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Owners Smash iPhones To Get Upgrades, Says Insurance Company
markass530 writes "An iPhone insurance carrier says that four in six claims are suspicious, and is worse when a new model appears on the market. 'Supercover Insurance is alleging that many iPhone owners are deliberately smashing their devices and filing false claims in order to upgrade to the latest model. The gadget insurance company told Sky News Sunday that it saw a 50-percent rise in claims during the month Apple launched the latest version, the iPhone 3GS.'"
than any other cell phone? i know more than a few people who have done this with more than a few different brands of phone.
FOXTROT UNIFORM CHARLIE KILO
That's why we buy support contracts. If the phone breaks *for whatever reason*, it will get replaced.
These users are getting what they were promised. That's all.
When a company offers insurance on a product where they will replace it for any reason, why do they expect anything else?
-SaNo
The gadget insurance company told Sky News Sunday that it saw a 50-percent rise in claims during the month Apple launched the latest version, the iPhone 3GS.
Next week, the insurance company will tell Sky News they saw a new 50-percent rise in the claims after they published the article...
I'd imagine that when the compensation is an upgrade to the latest phone model, just about every claim "looks" suspicious.
Whale
how about linking to the original article instead of a blog entry attempting to get page views by copying chunks of the article?
Seriously...duh? this is news to someone? Although in the US I've never seen cell phone replacement insurance that would do ANYTHING other than give you a refurbished ones of the exact same model. I've never heard of anyone being "upgraded".
I upgraded to the new 3GS. A few weeks later I was out rock climbing. While being lowered down, my wallet and phone decided to simultaneously vacate their respective pockets. The wallet was fine, but the phone's screen took a beating. Thankfully the cost I had to pay with my AMEX was equal to the cost of the repair, and AMEX covered it. Of course, I've gotten fed up enough with how Apple deals with the unlocking / tethering / app store details that when I'm done with this term, I'm going somewhere else.
There, now /. has another comment everyone can read and think, "Who cares?"
SIG: HUP
never bought anything from there but years ago when accidental damage insurance first came out the sales people would tell me how awesome it was because you could throw the laptop out of the window and you would get the latest new one
Comment removed based on user account deletion
And people wonder why I condemn cell phones and other gadgets...what a waste.
I remember when the Moto Razr came out, no insurance was available for it. I had assumed the same was true of the iPhone. Interesting times.
"Very badly damaged iPhones draw attention because they turn up in a state that even being driven over by a car or dropped from a tall building will fail to achieve."
Doesn't anyone know how to use static electricity to destroy electronics anymore? 500,000 volts from a Van DeGraff will punch holes in just about any insulator.
All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
Users smashing their phone to scam AT&T or smashing their phone because they are stuck using AT&T's "3G" service and finally snap after spending 20 minutes trying to get that informative webpage they need *right now* to load?
But let's get real. How much intentional smashing is really going on? I dropped my 3G iPhone last month when I fumbled it while taking it out of my pocket. It hit the pavement end up, smack on the upper right hand edge... which is a real sweet-spot when it comes to shattering the glass display.
I walked into an AppleStore 15 minutes later and upgraded to a 3GS with a new 2yr contract and bought a hardshell protector to prevent a similar fate befalling it.
No scam, pure accident.
Maybe if Apple could... I don't know, not use glass in their portable device displays...
If you want to know where real inefficiency, waste, and bloat comes from, this is it - the jackass factor.
I don't know what kind of crack I was on, but I suspect it was decaf.
I mean, seriously, $8.99/month + $100 deductible? That means, after one year, you've paid about $200 for that "free" replacement. Which is REFURBISHED, by the way!
What do they expect?
The insurance companies need to stop their bitching.
The Institute of Incomplete Research has determined that 9 of out 10
GNAA post in 3...2...
This is a good reason why the GUARANTEE should be good, one does not need a expensive INSURANCE.
Here in the European Union companies are obligated to give GUARANTEE not for at least two years, but also for as long as a device should normally work.
Apple still ignores this, thus one will sell an insurance on it... and who to blaim to get some money out of that insurance, to get an updated model.
It couldn't be frustration that they have a phone that hardly makes or receives calls is the reason. Two of my family members have iPhones, both live in populated areas, and neither of them ever answers when I call, but return calls hours later. On the other hand I have this ugly iPhone look alike that operates on the Verizon Wireless network, is horrible at all the things the iPhone is good at but is actually not connecting calls.
Most ignorance is vincible ignorance. We don't know because we don't want to know. --Aldous Huxley
Least it's not as bad as two in three.
s/'not connecting call'/'not bad at connecting'/
Most ignorance is vincible ignorance. We don't know because we don't want to know. --Aldous Huxley
there should be an 'insurance' claim to be filed somewhere? we're thinking the premiums (integrity, co-operation etc...) have not been paid.
there's absolutely nowhere left to hide.
consult with/trust in your creators, supplying more than enough of everything for everyone, using an unlimited cache of newclear power, without any personal gain motive, since/until forever. see you there?
the lights are coming up all over now
"Very badly damaged iPhones draw attention because they turn up in a state that even being driven over by a car or dropped from a tall building will fail to achieve.
The group says it rejects around a quarter of suspicious iPhone claims"
If the insurance covers any accidental damage to the phone they should not be able to deny any claim. Insurance is a scam. If I accidentaly hammer my iphone 32 times, it should be covered, thats what i paid for.
I hope the company gets sued for denying so many claims.
Just like car insurance, if you total a car you can't upgrade to a new one you can buy one that is worth what you just destroyed. Are they really replacing instead of paying current value?
Apple Upgrades
There is a more or less fundamental problem with insurance, that is ever pushing against your ever getting customer service(which is a pity; because insurance can theoretically serve a very useful function).
When you buy insurance(either with a lump sum payment at point of sale, or with monthly premiums), the insurer is already as well off as they will ever be, with respect to you. Up until that moment, you were a customer now you are just a cost center. Now, in the real world, regardless of legal obligations, appeals to ethics, or fancy economic analysis from the IT department claiming that they actually save the company money, cost centers have a way of getting the bare minimum, and that grudgingly.
