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Insurance Giant Allstate Buys Independent Phone Repair Company, Joins Right To Repair Movement (vice.com)

An anonymous reader quotes a report from Motherboard: Allstate, one of the largest insurance companies in the United States, just made a curious purchase. Through its subsidiary SquareTrade, the insurance giant bought iCracked, one of the largest independent smartphone repair companies in the country. The acquisition means that Allstate has become one of the most powerful proponents of right to repair legislation in the United States. According to Gay Gordon-Byrne, executive director of Repair.org, which is pushing for the legislation, the company has already loaned a lobbyist to the effort in New Hampshire.

This is potentially big news for the right to repair movement, which is trying to get laws passed in 15 states this year that would make it easier for independent repair professionals to get repair tools and parts for consumer electronics. Thus far, it's been largely a grassroots effort from organizations like Repair.org and iFixit. Companies such as Apple, John Deere, Facebook, Microsoft, and trade organizations that represent huge tech companies have used their considerable political power to lobby against these bills. But Allstate's purchase of iCracked is a potential gamechanger. iCracked is a giant chain that does a lot of third party repairs. A change in the laws would benefit it, and now Allstate, as much as the average consumer.
"iCracked has been a major supporter of right to repair, and we really appreciate their valuable contribution to the fight for freedom," Kyle Wiens, CEO of iFixit, told Motherboard in an email. "I'm optimistic that this partnership will elevate the visibility of the work that we're doing together."

"SquareTrade continues to work with manufacturers as well as the independent repair community," Jason Siciliano, VP and Global Creative Director of SquareTrade told me in an email. "As this issue evolves, we will maintain good relationships and continue to listen to the key players on all sides of the debate and will work towards sensible solutions whether they are led by the industry or regulators."

35 comments

  1. company politically supports itself by Anonymous Coward · · Score: 0

    News at 11

    1. Re:company politically supports itself by nukenerd · · Score: 2, Insightful

      News at 11

      They are supporting themselves and as it happens they are supporting tens (or even hundreds) of millions of other people. I don't care if that is a deliberate side effect or not - the enemy of my enemy is my friend. This is big, unexpected, and very welcome news.

    2. Re:company politically supports itself by Anonymous Coward · · Score: 0

      Millions of people already proved they don't care about the right to repair. They use their private dollars, and, without anyone pointing a gun at their head, purchase devices that are not repairable.

    3. Re: company politically supports itself by Anonymous Coward · · Score: 0

      Don't be a dumb***. People don't buy on only one axis.

    4. Re:company politically supports itself by nukenerd · · Score: 1

      Millions of people ... without anyone pointing a gun at their head, purchase devices that are not repairable.

      Most would not know whether something they are buying is respairable or not. You need to be an expert to know. An independent repairer would know this, and I as an amateur, but fairly expert repairer of things, might be able to find out, but most people would only find out when they ask a repair shop if it can be repaired. Eg I once bought a Ryobi garden power tool (never again), and it was only when the ignition coil failed that I discovered that Ryobi spares are unobtainable. So it went to landfill for the sake of a $10* coil: and this is when we are being told to save the planet.

      Anyway, there is little or no choice in the matter these days. Many or most things are deliberately made unrepairable, or the makers will not supply spares, just to boost their sales of new stuff.

      * Cost to maker, and the planet.

  2. I guess... by cirby · · Score: 5, Insightful

    ...Allstate got tired of buying people entire new phones when they cracked a screen...

  3. Not just electronics. Luxury goods by Anonymous Coward · · Score: 0

    Things like materials to repair expensive handbags, watches, other status products. They'll have to hand it over since it'll be cold day in hell before they'll give up on the US market.

  4. Hmmmm by Anonymous Coward · · Score: 0

    "Through its subsidiary SquareTrade"

    You mean the folks who charge for warranties and make 98% profit off of it.

    Yeah. Ok.

    1. Re:Hmmmm by Guspaz · · Score: 4, Insightful

      Whether it's by warranty claims or insurance claims, it's cheaper for Allstate to repair a customer's phone than replace it outright. How is this move anything but a good thing for consumers?

