Quote:
Originally Posted by smallhagrid
BUT - if the unit goes flooey after even 2 years and it is not a battery problem, you'd get ALL $150 back - a pretty darn good deal, wouldn't you agree ?
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No.
I can put $5 on a 200/1 horse. If it wins I get $1000, a pretty good deal, wouldn't you agree?
Earlier in the thread it was posited that it would be a good idea to buy a $20 3 year extended warranty for a $100 item.
For that to pay off, it has to be more that 20% likely that the device will break in those three years. But worse that than, you probably already have a free 1 year warranty, so it has to be more than 20% likely to break in years 2 or 3.
Extended warranties are extremely profitable for those selling them. That is for the same reason that bookies make money, they set the odds in their favour.
As said before, insurance is for those risks which could potentially wipe you out financially or have other serious consequences.
- House,
- Car (third-party liability),
- Health (depending on where you live),
- Llife (if you have dependants)
- Travel (in certain circumstances, eg legal and health cover if going to the US).
Anything else, it will cost you less in the long run to self-insure.
Insurance is for extremely low-likelihood, high-impact events. The more likely something is to happen, the less worth it is to buy insurance, rather than just budgeting for it in the first place.