Why device insurance is a bad decision for schools
They wouldn’t offer insurance if it didn’t make money. Some insurance, like car insurance, makes sense. One type of insurance that makes no sense is iPad and Chromebook insurance for schools. For example, insuring 1,000 iPads will likely cost a school more than $24,000 a year over a repair option.
This is because insurance companies make money insuring large groups and not a single individual. If you buy car insurance, you may “win” by getting in a car accident, but because the insurance company insures thousands of drivers, they are the ultimate winner.
Schools with a lot of devices have already created a pool for the insurance company. It’s like a person having thousands of cars insuring them all. They are not going to crash enough cars to cover the cost of the insurance. The same goes for insuring a fleet of devices.
Device repair alternative
Device repair is a better option than insurance. Repairs can be done in-house, sent to a third-party company, or a combination of both. Each option comes with pros and cons but all are a far better use of school resources than device insurance.
In-house repairs are the least expensive option. Find a quality vendor to purchase parts from and most repairs can be done for under $40. The downside is you’ll need dedicated staff and/or students to do the repairs. This takes time and training. Some schools opt to make device repair a club or business class where students learn to run a help desk, manage inventory, “bill customers”, and other entrepreneurial skills.
Third-party repairs are more expensive, but still far less than insurance. The upside is simplicity and time saved. A reputable repair company will provide shipping supplies, have a 7-10 day turnaround time, and offer a solid warranty. Repairs will usually cost $100 or less.
The best solution for many schools is a hybrid of these two. Do the easy repairs in-house and send the more difficult repairs to a third party. This is also a good option when a school is overrun with broken devices – like early summer.
Most schools with a history of device breakage rates can easily calculate this themselves. Here’s a simple example. A school has 1,000 iPads and purchases AppleCare+ for $59 per device for two years ($29.50/year) with a $49 deductible per claim. Assuming a breakage rate of 10%, this school can expect to pay $34,400 per year to insure their devices. Alternatively, using a 3rd party repair company that charges $100 per repair would cost that same school $10,000 per year. A savings of $24,400 per year!
Your insurance costs may be slightly less if you have Chromebooks, but the math produces the same result: you save significant money by ditching insurance and going with a repair option instead.
There are two big objections device insurance companies raise. First, they will say insurance is easier to work with. This is often not true. There will be forms to fill out, your accounting department will need to write checks for deductibles, and there is often a limit to how many times they’ll cover repairs on a particular device.
Another common refrain is trust. This is a legitimate concern but easily overcome with some simple research and common sense. Don’t go to the guy in the mall or the kid advertising on Craigslist. If you’re doing in-house repairs, eBay may not be the most reputable place to buy parts. Find a vendor that has a history and good references. Then do a small order with them and see how they do. How was their communication? Turnaround time? Quality of their work?
There is no reason to continue throwing money away. Ditch the insurance and consider repair options instead.
Matt McCormick is the Founder of TechUnwreck, a Chicago-based company specializing in the repair of Chromebooks, iPads and MacBooks for over 400 schools across the United States.
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