Quote:
Originally Posted by Bill14564
I don't disagree and I normally don't take extended warranties either, but I think about it differently.
Things I have lost money on yet keep paying:
- Car insurance - over 40 years
- Health insurance - over 35 years though I may be getting some of that back now
- Home insurance - over 30 years
- AAA membership - a few years now
- golf cart towing/rescue - a few years now
I pay all those because however unlikely it may be that I have a problem, I would rather pay the premium today than pay the cost out of pocket later. I wouldn't pay for an extended warranty on my wireless router, if I have a problem I'll just replace it with a different brand. I *might* pay for the warranty on a $2,000 refrigerator to avoid paying again to replace it in the next few years.
You almost always lose money on extended warranties but when you don't lose money, when there is a problem, you're really glad you have one.
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I have all of those things except the golf cart, since I don't have a golf cart. But, I have them mostly for the liability coverage, where I have a large amount of coverage. But, if they raise my homeowner's insurance too much, they may lose me as a customer. I believe in self-insuring whenever possible. According to Clark Howard, companies that sell extended warranties only spend 8 percent of the premiums collected to pay claims.