Assurant is a mobile phone/appliances insuring company and its CEO Alan Colberg had an appearance on Monday on Bloomberg TV. What he had to say caught a lot of people’s attention.
Everything started smoothly, something along the lines of a sales pitch, with Alan Colberg explaining why his company had seen a surge in demand as customers are charged much more than in the past by carriers to replace their damaged/lost devices (smartphones).
He explained that not 5 years ago, the average American consumer had no idea how much that “free” smartphone actually costs, believing it’s free or very close to free.
Nowadays, a high end smartphone which can be yours for basically zero money upfront, if it must be replaced, it will cost you north of $600 easily. But what he said next was very interesting.
Let me quote the man himself.
The reality is, half of Americans can’t afford to write a $500 check,
The shocking statistic was spun by Colberg by him claiming that when an American customer signs up for a cellular plan, he’s happy and willing to buy insurance just in case the phone gets damaged or lost etc.
But what this guy is really saying is that tens of millions of Americans who don’t even have half a grand in their bank account are ready to spend more than what they don’t have on a smartphone and then are “naive” (I am being nice here) enough to make 12-24 monthly payments on that deal, ending up paying way more than $500 to “protect” the respective smartphone which they could not afford in the first place.
According to a very recent survey, it looks like this guy Colberg wasn’t exaggerating a bit, as 57% of Americans do not have enough cash to front a half a grand (that’s $500 for millennials) unexpected expense. And if you think that’s bad, well, it’s actually better than it was in 2016, when the respective figure was 63%.
The survey from Bankrate really shows the fake news story behind the so called recovery from the last 8 years, which actually skipped more than half of America, which literally lives paycheck to paycheck on a daily basis many years after the official end of the 2008-2009 recession.