In a theoretical highly competitive(and ideally liquid) insurance market(and, of course, assuming near-perfect information), competition would help keep this in check. If you didn't treat your cost centers well enough, you'd have fewer customers in the future. Unfortunately, gadget insurance isn't all that competitive or liquid(it is generally bundled by the seller at the point of sale, and the primary competitor is "no insurance at all" rather than a selection of other insurance options, and it is generally either a lump sum or part of a carrier contract, so you can't really switch providers).
The ability to pool risk is really nice. However, the "customer/cost center" problem largely ensures that the insurance experience will be shit. They already have your money, you just have a conditional-IOU, and every dollar they can weasel out of is a dollar they get to keep.
As far as I can tell this is standard operating procedure for insurance companies.
They'll happily take your money in exchange for 'insurance' for X. They get your money, you get peace of mind, it's all hearts and flowers.
It's just that if at some point you want them to follow through on their end of the deal... Well, then you're obviously a cheating, swindling bastard bilking them out of their money. Any excuse to deny a claim; if they can't manage that often enough they'll lobby for changes in laws to make it easier to do in the future.
The nerve of some people, expecting insurance companies to pay up when they make a claim.
Moral hazard is part of the insurance business- hire some people who are better at math so you can price your insurance product accordingly.
When people decided that having a fire brigade was a bad idea because it meant that a bunch of guys depended on there being regular fires..... Or maybe not... in fact, it is nothing like that.. carry on...
If I knew a company was going to be releasing a new version of something I'd damaged, I might wait a bit before making a claim, so I could get the newer version of the replacement rather than the older version. A lot of technology can be coerced into sort of working for a little while longer by wiggling connectors or overlooking a cracked and flickering screen.
Nostalgia's not what it used to be.
Well, of course they do, but the real question is, is it really worth it to buy insurance and smash the phone? or is more profitable, easier faster and less risky to just sell the phone and buy a new one?
P.S. I recommend the book Freakonomics which talks about economic incentives of corruption, crime, cheating, .... Maybe in the next book they'll write about cheating to insurance companies and I'll know the answer to my question :)
There will be a huge flood of suddenly accidentally destroyed iPhones... Rooting + Overclocking + custom ROMS > jailbreaking.
people have been doing this for years with best buy. get the extended warranty. drop it down a flight of stairs a month before it lapses, get a replacement. (refurb often, but not as worn anyway) They replace it almost regardless of treatment.
Tho this all falls under the name of "insurance fraud". There's no reason to be surprised that when a new model of anything comes out, that there won't be a short spat of insurance fraud by owners of the previous model. This article has nothing whatsoever to do specifically with the ipod, and is just using it for a buzzword to attract attention to something we all already know goes on.
I work for the Department of Redundancy Department.
Is that you, PGURRIERI?
(I can't believe I'm burning my ability to mod to post this)
I'll create an amusing sig when I have something meaningful to post.
...
It's a heck of a lot easier to jailbreak, unlock the baseband, and sell on eBay for more than what you'd purchase for your next phone than to try to rip off an insurance company who has decades of experience battling fraudulent cases. I sold my 3G 8GB for the same price as I bought my 3GS 32GB, and my 3GS 32GB for more than an unlocked Nexus One.
One in a million shot doc! One in a million shot!
I just smash iPhones for fun. Only a dead iPhone is a good iPhone. (Has more freedom too. ;)
*mans cannons and raises shields against fanboi shitstorm* ;)
Any sufficiently advanced intelligence is indistinguishable from stupidity.
"iPhones, like most mobile phones, are actually very difficult to damage.
I don't have an iPhone, but I know for a FACT that it's damned easy to ruin a phone accidentally. My (now ex) wife dropped our new Star Tek in the coffee when we were travelling; bye bye Star Tek. I got caught in a thunderstorm at a George Thorogood concert at the Illinois State Fair; bye bye LG. I slipped on the ice and fell with my phone in the pocket I fell on; bye bye Nokia. Dropped my Razr in the toilet while trying to answer it when I was pissing; despite immediatekly removing the battery and washing it and drying it out, it was ruined, never to work again.
My daughter (who turns 23 next month) has broken a lot more phones than I have, but that's because she keeps it in her purse. Women are notoriously hard on purses, which are a lot more forgiving of abuse than their contents are.
Anybody who says it's hard to break a phone is either stupid or lying.
Free Martian Whores!
These are Apple customers! Did you hear me? APPLE customers! Not some common Samsung owner on the street. They are Steve Job's chosen people!!! Don't you understand? How dare you insult them! It's a conspiracy! Anti-Appleism!!! We must strike a blow for freedom of religion! Quick, smite him!!!! I said SMITE the heathen now!!!! May you burn in IBM hell sir, and may all your phones be Nokias!!!!
These posts express my own personal views, not those of my employer
Cover replacement value.
Just buy them a used iPhone identical to the one they lost/broke. Hey that one was used, too. Or just reimburse them the used value. They can buy a used one on ebay and they will be right back where they started: with a used phone.
This is precisely what car insurance companies do, it's nothing new.
If you eliminate the possibility of someone making out on the deal then you will weed out the opportunists.
"but is actually not bad at connectings"? O.o
If I go to a store and hand over some money to buy a product, at that point I stopped being a customer and now a cost center until I am given the product I paid for (a few seconds later). How is this example different other than timing?
This has been going on since phone carriers began offering accidental damage insurance. Some people deliberately break their phone every year or two to get a free upgrade. And some people are genuinely rough or careless with their phones, and break them during normal use. Since they can't tell the difference, some carriers limit the frequency that you can claim on the insurance.
Sent from my iPhone
Lots of phones have caller id.
SupercoverInsurance IS the competition to the insurance pushed by the sales guy.
They claim 48 hour claim processing. Which is just the time it takes them to go "oh, you want to claim".
They ask you to send your phone back with a bank note sized piece of bubblewrap - like the postal service isn't going to damage the phone with that little packing.
Their policy does cover malicious damage though - so its not like they're not aware that people will deliberately damage stuff. (covers accidental, liquid, malicious damage)
Seriously?
If you go into a store, give them money for a product, and they start treating you poorly, you can demand your money back and walk out. You can't do that with an insurance company, specifically because of the timing.
After all, I am strangely colored.
