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The post didn’t cover an essential part where insurance makes sense: I.e. when you believe you know the odds of the adverse event happening is much higher than

The post didn’t cover an essential part where insurance makes sense: I.e. when you believe you know the odds of the adverse event happening is much higher than what the actuaries estimate (either because the actuaries are wrong or don’t care or have a bigger model than that particular insurance, or because you know something about yourself that they don’t). For example phone insurance, a friend always buys it because she knows she’s butterfingers and she has also used them. Another is stuff like applecare. I don’t buy it for most products but I did buy it for my AirPods Pro, because I believed apple would have made it not that well. Further, apples warranty policy in india is weird where they’re more liberal in replacements as long as you have a care plan. So I took the care plan and am happy about it. Another place is where you really just don’t care about the marginal extra cost for the peace of mind you get, which I believe is what most people consider when taking the majority of the insurance especially stuff like rental cars.

Tabular-Iceberg 5y ago
> you know something about yourself that they don’t Don’t most insurance T&Cs require you to disclose known risks like having “butter fingers”? I was going to say I was playing the devil’s advocate, but really I’m not, since I’m personally on the hook for other people’s undisclosed risk through my own insurance.
- tshaddox 5y ago
  Surely not? I’ve never heard of anything like that for consumer insurance plans like AppleCare.
  - contriban 5y ago
    I’m no expert but AppleCare seems priced highly enough that they cover butterfingers too. I’d expect regular insurances to charge much less for a similar service (except definitely not as convenient)
    - Hamuko 5y ago
      How many regular insurances offer just phone insurance?
      - contriban 5y ago
        I don’t know. My bank offers smartphone accidental damage, theft, liquid damage insurance at about €100/year. AppleCare+ costs the same per year but requires an additional €230 for the base AppleCare coverage. If I wanted one I’m sure I could find for less too. Smartphone insurance is not something new or rare.
    - solarkraft 5y ago
      Yes. IIRC AppleCare+ for my Macbook for 3 years costs about 1/3 of the original price.
      - Scoundreller 5y ago
        I’ve parted out my last 2 MacBook Airs for ~2/3rds of their retail value, after 4 years of use. From that, all I can say is don’t break your LCD or logic board. Coffee on your keyboard or touchpad aren’t so bad.
- Hamuko 5y ago
  Will your AppleCare rate change if you answer the question "Would you like to buy AppleCare+ with your new iPhone?" with "Yeah, I'm very clumsy"?
- growt 5y ago
  You might have to disclose: I broke X phones in the last 12 months, but most likely the insurance already knows really well how often a phone screen breaks and you're not that special. I think those kinds of insurance calculate with "when" instead of "if". So if I pay $10 a month for phone-screen insurance, it costs $100 to replace it (after X months) and the screen breaks on average after 20 months, the insurance has a nice profit.
tshaddox 5y ago
> Another place is where you really just don’t care about the marginal extra cost for the peace of mind you get Of course, there’s no peace of mind unless you think the insurance is likely to be a better deal for you than just saving the premiums yourself, right?
- rocqua 5y ago
  Not at all. Peace of mind is about no longer fearing. If my phone were insured, I would dare walk around with it outside of a case. That would give me peace of mind. Insurance makes people less worried. Both because of financial risk, aswell as some insurance companies also handling the fallout. Besides that, insurance is paying for risk reduction. Lower risk, in and off itself, gives peace of mind. Not everyone has the same risk tolerance.
  - Leparamour 5y ago
    If only that was true all the time. Especially with car insurance a lot of people expect the insurance company to try to weasel out of damage payment.
- danielfoster 5y ago
  This was an important consideration in deciding to purchase pet insurance for my British Shorthair. As far as insurance goes it probably falls under the category of "not necessary." I added up the cost of the premiums over my cat's lifetime and realized I would probably break even at best. But in this one instance the peace of mind is worth it. For everything else I almost never purchase insurance because I know I will get out ahead. I especially am always surprised that people buy the $20 travel insurance airlines sell at checkout. But for someone who flies once or twice a year, maybe the peace of mind is worth it. People often purchases based on emotion and insurance is no different.
vasco 5y ago
I rent cars frequently and never take their predatory extra insurance. It can frequently add 50% to the cost of the rental, and in about 50 rentals I've only had to pay damage out of pocket 3 times (all three because of parking bumps while the car was parked over night and the other person just left without leaving a note or anything). The out of pocket costs easily come below the total amount of insurance fees I'd have paid. Plus you always have a maximum you'd have to pay out of pocket that is not even close to the total cost of the vehicle, usually under €1.5k, and with minor bumps from parking or something like that it won't ever get even close to the max, sometimes it's even under what the insurance would've cost in the first place. I think it makes no sense and the "piece of mind" is overrated, even if you drive in to return a car with minor damage they'll just charge your card, it's not like you have any extra work or worries to deal with.
- JumpCrisscross 5y ago
  > out of pocket costs easily come below the total amount of insurance fees I'd have paid Most major credit cards come with a good amount of rental car insurance.
  - faster 5y ago
    2 of the 4 credit cards in my wallet have greatly restricted the coverage they provide for rental cars in the last 2 years. Check your cards to be sure you're still covered.
  - boring_twenties 5y ago
    Almost all credit cards I've seen only provide secondary insurance, which means that if you already have normal car insurance, the credit card insurance only kicks in after that is exhausted. One of the few cards that provides primary rental car insurance is the Chase United Explorer card. If you rent cars regularly it can be worth the annual fee for that feature alone. (Assuming you have car insurance to begin with -- if you don't, then there is no difference between primary and secondary coverage)
- DominikPeters 5y ago

