As some of you may know, I bought a perfectly brand new, shiny iPhone 4S the day it came out of Apple's doors on October 14th (I actually pre-ordered it, but that's another story). So you may know where this is going.
Exactly one month to the day, while casually getting out of my car, my phone decided to betray me - i.e. it jumped out of my pocket and landed harshly on the asphalt. Needless to say, it now looks like this...
Talk about shattered dreams. And to make matters even worse, I had just finished downloading the new updates that quelled the notorious "battery life" problem the phones were having! Ironnnyyy.
I did have a saving grace though...or so I thought. Luckily, I was coaxed in to purchasing phone insurance by the sleazy AT&T salesman. So I'll be getting a new iPhone really soon, right?
Wrong. I had been duped. Upon realizing my misfortune, I immediately called AT&T (with the shattered, yet fully functional phone if you were wondering). Not only did it take about 20 minutes just to get to talk to a real person, but once he got on, I was told some pretty discouraging news. Yes, I had bought the insurance, the $5.99/month charge was showing up here in my records. However, due to the fact that you caused the damage to your phone, as I was told, and because it was not an
inherent problem with the phone itself, my insurance was essentially void.
Say WHAT?
However, if I wanted to I could buy a brand new phone for just the initial selling price of $199. Ha, um, sure let me get my card out while you rob me blind please. NO thanks. I even tried finagling my way through the much nicer Apple customer service. Best they could do was offer me a replacement screen for $150. Basically, despite the insurance I paid for my phone, I was S.O.L.
So it got me thinking...Why do people even buy insurance in the first place? Is it ever really even worth it? My research yielded some interesting results. At least in the realm of health insurance, people tend to equate health insurance with actual health care. That is, they purchase it due to their fear of not being treated if they become sick, rather than buying it to avoid really high medical bills. Also, people tend to buy health insurance because they think it will prevent them from becoming sick in the first place. That's extremely irrational you might say, who actually does that?
A little digging into the phenomenon of negativism can answer that question. Research by Jane Risen and Thomas Gilovich has shown that generally, people are reluctant to tempt what some may call 'fate'. That is, people believe that negative outcomes are especially likely following behaviors that 'tempt fate'. As an example, a study was given that asked people to read a passage about others who did or did not tempt fate, then choose the outcome to that story. The story was either of a person who decided to bring an umbrella to work or one who did not. Surprisingly, the majority of people who got the story about the person not bringing an umbrella (the one who tempted fate), chose the outcome of 'it began raining while walking to work'. This proved that the participants judged the likelihood of a negative outcome (raining) to be much higher when people tempted fate, so to say.
Back to my poor iPhone story, this idea of negativism makes perfect sense with my purchase of phone insurance. I can remember the exact moment when the AT&T salesman asked me the question: do you want to buy insurance for your phone today? A little hesitant, he insisted that it'd be a shame if I were to break my brand new phone. I began thinking: well, knowing
my luck, if I didn't get the insurance, I'd surely break the phone somehow. And so, because of my propensity to think in terms of negativism, I bought the phone insurance. But was it worth it? Is insurance really worth it? For me, at least for the phone insurance I bought, it was really not worth it at all. Even without the insurance, I was informed that Apple would replace cracked screens for a flat $150 no matter what (of course that tiny bit of valuable information was coincidentally kept quiet by the AT&T salesman. Still bitter). So no, it wasn't really worth it. However, as for health insurance, I think I would sure want an umbrella to protect me from the showers of hefty medical bills.
I remember thinking the exact same thing about our thinkpad insurance. I bought the insurance, because I thought that I would be awfully sorry if something were to happen, and I was on the hook for the repair. When I got a virus and my fan broke (in our first thinkpad) I was soooo glad I had paid the $80 for the insurance- except, it turns out they would fix those things for no cost even if I had no insurance...the insurance seemed like a great deal, because it covered against strange things- like liquid spills, cracked screens, etc. A few months after turning my laptop in, I received a $130 charge to my account. They said the battery casing had a crack and that was uncovered. They said the insurance did not cover this damage, as it was un-repairable...WHAT? I never even noticed an issue before turning in my laptop! It seems to me, that like your phone, these insurances cover the things that won't really happen but leave us to fend for ourselves when an understandable damage occurs.
ReplyDeleteTo go off your point about the contrast between Apple and AT&T service, I have found that Apple has really built up a competitive advantage with their willingness to go out of their way to have pity on poor customers who have experienced the horrible electronic-dropping nightmare. For example, my sister dropped her brand new iPod touch on the floor and completely shattered the screen, just like your phone. We drove all the way to the nearest Apple store (three hours from our house in rural Indiana), just to wait for another hour in the store on the “genius” because they were extremely busy. When it was finally our turn, the Apple employee told us that unfortunately we did not have ANY insurance or plan that covered this damage. Then he said, “But since I feel bad that you had to go to all this trouble to find out if it could be repaired, I’ll just give you a brand new iPod touch for free.” What?! How often do you get THAT response from AT&T?! Case in point, my mom tells that story every time someone brings up Apple in conversation. Even though one single person singing the praises of Apple customer service won’t win them thousands of new customers, you can bet that we weren’t the only people who experienced the mercy of Apple customer service and are living to tell the tale—to everyone. AT&T should take a lesson from Apple and learn that sometimes customer loyalty and positive word of mouth it worth it—worth cutting you some slack on an insurance policy.
ReplyDeleteIn my opinion, this is where businesses' credibility becomes extremely fuzzy, and I begin to lose respect. To run an upstanding company I believe it is so important not to "dupe" customers- just give them the honest information upfront! Not to mention that if there was an inherent problem with the phone it should be replaced for free at the company's expense, not yours. Insurance is meant to "protect you from yourself" so hearing this really does anger me. Anyway, ranting aside, I just want to say that this post motivated me as a future member of the business world to raise awareness within corporations like AT&T to change their policies to be much more transparent. Customers not only appreciate it, but when things like this happen, people get utterly disgruntled at the entire company. You will probably never even consider buying insurance with AT&T again, even if they changed their policy. Sorry for the huge comment. Thanks! Erin
ReplyDeleteIt kills me to see businesses take advantage of people like this when they add on unnecessary charges. Dealing with selling insurance on appliances this summer, the company really pushes you to see them because they do make more money off of it, but there is a certain value that comes into play if the product is in fact defective. This came as a shock to me when I read that the insurance was basically worthless unless Apple "screwed the pooch" and had already messed up your phone. The extra insurance should at least cover accidental drops.
ReplyDeleteI was shocked that your insurance didn't cover the phone! I have never gotten insurance for my iphone (well, all 4 iPhones that I have had, long story) but whenever the phone broke I was given a new phone for little to no cost (as long as it wasn't my fault that it broke). For example, one day my phone completely stopped working and it turns out it was just a faulty iPhone. I went to the store, and since it was not my fault in any way I was given a new phone. Since I was covered to that extent without insurance, i would have assumed that buying insurance would cover all phone malfunctions, no matter what the cause. However, going off of a previous comment, I am impartial to ThinkPad insurance. My freshmen year, two weeks after getting my ThinkPad, my roommate jumped off of her top bunk and straight onto my laptop, completely shattering the screen. However, since I had insurance, the $500 charge to replace the screen didn't cost me a single cent. I think there is a belief that exists about insurance--it won't rain if you have an umbrella, but as soon as you forget it, the skies will open up.
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