This is all just a result of cell phone prices being outrageous to begin with. People wouldn't bother with insurance fraud to replace their phones if it wasn't going to cost them $500+ without renewing their plan. I mean without insurance all it takes is falling in the pool to set you back a few hundred dollars. With insurance you get taken for the same ride, just over time. And most companies won't let you have insurance without a contract agreement.
If we TRULY had competition on the market, a top-of-the-line cell phone would cost $300, and you could get capable but no frills cell phones for under $50. All of this without any kind of plan or contract, freely transferable between carriers that the phone supports.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
because the merchant only has 2 options: give you everything you paid for, or don't. pretty obvious when you are getting screwed. pretty hard to make you wait on hold for an hour when they are standing right next to you. pretty hard to just give you 90% of what you paid for without you getting pissed.
by the time something goes wrong with the product, they are already hiding in their cave... when you are at the store you can get 100% of your money back no matter what until you leave the store, and if not, kill someone.
"An iPhone insurance carrier says that four in six claims are suspicious..."
WTF? They couldn't just say two in three?
There is a more or less fundamental problem with insurance, that is ever pushing against your ever getting customer service(which is a pity; because insurance can theoretically serve a very useful function).
When you buy insurance(either with a lump sum payment at point of sale, or with monthly premiums), the insurer is already as well off as they will ever be, with respect to you. Up until that moment, you were a customer now you are just a cost center. Now, in the real world, regardless of legal obligations, appeals to ethics, or fancy economic analysis from the IT department claiming that they actually save the company money, cost centers have a way of getting the bare minimum, and that grudgingly.
Insurance companies figured out hundreds of years ago that they needed to make sure the insurer had a definite self-interest in the preservation of the asset being insured. If not, I could take out insurance on someone else's ship and sink it, pocketing the full payout. Likewise, I would have no incentive to preserve a ship if it were a leaky wreck when I bought it and my intention was all along to sink it for the insurance money. Things become murkier for the investigator when I did indeed buy the ship for a legitimate business and circumstances turned against me. I could then try to sink the ship for the insurance money if I'd make more on the payout than selling it.
I think gadget insurance is pretty crazy to begin with. Insuring cars, yes, especially gap insurance. Nothing sucks more than crashing a two year old car and realizing you have to finish off payments for it plus the replacement. Insuring your house makes sense. And few people are going to burn down a house with all the valuables inside just for the payout. But an interesting point for fraud investigators, if someone is claiming the house as a primary domicile and it burns down without valuables and irreplaceable personal possessions inside, that's a big warning sign for fraud.
The sad thing is that you may have to buy insurance on products these days simply because they're made so poorly. Among coworkers and friends, there are so many stories of netbooks and laptops crapping out, especially HP's. If a $400 device won't even last you a year, maybe you should buy the insurance. You're going to need it.
I'm wondering if maybe a better model might not be leasing the equipment instead. You subscribe to the iphone, send the old one back when the new model comes out. I wouldn't feel so bad about it if they could properly break these things down into constituent molecules and recycle. It just feels awful to chuck expensive electronics every other year. It feels like sin.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
"but if I'm paying you to insure my stuff I expect something resembling real customer service, thanks.
/., that's my favorite customer service! "Most iPhone owners with our insurance are LIARS!" Gee supercoverinsurance.com, let me get my iPhone insured through you so you can call me a liar too.
Or they can bitch about you to
Before I had an iPhone (which At&t does not offer insurance for), I had insurance on each smartphone I bought. It was ~$5 a month and a $50 deductible, and they only replaced it with new or refurbished model of the exact phone I broke, so if I broke a phone after a year that means I paid $60 + $50 deductible = $110 for a refurbished smartphone. They were coming out way ahead, so I don't understand all the crying by insurance companies
my karma will be here long after I'm gone
What's suspicious to me is why they would say "four out of six" and not "two out of three".
yes, but isn't this true of any cost center? Comcast seemed to be very excited about capturing me as a customer. They routed my calls to a native English speaker and provided courteous responses to my questions. As soon as I bought their service, I became a piece of shit that is there to annoy the fuck out of them. When I call support because my VoIP phone doesn't get a dial-tone, I get routed to India where someone who has never heard of Comcast tries (and often fails) to answer my questions.
In the bottom of the article, they say "four in ten", not "four in six," so whoever wrote the headline made the mistake. "Four in ten" sounds more plausible, since it's more akin to a percentage (ie. 40%). I'm guessing whoever wrote the headline spaced it and pulled the "six" from the "six blows from a hammer" anecdote.
Program Intellivision!
Yeah. It is by no means exclusive to insurance(though insurance is usually a pretty dramatic example; because getting the runaround when your internet isn't working is way less exciting than getting the runaround when your liver isn't working).
The phenomenon is at its worst, and most noticeable, in any situation where the customer is both a cost center and unable to leave the arrangement. If you are buying cell service month-to-month, you are a cost center for the 29 days after your payment; but if they treat you badly you can leave next month. If you are in a 2 year contract with a $300 ETF, your threshold for walking out is a fair bit higher, so their incentive to treat you well is a fair bit lower.
I don't think that insurance was ever considered a "valid" capitalistic approach to profit-making. Even in its earliest incarnations, insurance was mainly a scam, and the history of the insurance industry in America reads like the description of an on-going criminal enterprise.
There are good reasons for certain types of insurance. Auto liability or crop insurance for farmers for example. But we've seen "innovations" in the insurance industry such as "extended warranties" and "mortgage insurance" that are little more than white collar crime.
The notion that a store would sell a product and then ask you to pay an additional amount to "insure" that the product would work more than 90 days is emblematic of weak position buyers have been put in by our consumer-driven economy.
You are welcome on my lawn.
and I was told by AT&T that I COULD NOT get insurance on it. Flat None, Period. Where are these people getting these phones? Maybe it's just around here, but if you have insurance on your iPhone, it's a floater on your home owners insurance, and even then who knows if they'll do it.
Now I was pretty sure this is why they didn't offer it when I got mine, but it's just as well as I'd have not paid for it anyway.