    2. Re:Hmmmm by Anonymous Coward · · Score: 0

      I had the same thought - what's so bad about this?
      But could it increase the cost of repairs done without an insurance plan? Similar to going to the hospital with a broken bone and no health insurance?

      Can I make this post nothing but questions?

    3. Re:Hmmmm by bill_mcgonigle · · Score: 1

      No, nobody forces phone repair companies to fix the phones of people who can't pay for free. And so far nobody prevents competing phone repair companies from forming. Economics may be safe, for now.

      --
      My God, it's Full of Source!
      OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
    4. Re:Hmmmm by Anonymous Coward · · Score: 0

      Do you really think insurance/warranty annual fees will drop by the same amount that Allstate will save?

    5. Re:Hmmmm by Guspaz · · Score: 1

      Who cares what Allstate saves or charges? If their lobbying helps in enshrining the right to repair in law, everybody gets better and cheaper access to the materials necessary to repair the products.

      Right to Repair bills typically do things like prevent companies from restricting access to repair documentation and replacement parts to "authorized" repair centres, allowing consumers and independent repair shops to get the information and parts needed to repair products.

    6. Re:Hmmmm by Aighearach · · Score: 1

      It puts Allstate on the same team as the people who didn't but their extended warranty, and just want to fix it themselves.

      Those are the people that it helps.

  5. It makes perfect sense by sjames · · Score: 4, Insightful

    Allstate is regularly on the hook for the costs of auto repair. The right to repair would lower those costs significantly.

    1. Re:It makes perfect sense by guruevi · · Score: 3, Interesting

      Not just auto repair, they also insure electronics, jewelry etc. wouldn't surprise me if they had a stake in all those phone warranty scams.

      --
      Custom electronics and digital signage for your business: www.evcircuits.com
    2. Re:It makes perfect sense by Anonymous Coward · · Score: 1

      When the costs go down, the insurance premiums go down.
      When premiums go down, total cashflow goes down.
      When total Cashflow goes down, your "float" goes down.
      Without "Float" cash, you can't make money investing, which is the primary cashflow generator for an insurance company.
      When you don't make bank, you are not in business.

      This is not about repairability. This is about market volatility.

      Say for example, Ford is allowed to release a self-driving car that is a total blackbox. It's got an electric motor and battery pack, you can see and measure those, but the software is a total blackbox. Furthermore, lets say a software update to the blackbox causes an increase in accidents in old cars in order to drive new car sales. The cars begin crashing into brick buildings, tree's, and bushes getting totaled out due to frame damage. Now how does All state proove in a court of law, beyond a reasonable doubt, their customers, who have given them power of attorney to collect on their behalf, were harmed? The software is a black box, and you can't peel it open in a court of law without committing a felony. How do you get laws passed to assure the quality of the software?

      That means, at best, it's 4 years of expensive litigation to get permission to open the black box, and by then, they will have designed the system such that the evidence was destroyed within that time.

      Apple can do the same thing reprogramming their phones to malfunction, or by throwing out an intentionally bad batch or generation of phones as a revenue-generator.

      This is about volatility. Insurance companies are only profitable within a narrow window of disaster; they can replace a few houses if they burn down, but not if a wildfire sweeps the town. They might have an interest in revenue assurance by advising the township install fire barriers or flood drains, because they understand the risks well to the town as it is their business. If a wildfire sweeps town, they go bankrupt. Same goes for a flood. Which is why flood insurance is expensive; you can buy it but you wouldn't want to. You just don't build your house on a flood plane.

      If you can't repair the device, you can't see what your risk is of insuring it, and without understanding the risk, the market is going to be volatile and you are going to see huge disasters you can't pay for because companies and interested parties are going to abuse it. Which is sad, because many states require you have vehicle insurance.

    3. Re:It makes perfect sense by sjames · · Score: 2

      Keep in mind that even with multiple competing vendors, an insurance company still enjoys a considerable advantage in the ability to negotiate discounts for volume. Perhaps Allstate feels they can win there, especially if they buy in to repair organizations.

