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> 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 inst

> 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!).

paulmd 4y ago
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.
- cmeacham98 4y ago
  Insurance companies only need to (and only do) come out ahead in aggregate, not on any specific individual.
  - paulmd 4y ago
    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.
    - cmeacham98 4y ago
      > 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.
      - paulmd 4y ago
        > 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.

paulmd 4y ago

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.

cmeacham98 4y ago
Insurance companies only need to (and only do) come out ahead in aggregate, not on any specific individual.
- paulmd 4y ago
  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.
  - cmeacham98 4y ago
    > 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.
    - paulmd 4y ago
      > 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.