On the flip side, my wife recently dropped her phone and besides learning that we'd been spending $5/mo on insurance for it (I remember when it was $1.49/mo and the phones didn't cost any more then either), plus the $50 deductible (she didn't have anything fancy), they were actually pretty quick and friendly. New phone was received in the mail THE NEXT DAY before 9am (well, refirb, but new to her). It was an upgraded model as they no longer carried her old one being like 7 months now, so, free upgrade. I'd have to say that $30 of that $50 went toward the shipping, and knowing how much she uses her phone, I'd have told them to just send it 3-5 day std ground UPS for $7 instead if they passed the savings on.
Then again, maybe they just didn't want to mess with a pregnant lady...
-=JML=-
I'll go a step further: The pooling of risk is the only valid reason for insurance. Extended service warranties are not "risk pools" but basically surcharges which we are expected to pay if we want our products to last more than two or three months.
You are welcome on my lawn.
Until AIG figured out it could make money coming and going by insuring other peoples assets - if they actually had to pay out the government would save them.
Gadget insurance is idiotic. The only people who carry it either (a) can't take care of their shit, or (b) intend to defraud the insurer. Because of this the premium/deductable schedule is such that you only win if you file a claim every three months - at which point the insurance company decides you're trying to defraud them and your denied coverage - and you lose any way.
Gap insurance only makes sense because a lot of people are idiots and will carry it even after they car is worth more than the loan. If you cancel it as soon as the blue book value matches yoru loan balance (usually ~12-18 months) you bought a useful service.
As for extended warranties - don't buy them. Not on cars, not on electronics, not on anything. Your laptop or your car is either going to break in the first six months and be covered, or isn't going to break until after the extended warranty is up. Even if it does break in the sweet spot, odds are what you paid for warranty coverage is about what it costs to fix your problem.
What's the difference between a subsidized product with a contract and a lease? Not much. The cell phone market is functionally a leasers market today, the only difference is that the asset has nearly completely depreciated (at least as far as resale is concerned) in the lease term.
I also do subscribe to the $5 insurance policy for my phone as well. However, my phone has an unsubsidized cost of $650 dollars and a subsidized cost of 300ish. (I actually paid no where near that amount, but it pays to know how to get things cheaply).
I only intended to keep the insurance for the first year. If a new model comes out I will dump this phone on the market for whatever I can get. However, during that time I would like to protect this very easily lost and destroyed object.
For me this is a reasonable investment because the phone will be quite aged before it has reached a point in which the insurance is no longer worth the purchase.
"You should always go to other people's funerals; otherwise, they won't come to yours." -- Yogi Berra
Cause this is considered very straight forward, has enough incidents to warrant a well established conclusion, and has been beaten to death and then some in decades of relevant case law.
When you talk about insurance, you are talking about a risk assessment that law barely understands, and although deals with well defined assets, has fudgy liability.
I new it was trouble using both lose and to yours in a sentence. Those should both be you're.
Next time I'll try to effect more affective grammar.
Solution: Non-profit insurance.
Risk is pooled, the insurer has only to balance the books rather than worry about cutting a check to the shareholders and executives. OR...
Have a non-profit insurer where customers buy shares. Each unit of insurance you buy is a share per month. At the end of the year we take that pool, subtract operating costs, and payouts. Then divide that remainder by the shares bought, cut a check for $amount * $sharesTheyOwn. If a year goes badly, the profit share goes down. If(when) costs go up, increase the price of a share.
Utilizing the synergization of benchmark e-solutions to pre-workaround action items!
Arguably, buying insurance because devices are uniformly shoddy is a terrible strategy.
Since the insurer needs to make at least enough money to eat and keep their lights on, the cost of insurance for a device is always going to be(at least slightly) higher than the average cost of device replacement across the insurer's customer base.
In situations where failure is quite rare; but quite expensive, paying the premium is generally sensible. If the devices are cheap; but fail often, it makes a lot less sense. Cost of insurance is always greater than average cost of failure across the insured population and, with highly unreliable devices, your personal risk of failure is increasingly close to that of the average risk.
For gadgets specifically, there is arguably one exception to the above rule: 1st party warranties. It is still the case that the company doesn't want to lose money, on average, by offering warranties, so the cost of warranty coverage will be slightly greater than the average cost of failure under warranty; but there are a couple of ancillary advantages that can make up for it. First, 1st party warranties are good if you simply must have large numbers of identical machines. For consumer purposes, getting model N+1 when model N breaks is a bonus. For corporate and institutional purposes, that would basically be useless, because of administration costs. So, having a first party warranty that assures repair or replacement of model N is valuable. Second, 1st party warranties help align the incentives of the buyer and the seller:
If Dell is selling me "a computer", their only incentive to make sure that it is long lasting is the possibility that I'll get pissed when it breaks and buy an HP instead next time. If Dell is selling me "A computer, guaranteed for 5 years", they have an incentive to chose better components(since providing warranty replacements also has Fedex, call center, inventory, and refurb costs, there is suddenly a financial incentive for them to spend the bit extra on capacitors that won't leak, or better engineering, or whatever.) Since device failure sucks for the customer as well, having a warranty helps align both parties interests.
3rd party warranty/insurance outfits, though, don't have any control over production quality, so they don't have this effect.
I've seen one good example of an extended warranty, offered to me by Bassett. They give you a 5 year warranty on furniture for a set price, and if you don't use the warranty, you get a store credit after 5 years for the warranty cost. Its a win-win for you if you want the protection and like their stuff, and a win-win for them because you're going to buy more stuff in the future.
Obviously this warranty doesn't work with other things like it does for expensive furniture, but I just wanted to point out that there is a way to have a good warranty where good customer service benefits the insurer. Just because electronics companies haven't figured one out doesn't mean it doesn't exist somewhere in someone's brain.
I find it hard to sympathize with the insurance company that used high-pressure sales tactics to get the contract, then over charges along the way, and then won't cancel or make the user jump through all sorts of hoops if they do, and then tries to weasel out of every legit claim. The fees per hundred paid on these insurance policies are astronomical in the first place. My fucking CAR insurance costs less than some of this shit does. So these companies go right in the same bucket as pay-day-loan places.
So I've been a customer for close to a decade.
My current phone is breaking and I have insurance so I go into the store.
"I'm sorry sir, you have 70 days to go on your two year contract. If you want, we can give you an insurance replacement phone- that will be $50 deductible"
So here I am, having been a customer since close to 2000, and instead of seeing this as a GOLDEN opportunity to lock me in for another 2 year contract, they are going to stiff me.
