It’s a truism that insurance is a business where you bet you’ll break your toys and insurance companies bet you won’t – and that insurers have the stats on their side. The WSJ uses the example of a broken screen on an iPhone 6 to show how the numbers stack up, illustrating that most people are better off taking the risk.
Without AppleCare, Apple will charge you $109 for the repair. With AppleCare, Apple still charges a $79 deductible, and you laid out $99 for AppleCare in the first place, so you’re now out a total of $178. In effect, you paid $99 to cover a $20 cost.
Of course, you may manage to destroy your phone completely, and you may – if you’re an exceptional klutz – even manage to do it twice, when AppleCare could save you a lot of money. Some MacBook repairs are also very expensive, so again things could work out in your favor.
But overall, insurers make money because it makes more sense just to pay for things when they break. The WSJ got some simple advice from an economist on the most sensible approach for most of us.
Yet for most of us, here’s a better plan from Richard Thaler, a renowned economist at the University of Chicago Booth School of Business: “Every time someone offers to sell you insurance on a non-large purchase say no, and take that money and put it into a rainy-day account. With any luck, there will be plenty of money in that account the next time you drop your iPhone.”
The economics may be slightly different if you can get a deal on AppleCare. You can save a few bucks buying direct from Apple on Amazon, while B&H and Adorama also have deals. Apple’s education store currently offers the best saving if you qualify.
How has having or not having AppleCare worked out for you? Let us know in the comments.
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Apple care is now $120 not $99? Or did I miss something? If so, even worse!
Only for the 6s and 6s Plus.
I never cracked an iPhone in 5+ years of ownership. Unfortunately I cracked my current iPhone 6 and paid $109 plus tax to have it repaired. If you get it repaired outside a licensed Apple Store, it’s worth mentioning that your warranty will be void. So that’s another cost in some ways. Still cheaper but had I invested in a way to keep the new phone even more safe, I probably never would’ve needed the extended warranty at all.
$109 is a lot cheaper than five years of AppleCare …
Yep, this was my thinking for all 5+ years, now it’s finally written down somewhere for others to consider.
Keep in mind that if the phone gets liquid damage, its 269, not 109.
it’s actually great to have in case you damage the whole phone such as dropping in water or if somethings defects after the 1 year limited warranty that needs a whole phone replacement (bottom mic etc.)
don’t forget to keep that in mind it just saved me $329 when my phone stopped powering on 16 months in
That is a very good scenario for having AppleCare. I have a neighbor who’s phone started having issues after about 18 or 20 months and Apple offered nothing short of paying retail for a new phone.
There have been a couple of times when I had issues with an iPod battery that I was offered service specifically because I had AppleCare (at least that is what I was told) that would not have been available otherwise. My son has even had that experience too with his iPod Touch.
I’d say that in some circumstances AppleCare is worth buying.
“don’t forget to keep that in mind it just saved me $329 when my phone stopped powering on 16 months in”
When calculating your savings, did you include the deductible you pad as well as several years of AppleCare premiums its no claims?
I have purchased Apple Care with every single Apple product I have owned, which is at least 15 devices. For the most part, each of those devices (specifically mobile) haven’t required any service outside the factory warranty. I take exceptional care of my Apple devices. I have owned every iPhone on launch day, only used a case for maybe a total of one month (always Apple designed cases), and never broken a screen. I did recently get a hairline crack on my 6S plus that I am waiting to claim until I can’t stand it any more. So for mobile devices, I haven’t had to use Apple Care. BUT when it comes to Mac. I have owned several MacBooks, MacBook Pros, Mac Pros, Mac Mini’s, iMacs. A logic board replacement can cost upwards of $900 with no Apple Care. I have needed Logic Board and Hard Drive replacements on 4 of my machines near the end of Apple Care around roughly the 2 year 9 month mark. The cost without AC would have been over $1000. It would have almost been $4000 for those repairs without AC. So, let me do some rough math: Over the years, I have spent around $2442 on AC. So just the replacement of 4 logic board and hard drive replacements would have cost double that. I will still continue to purchase AC. I will also always use the Apple Store to do my repairs. Sure, you can get repairs done elsewhere. But for the quality of care, service, and parts, I will always go Apple.
AppleCare: For Macs? Yes. For iPhones? NO.
I’m with you and I’ve been using Macs since 1984. For many of those years I traveled and presented from of a portable Mac (powerbooks, MacBook Pros) and AppleCare has saved my bacon in the field numerous times. Very fast turnaround and amazing service.
One of my early AirPort routers failed at home and Apple sent a new one out even though it was past warranty because I had AppleCare on the two Macs using it (no AppleCare on AirPorts). They sent the new one out immediately, told me to throw the old one out or recycle it (didn’t need it back).
