May be worth considering.

I have railed before about the terrible economics of most equipment warranties. Terrible, that is, for the buyers, not for the insurance companies which write them. And if there are three words guaranteed to put this taxpayer on guard, they are ‘politicians’, ‘lawyers’ and ‘insurance’. In the case of the insurance industry you have all three. Politicians bought with the legal bribes which pass as campaign donations in the US, lawyers dominating the ranks of insurer and his client, the politician, and of course, underwriters.

A successful insurance company is one which is the most adept at not paying claims – which is why they have armies of lawyers to obfuscate and bureaucratize the claims process – and one of whose worst unintended consequences is that they encourage the insured claimant to engage in fraud, “I’ll get my own back on those crooks” being the prevailing mindset.

So when the nice Geniuses at the Apple Store were through applauding me for blowing $1,300 on a couple of iPads on April 3, the next thing I was offered was – you guessed it – an insurance policy.

There are many slick marketing ways of disguising an insurance policy as something else, every insurer knowing that he and his cohorts are despised. One of the best at this is the American Automobile Association, or Triple A for short. Under the guise of Doing Good (sounds like Google to me) it’s nothing more than an insurance operation fronted for by the local tow truck operator. “We’ll get you out of trouble when you’re stuck” is the sales pitch when the reality is “Good luck getting anything other than a free tow from us, doofus”.

Apple, never one to throw away a good lesson, calls its insurance product AppleCare. You see, they really care about you and your Mac, though not so much when, like most of mine, it fails a few weeks out of the warranty period. That is nothing more than an opportunity for another sale or a jolly good hosing on fixing the old machine.

So I had given the issue of AppleCare some thought before iPad Day and decided against it, primarily because one of the very few Apple devices that actually lasted for me was my 2G iPhone. Given like technology in the iPad, and a general absence of moving parts – the latter limited to a few switches – I reckoned I would take my chances. However, once I started using the iPad (and, equally importantly, once our 8 year old got his hands on it – hey, I have to have someone to blame) I quickly concluded that this is one of the most droppable tools ever made. Slick all over with nothing to afford a good purchase for a one-handed pickup, it’s just asking to be dropped.

AppleCare, however, does not offer accidental damage coverage. I snooped around a bit and came across a business named FairTrade whose core focus seems to be on insuring electronics, cameras and the like. They boast an A- rating from Bests, the insurance rating people, but take no notice of that. These jerks rated AIG A+ right before it blew costing the US taxpayer over $100bn and counting. They must employ the people who didn’t make it at Standard & Poors, Moody’s and Ffitch, the criminal cabal which gave us Triple A ratings on CDO mortgages. But I did take time to scan the hundreds of rating on the web for their service and came away impressed.

Now it’s quite possible that a massive conspiracy at SquareTrade has them writing their own reviews. Remember how revered Enron was just weeks before it collapsed? But it’s a risk I am willing to take because their coverage does extend to accidental damage and is priced much the same as AppleCare which does not. The only catch in the fine print is that you mustn’t drop the thing in the first 30 days of ownership, but thereafter you are covered for 2 years from purchase.

Here’s their blurb:

Are they any good? How would I know? I have yet to make a claim. Which, of course, is the only test of an insurer’s integrity. So I’ll let you know when I do. And I suspect that’s a matter of when, not if, as I come from a family of serial droppers.

Disclosure: Long AAPL and no interest in SquareTrade.