If I'm going to have to wait 70 days, I might as well go to another company. Which is what I'll be doing in (now) 53 days.
---
On a related note, I have been a DISH customer for a while now. HD, DVR, Lots of non premium channels. It got up to $72 a month. I said, "this is a bit high, I want to reduce it to $60" so they cut some obscure service and i was happy. Then next frakkin month, a $10 increase. Then next month a $3 increase. Here I am back at $73 with less service than I had two months ago.
So I have switched to DirectTV. Dish is canceled as of the next billing period.
Now I'm paying under $40. And I get some premium services free for three months.
But I'm just about ready to kill TV entirely.
At $100 a month, that's $12,000 per decade. You know-- A CAR. or five NICE vacations. or half of a really nice car. Cable is worth $40 a month. It's not worth $100 a month. Especially after I edit down the 500 channels to what I actually watch-- it's about 34 channels.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
It isn't fraud. It's risk pooling, just like all insurance.
if the ratio of unfavorable to favorable event is 1:9, you have a 10% chance of having to purchase the product again. If purchasing the product again is too financially burdensome, you buy insurance, whereby you pay $(10%+expenses+margin) over an X period of time. For many people, they would prefer to pay say 20% of the price of the item to protect themselves from a 10% chance of having to pay 100% the price of the item.
This isn't fraud... it's a SERVICE. If the store didn't ask people to buy the extended coverage, the price of the item would be much higher, reflecting the proportion of the store's margins that are comprised by the profit from the extended warranty.
The only time it's fraud, is when the store sells an extended warranty that is so limited by its terms as to be entirely useless.
Dear iPhone insurer: Your customers want to upgrade to the latest model each year, so just build a 'free' annual upgrade into your price. Instead of taking a hammer to their phones, your customers will send you their *working* phones (which you can resell) and you'll deal in bigger volume, perhaps enjoying some added economies of scale.
This is a really old scam since the beginning of subsidized cell phone plans. Ask any Radio Shack manager, or for that matter, any electronics retailer how many people think they can get a new phone after dipping it in water.
Kriston
Once upon a time I was very happy with my original iPhone. It worked great and had all the features that I needed. Even over Edge Data Network I received my Google map images just fine. My reception was great and I had wireless everywhere it really mattered to me. Then one fine day I went to make a call in my house and I had no bars! Hmm. Maybe my phone was broke? I called the phone company and they said all was well with their network. Then I went online and found out that AT&T had taken two of the four frequencies of GSM and allocated them to 3G! I couldn't believe it. Surely they wouldn't cut off the functionality of the phone after just a year since it was touted as the hottest @#$% in the world? Then a friend came over with a 3G and what do you know... full bars. Whoops I accidentally dropped my phone the same day. The 3G replacement I received has been a great upgrade ever since. I would still have the original if it wasn't for them. If they had waited till two years from the sell of the original iPhone I would have ponied up to buy a new phone but cutting off customers before their contracts have expired is just not right.
Require anyone asking for full replacement to file a police report. Someone who is willing to risk a felony for a free phone is an idiot.
Reminds of the episode of Jackass when Knoxville rented a car and DESTROYED the living hell out of it and then took it back.
I don't know how they define "suspicious." I had an original iPhone with a cracked screen. It wasn't pretty but still worked so I held on to it until the 3Gs came out. Then I got a new iPhone. I'm sure that would have looked suspicious to the insurance company but it actually would have saved them money.
...more smartphone companies that manage both their software AND hardware don't build the best device they can upfront, and focus on the OS and software upgrades until they have no choice but to roll out a new piece of hardware (as mandated by a carrier or just as a result of some absolutely necessary hardware improvement). Oh, wait...everyone other than Apple does that. Apple makes most of their money by selling as many phones as possible to as many people as possible, so staggering minor hardware updates in new versions of their phone every 6 months, even though carrier contracts typically run 2 years, is what they're all about. Makes it look like they're improving their phone while getting as many people as possible to pay as much as possible to get a new phone. Most people, of course, don't NEED a new phone, but if I'm an 18 year old dev and I want to do an app that utilizes some hardware improvement that opens up another api call that I need to do what I want to do, and I'm stuck with an older phone and no means of reliable income otherwise, I either am SOL or I have to figure out a way to get that phone somehow.
NOT 3GS! And FINGERS TOO BIG to work TOUCHSCREEN! HULK SMASH!!
(later, Bruce Banner fills out the claim form...)
Hmm.. "cause of accident." (Types Superhuman alter ego resulting from bombardment of gamma radiation and adrenal rush. Frustrated with user interface. Smashed phone in rage.. Considers it for a moment. Deletes and types in Fell out of moving vehicle.)
Prisencolinensinainciusol. Ol Rait!
Insuring cars, yes, especially gap insurance. Nothing sucks more than crashing a two year old car and realizing you have to finish off payments for it plus the replacement.
Gap insurance is a scam... typically you end up paying about $500 for $2000 of insurance coverage - that rapidly decreases over time. Not to mention it doesn't necessarily cover your deductible of $500-$1000 anyhow. Put the extra $500-$1000 towards the downpayment or find a decent auto insurance company whose auto insurance policy pays for the full price of the replacement cost. (Quite a few policies have a new car provision for the first two years).
Actually, you were right the first time. However, in your correction, it should have been "knew" not "new".
Call me an idiot, but as much as the insurance companies are big and bad, I feel it's just plain wrong to smash something on purpose because I want insurance to get me a new one (refurbished or not). Why is lying so acceptable in society?
Dell tried to sell me a 350$ extended warranty on a 450$ dollar laptop. I told the guy that the part that was bad in it (a toshiba hdd) was 75$ if I fixed it myself. The most expensive component in the machine is the motherboard and its a 120$ part. Why buy a plan for as much as the machine costs? I'll take the risk - $100 is a safe/cheap bet.
It wouldn't surprise me if iPhone insurance was 50-60% of the cost of the phone - and if it is - I wouldn't feel to bad about getting it replaced fraudulently - they made their money off me. (disclaimer: I don't have an iPhone)
Insurance is the same as gambling.
Over time, the average honest person loses.
otherwise there would be no 'insurance industry'
In addition, the dishonest make it an ever worse deal.
perverse really.
