Wednesday, July 6, 2011

Is It Worth the Insurance Money?

That was some storm we had sweep through East Texas last night. And July 4th was not the night for it to happen. I personally experienced a startling blackout at the house. It was not fun at all. When the lights finally came back on, we realized that our Internet modem was "blown" and we were left without access to the Internet. I unplugged the kitchen clock before going to bed as is my post-power surge ritual; it had been losing function lately, but "resetting" it by unplugging it usually worked. Not this time. And, finally, after trying to send a fax this morning, unsuccessfully, I realized that our phone was not working either. These are all items that our household uses daily, so off to Best Buy I went.

The items I purchased qualified for the 2-Year Buyer's Protection Plan at $15 each. Now, I ask you, "Is it worth the insurance money?" In the event of another power surge in the next 2 years I could get a brand new one to replace the old one if it were to cease working. But is it really worth it?

The clock/radio/timer/tape deck combo that I was replacing was about 15 years old and was bought for my first apartment. It was definitely outdated and the only things that actually worked on it for the last few years were the clock and timer functions. I was hoping to update our model for something with a CD player, but I am more than happy with the one I got. If the old one lasted 15 years and the Buyer's Protection Plan is only for 2 years, the additional $15 for the plan doesn't seem worth it.

The Internet modem that I got is necessary for our household because of our home-based businesses. I was able to replace 2 items with this purchase, though, because the new modem was also a router. The old one had been purchased about 5 or 6 years ago, maybe even before then. The Buyer's Protection Plan on this item may not seem worth the $15 either.

The phone/answer machine that was being replaced was a whole-house system with 3 handsets that is used daily for our household as well as our businesses. Replacing this item was more than a necessity because of our business line. However, the original purchase of the unit was almost 4 years ago. This too seems not worth the insurance.

Is it worth it, though? If any one of these units were to stop working in any way within the next 2 years (inside of the approval of the protection plan) they would be replaced.

Let me know what you think.

2 comments:

  1. I would say, generally, the Buyer Protection plans are NOT worth the cost. If a product has a manufacturer's defect it is likely to 'show up' during the manufacturer's 1 year (for example) warranty time period so you wouldn't need the Buyer Protection plan OR as in your case, the product failed for some other reason after the Buyer Protection Plan window of time. It would be interesting to know the percentage of people who can or do utilize the Buyer Protection Plan vs. the number of people who purchase it. Stores like Best Buy are banking on the fact that you either won't or can't utilize the protection plan. They are making money on customers purchasing the plan, but not utilizing it. It just seems like money down the drain...to me.

    A few years ago, I purchased a brand new Kenmore washer & dryer from Sears. They were replacing my old Kenmore set that was about 15 years old. The old ones were still working, but we were moving to a new house; the old set didn't match; they were old, etc. At the time of purchase I declined the opportunity to purchase an extended warranty. Then I started getting phone calls trying to give me "one more chance" to buy the extended warranty. I kept on saying "no thank you." Finally, I asked them to take my number off their calling list and stop calling me. I simply was not interested in paying for an extended warranty. I told them that the reason I bought the Kenmore brand in the first place was because of my previous good experience with the product and the excellent reputation of the product. Why should I pay for an extra warranty? Wasn't their manufacturer's warranty good enough? Were they no longer making their products to last a long time ? Were they expecting their product to fail after 1 year, instead of working for 15 years like their products that I already had? I just didn't make sense to me.

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  2. I agree with BeeDaisy. Most of the time it's not worth the cost of extended warranties for smaller items. I wouldn't get it on anything that costs less than $200. For more expensive items just look at the regular warranty, the life expectancy of the item, and how outdated the item will be if it were to quit right after the regular warranty expired. Would you be better off to buy a new one rather than have to ship the item back to the manu with the extended warranty? Everything in life is a wager...

    Oh, and if you deal with power surges often have you looked into surge protectors? They aren't fool proof, but help a lot.

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