In a recent post we argued why device insurance is a bad deal. The example in that post looked at the cost of purchasing AppleCare+ for iPads versus using a 3rd party repair company. We wanted to do a similar example for Chromebook insurance. The big difference is there are a lot more options for Chromebooks than iPads. That said, this fundamental truth remains:
Insurance companies wouldn't offer insurance if it was a good idea, and device insurance for schools is a guaranteed loser.
Insuring 1000 Chromebooks Chromebook insurance is a bit trickier to price than AppleCare+ because the companies that offer it don't generally make their pricing public. There are also a lot of factors that determine device insurance pricing: what kind of device? new or used? how much is it worth? etc.
Fortunately, we've talked with a number of schools that use a company called Worth Ave and we have a decent idea of their pricing. Again, the following is not exact but we also aren't picking their most expensive plans.
Number of Devices: 1,000
1-Year Chromebook Insurance Plan: $20
Chromebook Breakage Rate: 10%
When we run the math we will see the cost of insuring 1,000 Chromebooks is:
Cost / Year = insurance cost X devices + broken chromebooks X deductible
Cost / Year = (1000 x $20) + (100 x 50)
Cost / Year = $25,000 per year.
Repairing a Fleet of 1000 Chromebooks Now let's run that same calculation assuming you skip the insurance and have your Chromebooks repaired. Again, there are a lot of assumptions here. In particular: who is doing the repair? what kind of devices? what kind of repair?
We'll assume a repair cost of $75. If you're doing the repairs in-house, it's likely a bit less than this.
Cost / Year = broken chromebooks X cost to repair
Cost / Year = 100 x $75
Cost / Year = $7,500
The Winner Is...
Insuring 1,000 Chromebooks will cost a school about $25,000 per year.
Ditching the insurance and repairing devices as they break will cost about $7,500 per yer.
That's a savings of $17,500 per year!
It's clear: device repair is a much better financial decision than Chromebook insurance. A few more things. There are four other big advantages to going the repair route:
You will have to pay the entire cost of insurance up-front.
Insurance companies love paperwork, so you'll often find it's simpler to go the repair route.
No contracts with device repair (or at least, there usually aren't unless the school wants them).
Most insurance plans will only cover a limited number of breaks per device. That means if a student breaks their Chromebook multiple times, you're likely to have to find a repair option anyway.