Refrain from owning things you cannot afford to replace.
Save on insurance. Chose replacements wisely.
About the only thing I like about this gadget insurance
is the degree to which mfg are held responsible for selling junk.
Lawyers often prove a better deal than increasing quality though.
I also do subscribe to the $5 insurance policy for my phone as well. However, my phone has an unsubsidized cost of $650 dollars and a subsidized cost of 300ish. (I actually paid no where near that amount, but it pays to know how to get things cheaply).
I only intended to keep the insurance for the first year. If a new model comes out I will dump this phone on the market for whatever I can get. However, during that time I would like to protect this very easily lost and destroyed object.
This. If I walk out of the T-Mobile store, drop my brand new phone in the parking lot and it gets run over, I'm immediately out the $600 unsubsidized replacement cost. I'm willing to pay $5 a month for that first year, after which I can get a refurb replacement from a variety of sources for $150 or less if I break it.
Don't touch that goatse just yet! 10-second rule has already expired. Leave the goatse on the ground, maybe it's mother will take it back up her ass.
Seems like a simple solution for the insurance companies is this: at the time of a new device launch, buy up a stash of the older model, probably at a good price. Then always replace claims with the same model that's insured. If the "rise in claims" effect goes away we know what really going on.
I never buy insurance for my iPhones because I know that I'm going to want to upgrade them each year. It never occured to me to smash and replace. I wouldn't want to do that though. On the other hand, sell me a policy where each year I get to send in my old iPhone and get a new one and I'd be all over that. The insurer could then sell my old iPhone or use it to replace someone with cheaper insurance who didn't buy the upgrade option.
If everyone thinks they can cheat the system, that just causes the cost of insuring these devices to continually rise in response. Nice work geniuses.
~ I am logged on, therefore I am.
Ha ha, and "to" should be "two". Replaced 0 mistakes with 3 (not including the last presumably intentional one! That might be the most ineffective correction post I've ever seen. Not trying to be pedantic, was just funny.
Now that I think about it, the two effect/affects are switched as well. Somehow with all the mistakes in the correction, I think I missed a joke, lol.
Insurance insures against a losses as specified in the policy.
Warranties and extended warranties only cover problems related to the manufacturing of the product.
When buying either insurance or an extended warranty you need to know three percentages. First the commission paid (which can be to the sales agent or to the store), second the administrative overhead for servicing claims, and finally how much of what you pay goes to actually covering actual losses.
At one end of the spectrum you have (for example) fixed term life which has a low commission, low overhead and thus a high amount of your premium gets used to fund losses (can be as high as 70-80%).
At the other end are things like flight insurance. Over half the premium is sucked up as sales commission and another large amount for administration. Very little of your premium gets used to pay any losses (can be as low as 20-30%).
The former is a great deal. The latter not so much.
Most extended warranties fall closer to the latter. Its just another way for the vendor to increase his margins.
You can find stores that do have good plans. My current iPhone has a $60 extended warranty that I actually paid three years earlier when I bought a different phone. There where no claims so they just refunded the original $60 and applied it to the new phone.
The other side of the extended warranty is that while you tend to think of the current cost of things when buying the item. The replacement cost may be far lower when you actually need it. This is especially true for electronics. That $500 phone may only cost $200 to replace two years from now. And normally they will only replace with equivalent models not the latest and greatest.
It just feels awful to chuck expensive electronics every other year. It feels like sin.
Thank you... I hoped that I was not the only one who felt sick watching the iPhone "blend" or seeing Bill Nye chuck an Apple IIe to demonstrate momentum (back when they were new, of course).
>> Standing on head makes smile of frown, but rest of face also upside down.
I asked the person in Circuit City pushing a laptop warranty if he would go in back and get me another if I jammed a 12 inch screwdriver through the side of the box. He said no so I handed him the box back and walked out of the store and bought the laptop at CompUSA. They asked too, but at least they took no for an answer.
People in those companies probably still wonder why they are both out of business :)
That's not strictly true, compelling though it is. From an actuarial viewpoint, assuming that you have correctly predicted and priced the risks on a policy population, the last thing you want is to start denying claims that are valid under the policy as written. You are running a whole dog-load of different risks when you start doing that, not least that of getting royally humped in court, which can be extremely expensive on many levels.
[FUCK BETA]
Among coworkers and friends, there are so many stories of netbooks and laptops crapping out, especially HP's. If a $400 device won't even last you a year, maybe you should buy the insurance. You're going to need it.
If it's HP's, don't buy it. If it's under warranty, you're going to be required to do the warranty shuffle before you can get an insurance replacement. The replacement is more or less guaranteed to be a not-really-repaired unit identical to the original, with the same problem, just like a warranty replacement AT&T Fuze with the keyboard cable that pulls out. It's not impossible to get a different unit from HP; it took me well over 24 hours on the phone (no, not all at one) to get a replacement for a laptop whose GPU had a known die bonding problem, and two visits by a tech who didn't bother to use the grounding strap in his toolkit, after the first of which my laptop didn't work at all as opposed to when I tried to do anything more than 2D with the GPU.
DO NOT BUY ANYTHING FROM HP. Don't buy it refurbished, don't buy it new, don't buy it with a warranty, don't buy it without a warranty, don't buy it from a fox, don't buy it in a box. Don't buy it over here, and don't buy it over there, just don't. You will regret it sooner or later.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Gadget insurance is idiotic. The only people who carry it either (a) can't take care of their shit, or (b) intend to defraud the insurer. Because of this the premium/deductable schedule is such that you only win if you file a claim every three months - at which point the insurance company decides you're trying to defraud them and your denied coverage - and you lose any way.
Years ago, when I bought my first iPod (a 10GB second-generation) the product purchase price was about 400 dollars and Best Buy offered a 4-year Performance Service Plan (i.e. warranty) for about $20. 5% of the product price for 4 year extended warranty? Buy it!
Less than 30 days before the end of the PSP time period that iPod died and Best Buy ended up replacing the circuit board and replacing the hard disk with a 20GB disk.
The point is to understand what failure modes are possible for the device you're buying and evaluate whether those are likely enough and the extended warranty proportionally cheap enough to be worth buying.