      Where there is only one choice, their ability to avoid being bled dry is limited.

  6. Who are you calling... by Anonymous Coward · · Score: 0

    According to Gay Gordon-Byrne

    Look, there's no need to resort to name-calling.

  7. gadgets are cheap, car electronics are not by Anonymous Coward · · Score: 2, Interesting

    They might... but I think its mainly a backdoor to auto or other heavier equipment repair. With makers like tesla not providing any repair info and other manufacturers pushing that route, the writing is on the wall. Much easier to get the public stoked about gadgets and gain some good will.

    Only 2 shops in an area being able to replace/reset blown airbags in a new vehicle causing Allstate to total the car isn't much of a motivator since the claimants still get paid.

    1. Re:gadgets are cheap, car electronics are not by Aighearach · · Score: 1

      They don't have to provide info, they only have to be forced to refrain from taking steps to stop people from repairing.

      The nerds can figure out the details when parts are available. Understanding the machines is not the bottleneck.

  8. We're in Good Hands by tratson · · Score: 5, Interesting

    You can be sure that Allstate has a crapton of lawyers on salary and they almost certainly have a plan for getting the Right to Repair through or they wouldn't have made this play. I see this as the biggest win yet for RTR!

    1. Re:We're in Good Hands by Aighearach · · Score: 1

      I agree it is good news, but nothing in the reports says what they paid for it. So it doesn't really say much about the strength of their intent.

  9. I guess...Extended warrenties. by Anonymous Coward · · Score: 0

    Why would they be on the hook for a lot since the customer's the one paying for the extended warranty (after the manufacturer's warranty expires)?

    1. Re:I guess...Extended warrenties. by Anonymous Coward · · Score: 1

      Yes, but instead of Allstate paying $800 for a new phone which comes out of the warranty profit, they'll pay maybe $100 which will cover in-house repair and shipping.

    2. Re:I guess...Extended warrenties. by Aighearach · · Score: 2

      They probably replace a lot of phones through theft insurance bundled with other products like renter's insurance, home owner's insurance, auto insurance.

      Theft from my vehicle is covered under my auto insurance, and I've known people who had laptops and phones stolen out of a car that they claimed on renter's insurance.

      Right now, if the phone is recovered from the police with minor damage, it is still a total loss. If there was a Right to Repair, then most of those would in fact be fixable. Also, even if they already replaced it before the old one was recovered, they could refurb that and use it to replace somebody else's later.

    3. Re:I guess...Extended warrenties. by retroworks · · Score: 1

      Accidentally slipped my mouse and mis-modded this informative comment, posting to reset

      --
      Gently reply
  10. If Allstate Puts Your iPhone in "Good Hands" by Anonymous Coward · · Score: 0

    Then why are so many being dropped on the ground and broken? Sounds more like butter fingers to me.

  11. Not far Enough by nukenerd · · Score: 2

    would make it easier for independent repair professionals to get repair tools and parts for consumer electronics

    (My bold)

    That's not enough, although it's a start. These parts need to be available to consumers too.

    1. Re:Not far Enough by Aighearach · · Score: 1

      If you highlighted the word independent instead of professional, it might have been more obvious how it affects the parts market for consumers.

  12. Delusion. by Anonymous Coward · · Score: 0

    Delusion.

  13. Does Allstate offer crop insurance? by Anonymous Coward · · Score: 0

    If they do keeping the tractors operating might be important as well.

  14. Insurance never has alterior motives by Anonymous Coward · · Score: 0

    Looking at the last 40 years of history one would wonder what the insurance company's Real Motive was.
    It is not to help Right To Repair, and it Has Never been to help You.

    Please stop being Sheeple. Look at the past to get an idea of the future.

  15. Ulterior motives by Anonymous Coward · · Score: 0

    And now they can install a tracker and in know location, time spent, speed; inferring all kinds of habits and activities that might have a direct impact on your risk as an insurance customer.