Classic protection plan

[Sylver]

Originally Posted by just_jeepin

I added my Sony Reader 505 to my State Farm Personal Articles Policy (which covers jewelry, etc) for less than $5 a year. My total Personal Articles Policy which now covers my wifes jewelry, my iPhone4, my Sony Reader, and my MacBook laptop all for around $25 a year total!

If any are stolen, broken (by dropping, etc.) it's covered with no deductible. Check with your insurance company.

Wow, never thought of this option - a $25 annual covers jewelry, iphone, reader and MacBook? And you are sure there is no deductible? It just sounds too good.

[GreenMonkey]

I never buy protection plans. It makes sense to some extent on large, large purchases - like a car. Never makes fiscal sense on small items.

But $30 on a $200 technology item? And one without any moving parts? You're better off saving the money towards a replacement, if needed.

[just_jeepin]

Originally Posted by Sylver

Wow, never thought of this option - a $25 annual covers jewelry, iphone, reader and MacBook? And you are sure there is no deductible? It just sounds too good.

Yep, no deductible. I double checked. Of course I have 2 autos, home and life insurance through them also but it doesn't hurt for people to check.

[ejm]

Originally Posted by just_jeepin

I added my Sony Reader 505 to my State Farm Personal Articles Policy (which covers jewelry, etc) for less than $5 a year. My total Personal Articles Policy which now covers my wifes jewelry, my iPhone4, my Sony Reader, and my MacBook laptop all for around $25 a year total!

If any are stolen, broken (by dropping, etc.) it's covered with no deductible. Check with your insurance company.

Thanks for pointing this out! Insurance companies are masterful at deriving and pricing out actuarial tables of probability and severity of loss. That one can buy that much coverage for only $25 tells you a lot - and unlike the regulated insurance companies, there is a much greater likelihood those "product warranty companies" will not be around for too many years in the event of an actual claim.

I almost never buy extended product warranties. The vast majority of product problems are identified quickly within the manufacturer's warranty - after that, the odds (unless you mistreat a product) of any out-of-warranty losses drops precipitously - hence the excessively high profits of being in the extended warranty business (and the lush commissions given to sales associates who peddle them - which helps explain the highly motivated sales force!)

The only caveat: an extended warranty might make sense if you are giving something to a kid who is notorious for losing/mistreating stuff. In which case, make EXTRA sure that loss and mistreatment are INCLUDED in the policy coverage. When it comes to the "extended warranty" insurance product, very oftentimes these kinds of losses/damages are not covered.

So like you said... check the policy carefully before shelling out $20 to $50 to protect a $150 item. That's an effective loss rate ("EL") of upwards of 33% ... which represents a HIGHLY profitable coverage to be writing (but not buying).

Ok, admittedly that's more than $0.02.