Different lesson learned though -- as cheap as that extended warranty was compared to what it cost Best Buy to repair it, it still wasn't worth it because by the time the product failed Apple had introduced new products I wanted instead. Hey, it was my first Apple purchase and I didn't know about their upgrade cycle yet...
Gadget insurance is idiotic. The only people who carry it either (a) can't take care of their shit, or (b) intend to defraud the insurer. Because of this the premium/deductable schedule is such that you only win if you file a claim every three months - at which point the insurance company decides you're trying to defraud them and your denied coverage - and you lose any way.
Depends on the gadget. I have my watch specifically insured, because frankly it's bloody expensive and I work in a city with a high crime rate.
Similarly my laptop is a named item on my home insurance.
What I don't have is an extended warranty. That's not insurance, that's a rip-off :)
Well Direct TV Actually. But then I like Rugby and that is only offered on Setanta :( So I have to pay. If it wasn't for that Netflix plus local stuff OTA would be enough for me.
Top of the line phones aren't excessively more than your $300. Sure, the Nokia n900 is $520 not $300 but it's the absolute top-end of phone hardware these days and anything more than a few months old is much cheaper than that.
At the other end of the scale, Amazon.co.uk is selling a perfectly capable Nokia mobile phone for under $40 and that includes some free airtime.
I think there truly is competition in the mobile telephony market; that Apple overcharge for their hardware is just a reason to buy from their competitors instead.
As for extended warranties - don't buy them. Not on cars, not on electronics, not on anything. Your laptop or your car is either going to break in the first six months and be covered, or isn't going to break until after the extended warranty is up. Even if it does break in the sweet spot, odds are what you paid for warranty coverage is about what it costs to fix your problem,
Your assertion is false. Proof by counterexample: I bought a $1500 laptop and bought a 3 yr warranty (default was 1 yr). I have used the in-home warranty three times, all 3 outside of the default one year warranty. In the case of laptops that cost more than a few hundred dollars, NOT buying an extended warranty (for the period you intend to use the laptop) is foolish. One should include the cost of coverage for the period of use in the budget for the laptop because of the high cost of laptop repairs and how much more difficult it is to service them yourself. Twice, the solution was to replace the motherboard, which easily cost 4 times the price of the warranty.
Thanks for trying, Mr. Knowitall. I guess you're not as smart or prescient as you thought.
+1
So what? You were a sucker, but were lucky. Your anecdote is hardly proof.
Do you think that somehow they push those extended warranties because they lose money on each one? No!
Overall, they make money. They have statistical models to make sure of it.
The probability was that you would not come out ahead, that the company would.
It's like claiming roulette is a great game because this one time you bet on 23 and it hit...
Regards
On a related note,
I once worked with a sales guy and he once told me that every 2 years, he "accidently" dropped his laptop while on the road just so that he could get a newer model. The company we worked for was very cheap and that was the only way to get an upgrade. At that time, I was using a laptop that was 5 years old, so I guess he knew how to work the system and I didn't....
If the result of Apple's release strategy is that their customers destroy their phones, perhaps they should give customers what they want in the first place.
Outright lying, in a way that places you in breach of obligation provable in court, is indeed a bad strategy(at least in a perfect world). Since litigation is complex, intimidating, and expensive, you can get away with a lot if you pick you targets right.
Much more productive and much safer(and thus much more dangerous for your customers) is the very broad and creative spectrum of strategies you can employ to shape the situation without ever being strictly guilty of anything.
For instance, consider the simple(and very logical) organizational decisions that can be used: With a lot of telcos, cable outfits, and other such entities, Sales and Customer Retention are located in the more expensive(but generally customer preferred) domestic call centers. Tech support, billing inquiries, and the like are shunted off to long automated phone trees that eventually land you at some cut-rate Hyderabad outsourcer. Not only does this save money, it sharply reduces the likelihood that your customers are going to call and rectify minor billing errors or technical niggles, or successfully cancel any of those 30 day free trials before they start adding fees.
That simple service asymmetry can, in addition to saving you money on call centers, induce all but the most desperate or motivated customers to just give up and leave some money on the table for you.
Among retail stores selling gadget insurance, you sometimes see a different tactic: employees are judged on, among other things, their attach rate for insurance plans. Either they can be simply fired outright for not pushing enough, or there is some sort of bonus on the line, or they can just find themselves getting the last pick of hours. It is of course in no way corporate policy to misrepresent the terms of gadget insurance, and we would naturally investigate any reports of such misrepresentation by inadequately trained or disciplined sales associates who are no longer with the company... But, obviously, when you subject powerless peons to that set of constraints and incentives, it isn't rocket surgery that a fair portion of them will stretch the truth to make the sale. Nothing in writing, and nothing you could ever be demonstrated to endorse; but reliable nevertheless. If you, just to complete the picture, also grade associates on number of accepted warranty fulfilments/value of replacement merchandise handed out/etc. and tacitly discourage them(because fraud protection is important, of course, not because we hate our customers) your associates will deny the claims for you. In order to avoid real trouble, you should, of course, accept the claim of anybody who escalates the situation to a manager, or still has a copy of his written policy, or who otherwise shows signs of spine. You still get to keep all the money left on the table by the more easily discouraged.
With the right incentive shaping, you can oversell and underdeliver by a very worthwhile margin without ever running afoul of the law in a terribly provable way, not that most of your customers would manage to take you to court even if you did.
Before I had an iPhone (which At&t does not offer insurance for [about.com]), I had insurance on each smartphone I bought. It was ~$5 a month and a $50 deductible, and they only replaced it with new or refurbished model of the exact phone I broke, so if I broke a phone after a year that means I paid $60 + $50 deductible = $110 for a refurbished smartphone. They were coming out way ahead, so I don't understand all the crying by insurance companies.
The refurbished smartphone is probably worth more than $110. A year ago I "paid" $175 for my current smartphone with a two year phone+data contract. Without the contract, the phone was $625. Since then, the price for a new phone has dropped to about $475. A refurb goes for about $300. So if my phone dies today, I've paid $60+$50 deductible=$110 for a $300 phone. Given that the past two phone models I owned both died during year 2, I will probably keep the insurance through most (but not all) of year 2 of the contract.
It also appears the insurance is either $4 or $5 depending upon which phone you own, so I think the more expensive your phone is, the better off you are buying insurance. I'm happy to let the people with cheap phones subsidize my smartphone habit.
