Owners Smash iPhones To Get Upgrades, Says Insurance Company 406
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.'"
Comment removed (Score:5, Interesting)
Re:It's covered in the contract (Score:4, Interesting)
These users are getting what they were promised. That's all.
And often less. I took out that insurance a few years ago when I had a (then new and hot) Razr, which was stolen within two months. Six months later the replacement fell in the toilet, and they replaced it -- and cancelled the insurance on me.
I haven't insured a phone since. Nor have I bought the latest and greatest $600 phone; I paid $100 (no contract) for my i776, which is about what a year's insurance cost for the Razr. Hot and sleek? No, but it will call, text, email, get on the internet. It's good enough.
I'd like an iPhone, but I no longer think an expensive phone is practical.
Re:Umm....duh? (Score:3, Interesting)
I smell cow dung... (Score:3, Interesting)
"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.
Re:how is this different (Score:5, Interesting)
The day I bought my phone (3G S) the sales person in Best Buy was trying to sell me an extended warranty. They were telling me how they covered everything under the sun and I should just buy it.
Right next to me, someone was bringing in a broken 3G and trying to get a 3G S warranty replacement and they told him to go screw himself, and that the warranty didn't really cover much of anything at all.
I turned to the sales person, pointed to the conversation right next to me, and said "that's why I'm not buying the warranty. I know you're full of shit."
Do people lie to abuse the system? Sure. Do they lie when selling the warranties? Yes.
Re:It's Even More Explicit Than That (Score:4, Interesting)
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.
just build it into the business model (Score:2, Interesting)
HULK NO LIKE iPHONE! (Score:4, Interesting)
(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.)
Re:how is this different (Score:4, Interesting)
almost none compete with the simplicity, the ease of use, the consistency and reliability (software) and featureset of the iPhone.
I'm surprised you included "featureset" in there, because that's the one where the iPhone is objectively worse than its competition.
One could argue over whether or not the iPhone is really any easier to use than Android, for instance, but there's no denying that Android does more: turn by turn nagivation, widgets, and background apps are pretty major features that the iPhone is lacking. Now that Android has multitouch, does the iPhone even have any exclusive features?