Extended warranty, yes or no?

When purchasing electronics, home appliances, and other devices, many retailers now offer an extended warranty, sometimes called a protection plan or service contract, but is the peace of mind worth the extra price? The Better Business Bureau of Greater Houston and South Texas offers the following tips on what to consider before you purchase an extended warranty:

Review the manufacturer’s warranty first. Since most products already come with a free manufacturer’s warranty, extended warranties often provide overlapping coverage you might not really need. For example, if you buy a washing machine with a 5-year manufacturer’s warranty with decent coverage, do you need the two-year extended warranty offered by the store?

Check your credit card benefits .If you make a purchase with your credit card, you may already qualify for an extended warranty, free of charge. Typically, credit card companies add up to a year of additional coverage and cover the same defects as the manufacturer’s warranty. You’ll need to check with your credit card company to find out if they offer extended warranties and what kind of purchases are eligible. If your credit card does offer an extended warranty for your purchase, be sure you keep the documentation necessary to file a claim.

Before buying a protection plan, read the fine print to see if there are many exclusions that make the plan less valuable. If you are worried about theft, loss, and water damage but these factors aren’t covered by an extended warranty, or if you see phrases like “coverage excludes repairs due to accidental damage,” you may decide the coverage isn’t worth the cost.