that if it's an unsustainable business. If you can operate on the same business model as them and make an amortised net profit, do that - but don't assume everyone else can.