Tabular-Iceberg 5y ago

> you know something about yourself that they don’t Don’t most insurance T&Cs require you to disclose known risks like having “butter fingers”? I was going to say I was playing the devil’s advocate, but really I’m not, since I’m personally on the hook for other people’s undisclosed risk through my own insurance.

tshaddox 5y ago
Surely not? I’ve never heard of anything like that for consumer insurance plans like AppleCare.
- contriban 5y ago
  I’m no expert but AppleCare seems priced highly enough that they cover butterfingers too. I’d expect regular insurances to charge much less for a similar service (except definitely not as convenient)
  - Hamuko 5y ago
    How many regular insurances offer just phone insurance?
    - contriban 5y ago
      I don’t know. My bank offers smartphone accidental damage, theft, liquid damage insurance at about €100/year. AppleCare+ costs the same per year but requires an additional €230 for the base AppleCare coverage. If I wanted one I’m sure I could find for less too. Smartphone insurance is not something new or rare.
  - solarkraft 5y ago
    Yes. IIRC AppleCare+ for my Macbook for 3 years costs about 1/3 of the original price.
    - Scoundreller 5y ago
      I’ve parted out my last 2 MacBook Airs for ~2/3rds of their retail value, after 4 years of use. From that, all I can say is don’t break your LCD or logic board. Coffee on your keyboard or touchpad aren’t so bad.
Hamuko 5y ago
Will your AppleCare rate change if you answer the question "Would you like to buy AppleCare+ with your new iPhone?" with "Yeah, I'm very clumsy"?
growt 5y ago
You might have to disclose: I broke X phones in the last 12 months, but most likely the insurance already knows really well how often a phone screen breaks and you're not that special. I think those kinds of insurance calculate with "when" instead of "if". So if I pay $10 a month for phone-screen insurance, it costs $100 to replace it (after X months) and the screen breaks on average after 20 months, the insurance has a nice profit.

tshaddox 5y ago

> Another place is where you really just don’t care about the marginal extra cost for the peace of mind you get Of course, there’s no peace of mind unless you think the insurance is likely to be a better deal for you than just saving the premiums yourself, right?

rocqua 5y ago
Not at all. Peace of mind is about no longer fearing. If my phone were insured, I would dare walk around with it outside of a case. That would give me peace of mind. Insurance makes people less worried. Both because of financial risk, aswell as some insurance companies also handling the fallout. Besides that, insurance is paying for risk reduction. Lower risk, in and off itself, gives peace of mind. Not everyone has the same risk tolerance.
- Leparamour 5y ago
  If only that was true all the time. Especially with car insurance a lot of people expect the insurance company to try to weasel out of damage payment.
danielfoster 5y ago
This was an important consideration in deciding to purchase pet insurance for my British Shorthair. As far as insurance goes it probably falls under the category of "not necessary." I added up the cost of the premiums over my cat's lifetime and realized I would probably break even at best. But in this one instance the peace of mind is worth it. For everything else I almost never purchase insurance because I know I will get out ahead. I especially am always surprised that people buy the $20 travel insurance airlines sell at checkout. But for someone who flies once or twice a year, maybe the peace of mind is worth it. People often purchases based on emotion and insurance is no different.

vasco 5y ago

I rent cars frequently and never take their predatory extra insurance. It can frequently add 50% to the cost of the rental, and in about 50 rentals I've only had to pay damage out of pocket 3 times (all three because of parking bumps while the car was parked over night and the other person just left without leaving a note or anything). The out of pocket costs easily come below the total amount of insurance fees I'd have paid. Plus you always have a maximum you'd have to pay out of pocket that is not even close to the total cost of the vehicle, usually under €1.5k, and with minor bumps from parking or something like that it won't ever get even close to the max, sometimes it's even under what the insurance would've cost in the first place. I think it makes no sense and the "piece of mind" is overrated, even if you drive in to return a car with minor damage they'll just charge your card, it's not like you have any extra work or worries to deal with.

JumpCrisscross 5y ago
> out of pocket costs easily come below the total amount of insurance fees I'd have paid Most major credit cards come with a good amount of rental car insurance.
- faster 5y ago
  2 of the 4 credit cards in my wallet have greatly restricted the coverage they provide for rental cars in the last 2 years. Check your cards to be sure you're still covered.
- boring_twenties 5y ago
  Almost all credit cards I've seen only provide secondary insurance, which means that if you already have normal car insurance, the credit card insurance only kicks in after that is exhausted. One of the few cards that provides primary rental car insurance is the Chase United Explorer card. If you rent cars regularly it can be worth the annual fee for that feature alone. (Assuming you have car insurance to begin with -- if you don't, then there is no difference between primary and secondary coverage)
DominikPeters 5y ago