Insurance is for catastrophes. High cost events Unlikely events Events that are beyond your control These conditions make it worthwhile for both the insurer and the buyer. Both parties are in a win-win situation. It does not create a win-win for either party when coverage is broadened to include smaller costs. Appliances and their repair are not high cost, compared to a catastrophe. Repair is not high cost, compared to a catastrophe. An extended warranty is an expense. You choose to pay it in advance. Talk about easy! You remunerate strangers who aren't there when repairs need fixing, and who've kept your money as sales commissions and administration fees. Talk about being easy! Psychologically, if you have extended warrantees you are willing to face life's most minor challenges, like rearranging the deck chairs on the Titanic while it scrapes the iceberg. Why sweat the penny stuff? Paying for any insurance = paying someone to pay you = exchange of money for money = make it subject to unlikely, high-cost situations = catastrophe. If you have lifelong coverage on your ability to earn, you are willing to face bigger challenges. Choose where you exchange your money. Hiring a butler is an expense, not insurance. Maintenance and repair is an expense. Manage your own repairs. Manage your own expenses. Manage your own repair expenses. Don't act "I can afford it" and "I'd rather have the peace of mind." Or, do the opposite and let them have your money now. Why not now? "It sounds good; it makes sense," you may believe Think about the bigger things that can hurt you. Instead. It hurts. Just to think about what can hurt, is painful. Isn't it? Then, call the insurers who already know you, and improve the features in your coverage shielding you from more significant events. Now which kind of peace of mind do you want? The kind that tells you someone will be available to do small things for you? The kind that tells you someone will be available to do big things for you?

Maybe, depending on price and you? Product failure is not likely, but not freakishly unlikely. Cost of repairs might be pretty significant for many middle-class folks, but hardly catastrophic. How do you feel about risk? There's an objective bit and a subjective bit. The objective bit has to do with the expected value of any given insurance policy. What's your expected harm on appliance A, B, or C? That's a function of the likelihood of damage times the cost of the damage (get a little fancier and we can talk about this over a period of time and discount the value of future harm). An insurer probably has pretty good information on the expected damages, or risk, involved. Not perfect. Evidence specific to the latest version of the RNB is limited, so they're going by information on proxies -- similar products -- but they've probably got a pretty good sense of this. The subjective bit has to do with the question whether, and to what extent, you are risk-averse, risk-neutral, or risk-preferred. The insurer should be pretty close to risk neutral. It's not one human individual but a large (we hope) corporate entity, that's well capitalized (we hope) and does not (housing issues or paper aside) have all their eggs in one basket. They cover many, many people and many, many possible events and being wrong about any particular event shouldn't matter (unless it's really huge), because over many, many events actual outcomes tend to get closer and closer to average ones (that's the law of large numbers -- the variance shrinks as the "n" goes up). That doesn't mean that they price the insurance policy right at the expected value -- they've got people to pay, investments to make, margins to protect, etc. A private individual might be more risk-averse for several reasons. One is one's own psychology. One has to do with the relationship between one's psychology and a given magnitude of potential loss (how awful would it be if you got the short end of the statistical stick). And one has to do with the fact that, if it's just you, the variance is way different than if it's an insurance company. Flip a fair coin 20,000 times and you'll come pretty darn close to 10,000 vs. 10,000. Flip it twice and who knows? HT,HH, TT, or TH? Generic warnings -- across people -- against insurance make the most sense to me with relatively inexpensive products. Electronics that middle-class people purchase at a big box store for 10s of dollars or a few hundred. For many such products, with few moving parts, the failure rate is very low. You can self-insure not because you know where you'll fall on the curve, but because you're deviating from a curve that's not very scary to begin with. You've got a relatively low chance of a bad outcome, and relatively low cost if a bad outcome occurs. And on the commercial insurance end . . . the transaction costs themselves may be significant if you're covering small, but not terribly unlikely, events -- so they end up being a bigger chunk of the question, each tie the risk neutral insurer asks "what costs do we need to cover"? (and then that gets marked up, more than once, etc.) For a nice electronic table radio, you might end up paying 30 bucks (objectively, real money) to cover 10 bucks worth of risk (objectively, expected harm), and why would you do that for each of 10 products if you could, in fact, afford to replace one of them should it fail? A car, a boat, a plane? Maybe you see it differently. 5 or 10 K in kitchen appliances? Leaving aside questions of the reliability of a given insurer or insurance product, I have no obvious answer to offer. CS surveys seem to indicate product failures ranging from about 5% to closer to 20% on dishwashers, maybe 6 or 7% to closer to 20% on various ranges, etc. Way under 50/50, but non-trivial. Then there's the cost of the policy and the cost of repair or replacement. Personally, I've not bought extra coverage for my RNB or DW or fridge, but I could see myself doing so, depending on the particulars.

I bought a five year extended warranty for my LG stackable, washer and dryer. I always buy extended warranties and actually recently realize that I only purchased one warranty which ended up being covered only on the washer because I used it for the washer first. I had a water leak and when they came out to pull it out and see why it was leaking it was the hose and I was told that my warranty doesn’t cover the hose. I ended up having to pay $200 to have them replace the hose because I cannot pull the stackable washer and dryer away from the wall myself, when they came out to do the work, I also discovered that my dryer, which was a steam dryer had never been hooked up. However, I did purchase all the parts to hook up to steam dryer. I always wondered why there was never seem to be moisture in the dryer, but I just figured that was the way it was supposed to be, so long story short after contacting everybody under the sun because they sent me all over the place. I was told that since it’s been two years, they would not warrant the fact that the delivery and the installation team did not hook up my steam on my dryer and that I was responsible for that. So they have finally offered me $250 gift certificate. I have not been able to use the steam which I thought I was using for two years and now I have to try to find someone that can pull the washer and dryer out to hook up the water and the hose for the steam dryer, since my gift card only covers products purchased at Home Depot. I have to come up with the cash to hire someone to do the work. I have always bought my appliances at Home Depot and I have always bought warrantees at Home Depot but from this day forward I will never purchase any appliance from Home Depot. This was very disappointing.

I believe silken1 is mistaken in saying that consumer reports Now supports them. They still say that they are a bad call. However, this assumes that you have a little back up cash in the case a repair is needed. The point is that if you at least theoretically put the extended warranty charges in an emergency fund, you would come out ahead or way ahead. Even if something broke, the other items probably wouldn't, and of course, you are paying for all of them. I did buy one from Sears once on a pop up vent and a double wall oven. I had heard that the vent sometimes had issues, and was concerned about the oven because it is essentially two units in one. The vent never had issues, but I usually don't use it. Since I had the warranty, I actually called people out twice. The first time was because I didn't trust the oven temps. They really didn't do anything and didn't find anything wrong (slightly good for piece of mind), but left me where I started. I also called them because the warning chime suddenly sounded like the device was jammed up or something and the tone was more like a wheese. It turned out that I had accidently set the tone to 'soft' while wiping the touch screen down and the 'soft' tone in my KA oven is pitiful. I had called KitchenAid, and they didn't know what the problem was. I suspect that if I hadn't had the warranty, I would have found the problem by calling KA again, or from the manual, or online. However, what I learned from using the warranty was that I was captive to the Sears (can't think of the two letter name of the repair co.) repair group. They certainly weren't fast and I would have been in a fix had they really been needed. There have been many threads here about their poor service. I think the critical point is that by using your own 'saved' cash, you can call the best or fastest people for repair.