Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Path: utzoo!mnetor!uunet!husc6!sri-unix!rutgers!mcnc!decvax!dartvax!earleh
From: earleh@dartvax.UUCP (Earle R. Horton)
Newsgroups: comp.sys.mac
Subject: Re: Apple Warranties (was: Apple Ha
Message-ID: <7470@dartvax.UUCP>
Date: Sun, 25-Oct-87 13:18:21 EST
Article-I.D.: dartvax.7470
Posted: Sun Oct 25 13:18:21 1987
Date-Received: Tue, 27-Oct-87 07:20:44 EST
References: <7516@reed.UUCP> <8400004@uiucdcsm>
Organization: disorganized
Lines: 36
Summary: But you don't have to buy it...

In article <8400004@uiucdcsm>, rudolph@uiucdcsm.cs.uiuc.edu writes:
> 
> According to my simple calculations, 72% of logic boards would have to 
> die within the first year to make a $90 "insurance premium" on a $125
> item statistically worthwhile.  I find it *** extremely *** hard to 
> believe that the percentage is that high. (I have had my Mac for 3
> years with no problems ever.)  I think Applecare is an incredible
> ripoff!!!!
> 
> rudolph@m.uiucdcs.edu

     Statistically speaking, all insurance is an incredible ripoff.  How
else do you think insurance companies justify selling it?  Statistically
speaking, lottery tickets are a ripoff, too, but people buy them.  No
matter what the statistics say, somebody does win the lottery, and
somebody somewhere (maybe not you or me) blows out three power supply
boards in the month after his warranty runs out.  If a person would
rather pay twice (or four times, or ten times) the expected rate of
repair costs in order to obtain the feeling of security that comes with
having an insurance policy, then he has purchased something which is of
value to him.  True, his expected rate of return is, I don't know, maybe
ten dollars for ninety dollars spent, but his maximum possible rate of
return is much higher.

     This doesn't excuse the incredibly high rates which exist for all
types of insurance, but maybe it does explain how insurance companies
can get away with charging them.  You get at least two intangibles when
you buy insurance:  You get a nice security blanket, and you get the
opportunity to gamble.  Not everyone who buys insurance cashes in, but
everyone does get the security blanket, and a lottery ticket (policy) too.
(I didn't even consider Applecare, I know how much these electronic
gizmos are really worth.)
-- 
*********************************************************************
*Earle R. Horton, H.B. 8000, Dartmouth College, Hanover, NH 03755   *
*********************************************************************