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Wow! Nokia N900, $569.00. That must be very profitable. It's possible to buy a laptop with a 16" screen, a 500 GB hard drive, and 4 GB of memory for that much.
Gadget insurance is idiotic. The only people who carry it either (a) can't take care of their shit, or (b) intend to defraud the insurer.
... or they take reasonable precautions so that they don't have to pay the "lump sum" again (within an expected/planned time frame, at least).
I've never bought insurance before (aside from state regulated, etc.) but I do have a friend who bought a laptop from Dell last summer. It was around $2500, so it wasn't a "gadget" but the principle remains the same: the insurance was roughly proportional to what you'd pay for a $500 phone. He paid another $100 or so for a three year "unlimited" warranty.
The first thing that happened was the screen died. He called up and tried to get it repaired. They said it was his fault (despite the 'unlimited' warranty) and that the warranty didn't cover it: obviously he did something to break it intentionally. Note, he'd had the laptop for only 2-3 months at this point, and he's the kind of laptop user who keeps a (thin) protective sheet between the LCD and keyboard and wipes it down carefully before and after use.
Almost 30 hours(!) on the phone later, he finally got them to allow him to ship the laptop to them to have the panel replaced. About a week and a half later, the laptop was returned: this time with the low-end (1280x780 or some such thing) LCD and a broken Bluray drive and chassis (from improper/rough LCD replacement).
This went on for a while, and he finally got it all sorted... but for over $2,000, or even $250, that's a shitload to pay for something which might not work in 3 months. Most people have a "fun fund" in the low hundreds every month (you know, non-singles and/or people with kids) and it might take weeks to recoup
Consider: mom and dad had the same two or or three phones in their house while you were growing up (maybe they sprung for a wireless handset or two). Grandma and Grandpa had the same phone in the house from the time that Mom/Dad was a kid through until it no longer worked (digital conversion switchover) and the wiring had to be replaced in the walls to get phone service again.
Seemingly, most replacements are due to the item being replaced no longer working (whether due to failure or antiquity).
(The irony is that the hardware in many "junk" phones is still quite capable of modern functionality: it's the software stacks which don't get updated which are lacking. If they'd focus on providing upgrades to the phones, maybe they'd not have to contend with so many intentionally broken phones. Likewise, if people didn't get "free" phones, they'd probably be a bit more careful.)
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
Four in Six? Can we not reduce our fractions? Two out of three.
And its not like I would feel guilty about ripping the company that decided 1kB worth of sms should be priced the same as 1MB worth of raw data.
That sounds quite fair - surely you can't expect to pay the same for highly refined, clean, SMS data as you would for unprocessed, dirty, raw data, can you? :-)
Maybe if Supercover didn't spend so much time crying about their predicament, they might actually be able to offer an acceptable service.
In October I had my phone pick pocketed, it was reported stolen to the police within the hour, the phone company within 2 and supercover within 3 days (after spending 3 days in a strange town with no phone or net connection "couldn't you have phoned sooner ?" wasn't what I wanted to here. They claim to have replacements sorted within 48hrs and despite there being nothing usual about my claim and me providing everything the needed very very quickly, it was over a month after my loss that I finally got a replacement. In that time .....
I completed the claim over the phone twice. Only to later be told my application wouldn't be processed because I hadn't REQUESTED a physical claim form and returned it.
I was told it was "shipping today" on 4 separate occasion. 3 of which turned out to be before my claim was approved.
After they'd confirmed they now finally had all the details and my claim would be process by the end of the day "it's just needs to be passed upstairs for the final ok", a process which took a week.
When I pointed out that the hadn't reimbursed me for the £25 of fraudulent calls (which my contract with them covered) they said I'd have to open another claim for that and pay another £25 excess fee
When I asked why my calls were never returned as promised they said somebody had tried to call but I hand't answered. I asked which number and they said "the one at the top of the claim form". I pointed out they might be aware that was the phone in question and it had been stolen !
When the phone arrived, it was an obvious refurb shipped in a jiffy bag.
The wifi on it doesn't work, but I simply can't afford the time and effort of getting it replaced again, not to mention another month without a phone.
It goes without saying I won't be dealing with such a shower of disorganisation and deceit again and I've suggested to my bank (who offer supercover's gadget insurance as part of premium account) to do like wise.
[quote]"An iPhone insurance carrier says that four in six claims are suspicious, and is worse when a new model appears on the market. 'Supercover Insurance is alleging that many iPhone owners are deliberately smashing their devices and filing false claims in order to upgrade to the latest model. The gadget insurance company told Sky News Sunday that it saw a 50-percent rise in claims during the month Apple launched the latest version, the iPhone 3GS.'"[/quote]
So it isn't just possible that the iPhone is easily broken because it's a big piece of glass, a big LCD and virtually any point of pressure on it will easily break one or both?
"Most people, I think, don't even know what a rootkit is, so why should they care about it?"
Thank you... I hoped that I was not the only one who felt sick watching the iPhone "blend" or seeing Bill Nye chuck an Apple IIe to demonstrate momentum (back when they were new, of course).
Oh, I remember when that got posted here. I said I did not care for it and was told I was a stupid asshole for complaining.
Whenever there's a new geegaw out on the market you'll find smashmygeegaw sites spring up like smashmyxbox.com The idea is you paypal these guys some money and they go and get in line when the product comes out, preferably midnight of launch. They'll then unbox it, dance around in front of the other waiting geeks to show it off and then smash it to pieces with sledgehammers. The whole point is to catch the moment of transition between jealous nerd lust and horror at the act just witnessed. The whole process is accompanied by frat boy laughter, the kind you're used to hearing when you see a video of someone doing something stupid that suddenly turns painful and disfiguring and the guy with the camera shows no sign of human compassion and concern, just keeps yucking it up because he finds the pain of others amusing.
Yes, I think it's stupid for anyone to get worked up over any consumer product. It's a lifeless object, it's not family. Seeing a teen blubbering like a baby over the smashed box is embarrassing. But saying so doesn't mean the smashers aren't equally embarrassing. And you get a sense they'd enjoy doing the same thing with puppies to get that same reaction, the only thing holding them back is jail time.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
In my day we used to call that 2 thirds.
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