Generally speaking, Apple has given me amazingly good service with AppleCare on the Mac.
I’ve been buying it for our iOS devices as well as a matter of course although I’ve never had issue to use it, we too take very good care of our Apple gear. My wife fell in a stream and was completely submerged with her iPhone 5s with an Apple case. She got out fast and got the cover off and the 5s was dry in the back (where it was covered) and worked. Had it died I doubt Apple would have covered it but it would have been an interesting test.
At times I get the feeling that in questionable situations, if one has numerous Apple products with a history of AppleCare, Apple will give you the benefit of the doubt. That’s a feeling, not a fact, and it no doubt is different from store to store, Apple person to Apple person.
The hard part for me when considering AppleCare is that, for those of us who own many Apple products, it clearly isn’t worth it to buy for all of them. The failure rate is far too low (and the replacement cycle too fast) for AppleCare to provide meaningful value.
That said, I was using my iPad Air last week when the screen went wonky. I pressed the home button, thinking it was an issue with the app. The screen went black, and nothing I did turned it on again. Attempts to restore the software present error messages that suggest the logic board is fried. It’s two years old, meaning still covered if I had purchased AppleCare (or is AppleCare no longer three years for iPads?). Without it, it’s $299 to essentially replace the device. iPad Air 2 is a year old… no word on when Air 3 will come out… I’m left without an iPad and kicking myself a little for not getting AppleCare.
But… since I didn’t know my iPad would be the device to stop working (especially since my original iPad still works just fine), I would have needed to purchase AppleCare for MacBook, Apple TV, iPhone, iPad, etc., to be fully covered. And there’s no way that expense is worth it.
Okay, enough rambling.
I think you missed a couple points here. 1. You get TWO incidents of damage. 2. Applecare+ also covers liquid damaged device. 3. If your device is bent in anyway, and cannot pass their calibration tests, you’ll be presented with the option of either walking away with a phone that doesn’t work, or purchasing a refurbished replacement for $269. 4. If you fix the phone yourself or take it to a third party, you void all warranty repairs. So if you later find your phone doesn’t power on or has other issues, and they open the device and find third party parts, they will completely deny service. Not even a 269 phone option. AppleCare may be an “extended warranty” and many will consider it a money grab, but the pros outweigh the cons. Its not always about the raw numbers. The 2 year telephone support doesn’t hurt either.
It all has to do with the price of the repairs and the usage you make of a given device.
For example, almost any repair on a Macbook will cost you an arm and a leg. And that problem is made worse by the fact that we tend to take these on the road, increasing the risks.
The same probably can’t be said of a MacMini or a Mac Pro, that sits quietly and safely, somewhere under your desk, connected to a good surge protector/battery device.
Apple Care+ is a must on a new Mac, but not on iPhones or iPads.
Friendly tip: The Wells Fargo Visa card (no annual fee) includes free insurance for your smartphone that covers not only damage but also theft. no charge, for this coverage, you just ned to pay your cell phone bill every month with the card.
https://www.wellsfargo.com/credit-cards/features/cell-phone-protection/
More correctly to say “The numbers on why you probably don’t want to buy AppleCare for iPhone, at least at retail price”
If anyone here lives in the UK, is soon to travel to Europe and is thinking about getting an iPhone. Get it in Europe!
Not only do you save quite a sum of money on the crappy strength of the Euro but also, at least in Spain, Applecare+ even for the 6s is €70 and it works worldwide. The only, completely minor, downfall is that the box inc. instructions will be in another language and you’re stuck with the 2 pronged charger
Also AppleCare covers accessories. Which almost no one thinks about.
So if you have a TimeCapsule or Airport and have APL Care for Mac, they are covered.
I recently had to replace a wireless mouse for my iMac. Covered. In the past I had to replace a TimeCapsule that failed. Luckily it was covered under my iMac APL Care and I got a brand new one because they no longer sold the previous version I had.
Like it was mentioned before, definitely worth it for A Mac, hands down.
iPhone lightning cable, headphones, USB adapter covered.{ This marks another pro for the mobile side. Mobile is a little tougher to justify, but I always have done it and always will.
I wish they would add priority appointment/repair/swap for APL customers though.
Apple care is more than just the two incidents. It also provides phone support for two years from the date of purchase. Apple devices only come with 90 days of complimentary support. And Apple Care for Mac is 3 years, vice the two for iOS devices.
I have my iPhone 5S for over 2 years now. I’ve dropped it a couple of times but it’s fime, just a few scraches. Also my MacBook Pro’s have serves qell over the time of the Extended Warranty.