Q. Should I spend $100 to buy an extended warranty for my new smartphone?
A. There is a rule of thumb to determine if an extended warranty for cars, iPads, smartphones, homes or any other luxury products is worth it or not -
if the cost of extended warranty exceeds 20% of the cost of the product, chances are - it is not a good investment!
The reasons are simple:
1. Most new products are required by law to provide some basic warranties already.
2. Many common causes of the problem - for example, you dropped your smartphone to the ground and broke it - wouldn't be covered by the warranty.
3. There is usually a deductible which means your actual cost will be higher.
4. All major credit cards already provide some sorts of warranties free, although it's not easy to file a claim with a credit card company for such coverage, see table below for more details.
A. There is a rule of thumb to determine if an extended warranty for cars, iPads, smartphones, homes or any other luxury products is worth it or not -
if the cost of extended warranty exceeds 20% of the cost of the product, chances are - it is not a good investment!
The reasons are simple:
1. Most new products are required by law to provide some basic warranties already.
2. Many common causes of the problem - for example, you dropped your smartphone to the ground and broke it - wouldn't be covered by the warranty.
3. There is usually a deductible which means your actual cost will be higher.
4. All major credit cards already provide some sorts of warranties free, although it's not easy to file a claim with a credit card company for such coverage, see table below for more details.
| Program | What It Covers | What's Not Covered | Product Exclusions | How to File a Claim | Cost |
| MasterCard Extended Warranty | Doubles the manufacturer's warranty or a purchased service contract, up to 12 months. Covers repairs or replacement up to $10,000 | Normal wear and tear; damage from power surges; failures covered by product recalls; shipping costs; losses due to natural disasters; mold damage | Cars and boats; software; antiques; pets; plants; perishables; consumables; refurbished or used items; data storage media such as DVDs; real estate or permanently installed items such as ceiling fans | Call 800- MC-ASSIST within 30 days, then submit a signed claim form, credit card receipt and statement, itemized purchase receipt, manufacturers' warranty, plus an itemized repair estimate | Free |
| Visa Extended Protection | Doubles the manufacturer's warranty up to 12 months. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000 | Normal wear and tear; items lost during delivery; theft or damage from baggage handlers; losses due to natural disasters | Cars and boats; software; antiques; pets, plants; perishables; consumables; medical equipment; used items; items purchased for resale; real estate or permanently installed items like ceiling fans | Call 800-882-8057 or go to Visa.com/eclaims within 60 days. You'll need a claim form, your card receipt, itemized store receipt, manufacturer's warranty, any other applicable warranty, repair order, a description of the item and its serial number | Free |
| Discover Extended Warranty | Doubles the manufacturer's warranty or a purchased service contract, up to 12 months. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000 | Damage not covered by the original warranty; repairs at an unauthorized facility; normal wear and tear; power surge damage; shipping costs | Cars and boats; services; plants; software; perishables; used or refurbished items; items purchased for resale | Call 800-DISCOVER within 45 days and submit a claim form with the store receipt, Discover statement, manufacturer's warranty, any purchased warranty, and proof that you've repaired or replaced the broken item. (They'll reimburse you.) | Free |
| American Express Extended Warranty | Doubles the manufacturer's warranty up to 12 months. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000 | Damage from natural disasters or power surges, unless covered by manufacturer's warranty; failures covered by product recalls; shipping costs; maintenance; damages to computers or their components covered by a purchased service contract | Motorized vehicles; motorized devices used for landscaping, demolition or construction; real estate or motorized devices installed in a building; plants; pets; perishables; consumables; items purchased for resale | Call 800- 225-3750 or file at AmericanExpress .com/ onlineclaim within 30 days. You'll need to provide your card receipt, original store receipt, original manufacturer's warranty, service contract, a repair estimate and the defective item | Free |
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