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.'"

Comments

It's covered in the contract

[BadAnalogyGuy]

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.

Re:It's covered in the contract

[Sandbags]

i have insurance for ALL device on my person carte of a rider on my homeowners insurance. There's a $100 deductible (per incident, not per device), and it covers loss, theft, accidental, and incidental damage. It covers me, my wife, anything in our cars, and anything a 3rd party has on them while they're with us so long as they're "staying with us" for the night. (for example, and this was the specific example they gave: my parents come to stay for the holidays, and we go out to dinner. While out, seeing a movie, my car is broken into and Dad's camera and laptop are stolen. HIS stuff is covered by my insurance. Same goes if we're mugged. If I drop his DSLR trying to take a picture, also covered).

It costs me about $45 a year for this rider on my policy. it has a $10,000 per incident coverage, and $25,000 annual maximum. (default is much less, but I'll regularly travel with 2 laptops, a media device, a few phones, and several cameras, so i could easily have 10K worth of gear in my car).

This is an extension of the electronics rider on the policy, which bumped my home electronics coverage from $5k to 25K of covered items, which itself cost about $14 a year more, and I added the accidental/incidental clause for a bit more. (note to all you with homeowners insurance, the default electronics and appliance coverage likely does not even cover your fridge, washer, dryer, water heater, AC, heater, etc, let alone your TV, stereo, computers, devices, and more. Without this rider, those each need to be itemized with your insurer, or if you burn down or take a bad lightning strike, you'll be left holding the bag for the difference! Talk to your insurer and make you everything is not only covered, but covered for COMPERABLE OR BETTER REPLACEMENT, most only covers depreciated value, which is worthless! Talk to your insurer and make sure you have an electronics rider!!!)

I buy warranties on most devices, and always pay for at least $10 of the device using my Visa card as well (even when financed otherwise), so I get the additional 1 year warranty extension from them. However, the additional coverage for loss and damage is WELL worth it. I regularly get devices replaced within the 3-5 year terms. In fact, I've not bought a printer/fax in nearly 10 years thanks to BestBuy, but i get a new one about every 18-24 months and buy a new $29 warranty on it.

I've had 2 cases where I used the insurance. One time I was bumped at a trade show, and destroyed a several hundred dollar lens on my camera, filed a report and had the cash in a few days. The other time, my was a car wreck that destroyed a laptop. I've never used it for "malicious" purposes, but I did get IN WRITING from my provider that I was in fact covered for "fits of anger" though i was cautioned that frequent use of that clause could get my insurance dropped. However, since I'm using home insurance on 2 houses, 2 cars, multiple rider policies, and some additional coverage, all from the same company, odds are the near $3500 a year I pay them is keeping them happy enough to replace a few minor devices if I chose to.

Insurance Offerings

[sanosuke001]

When a company offers insurance on a product where they will replace it for any reason, why do they expect anything else?

Re:Insurance Offerings

[Anonymous Coward]

When a company offers insurance on a product where they will replace it for any reason, why do they expect anything else?

You're assuming the insurance company's claim that it "looks suspicious" is true.

We're talking about an insurance company here - insurance companies will do and say anything and everything to get out of paying a claim.

I think the insurance company in this case is making suspicious claims. They're basically questioning Apple owners who make claims and implying that they're dishonest.

I think it's the other way around.

Well...

[Anonymous Coward]

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...

original article

[sl0ppy]

how about linking to the original article instead of a blog entry attempting to get page views by copying chunks of the article?

Four in six claims

[Get on the boat]

Least it's not as bad as two in three.

Re:It's Even More Explicit Than That

[fuzzyfuzzyfungus]

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.

Re:how is this different

[Fareq]

I also wonder: how many people have malfunctioning cellphones that should be replaced under either warranty or insurance, but are tired of arguing with the warranty or insurance companies -- so they physically destroy the device, and then there's no argument about whether or not it is in need of replacement.

Re:It's Even More Explicit Than That

[jollyreaper]

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.

Re:how is this different

[twidarkling]

[ Please people, don't reply with good advice, I'm not asking for it. ]

How about bad advice? I suggest filling it with peanut butter and threatening allergic people with it.

Re:It's Even More Explicit Than That

[AndersOSU]

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.

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.

think gadget insurance is pretty crazy to begin with.

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.

especially gap insurance

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.

I'm wondering if maybe a better model might not be leasing the equipment instead.

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.

Re:how is this different

[fuzzyfuzzyfungus]

Allahu Akbutter!