in a forum, nobody ever recommends extended warranty coverages. It's insurance that is stacked against you. It produces high profit. Perhaps GW should be selling this instead of ads.

If you have the money and want to buy, you may do so, and without anyone influencing you in this forum. In previous discussions, no matter how strong the arguments were made (not to get it), people still went ahead with buying extended. Nothing will deter those who want to buy. Money is made to be spent. You and your money are made to be parted.

Hth

Last September we purchased an appliance package almost identical to yours. A Bluestar 36" RNB, a Samsung CD/FD fridge and a KA dish washer.
Since the Bluestar has almost no electronics we decided to forgo the extended warranty.
We also decided that if the KA was going to fail it would do so within the 1st year in which case it would be covered.
Having read many reviews regarding fridge units with ice and water through the door, and having discovered that they are the cause of most fridge problems, we decided that for the Samsung we would purchase the extended warranty. So far we haven't needed it but it's only been 9 months. Hopefully we will have wasted our $180.

No for each and all.

I am buying a new dishwasher and am considering an extended warranty, since they seem to be most prone to issues. I'm ordering online, though, so not sure where to get a policy. If it is like every other appliance, they will probably offer me one when the manufacturer's warranty ends, so I can consider it then.

I know everyone says they are a waste of money. However, I have bought extended warranties for some of my appliances and have used them. I have also not bought the warranties on other items and sure enough the darn thing stops working 10 days after my standard 1 year warranty is up. The repairs cost me double what the extended warranty would have cost. I think on some of the more expensive items that could have costly repair charges it might be a smart move if you can afford it. Just my two cents.

kstuy - no one is saying they don't work on an limited basis. They also have value (intrinsic) for the worry wart crowd.

what the smart money does say, is that over the long haul and a broad sample - they are a waste of money.

Many have exclusions that limit their effectiveness or "service/visit" charges and rigid service providers that handcuff the purchaser.

Look - if the majority or even a large percentage of covered appliances crapped out and needed service or replacement in excess of the few hundred $$$ the policies cost (within the warranty period) the underwriters would go belly up so fast the news would be flooded with stories.

Do they work for some people - yep.

Are they a wise financial move - not for most people over the long haul.

Pretty much by definition, for most people over the long haul, the insurance policy isn't a good idea because the insurance company has set the price so that it isn't. That is, they've set the price so that they win: they're a business and they're making money. They have a massive team of actuaries figuring out where to set that line so that they do make money.

You and I are not "most people" and we don't really care about the long haul. We care about the specifics of our own personal risk.

So, for example, in general I choose to pass on these warranties. For me, an exception has been buying an extended warranty on a floor model. And I just called it in for what seems to have been some kids' prank, perhaps, in tossing a rusty screw into the works? Hard to say where the screw came from. But I got my money's worth, almost back already.

Other forms of value come, for some, simply from peace of mind. That can be commoditized: if you're the sort of person who will really sweat the risk, and you also have extra change, then you should definitely buy a policy. As David says, that's what money's made for; why should peace of mind be any different of a commodity than, say, a towel dispenser?

Trying to figure out where you will fall on the long-term actuary line of win:lose, is scrutinizing an unknowable unknown. No one knows the future; insurance companies can predict it for themselves, in the long haul, pretty well, usually. You cannot do so for yourself; trying to do so could drive you crazy right there. However, you could repackage the question in other terms, say in terms of what the policy *will* buy you.

If you are buying an average appliance with an average chance of misfortune, then probably there's no compelling reason to buy the policy and your best guess is that you will lose the insurance game. If you happen to have some special knowledge, say that the machine is a floor model, for example, or that, say, your water pressure is especially high, or some other risk-changing piece of knowledge that skews the odds toward the direction of your having an increased likelihood of something bad happening than usual, then you should buy (presuming you have the change handy).

That's the best you can do. IMHO.

p.s. In assessing your chance of "losing the bet", it's a departure from normal for the given appliance that matters. Um, I think ... guess that depends how the insurance companies write those policies ... are they writing them in an model-specific way or just appliance-type-specific? That is, is the cost the same for, say, "all refrigerators" or does it vary between, say, a Samsung FD fridge and a Kenmore FD fridge? You should try to find that out in order to figure out whether your risks departs from the average set for whatever they're setting it at.

That's how you can use their army of actuaries against them. Assume that the cost of the policy is for through-door water dispensing FD fridges only. Then the fact that you're buying this comparatively risky type of appliance isn't going to be mitigated by buying the policy. However, if the policy quoted you is for all fridges, and you happen to know you particular fridge tends to have repair problems, then it could be that you're falling on the win side of the insurance actuarial line...

I bet I'm being too confusing. Sorry... good luck. :) (and that's what this is: it's about luck. It's a bet).

Following the exact same thought process as willtv, we also bought an extended warranty on just our Samsung fridge. My wife is a worry wart.

Kind of off topic, but I wish all problems could turn out like the recent failure of our three year old Sony 46" XBR4 LCD TV. We did not buy an extended warranty with it, but I was lucky in finding through a web search that this model had a high rate of LCD panel failures, and Sony had taken resposibility and had extended the original one year warranty to five years on the LCD panel. They replaced the complete LCD panel/backlight module, saving us a $2,000 repair. I guess I'm lucky we bought a lemon??? It's all good now.

To refine what aliris19 said, remember that insurance is most efficient for all parties when it covers catastrophes. It is not efficient when it covers petty stuff.

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.

Definitely buy it on the Samsung refrigerator. Any appliance from Korea, buy it.

Something else to consider: If you have the surplus cash now but may not in 2 or 3 or 4 years for an expensive service call, buy it. This is the most strategic use of a warranty/insurance plan an IMHO, the only time its a value.

Otherwise they are the legal equivalent of a Ponzi scheme/poker bet hybrid

"Definitely buy it on the Samsung refrigerator. Any appliance from Korea, buy it. "

This makes no sense to me.

Why not buy something that is made better (higher quality) in the first place?

"Something else to consider: If you have the surplus cash now but may not in 2 or 3 or 4 years for an expensive service call, buy it. This is the most strategic use of a warranty/insurance plan an IMHO, the only time its a value."

Everyone has an opinion, but I think this is excellent advice in some cases. I am self-employed and subject to peaks and valleys in my income. In January 2010 I was at a peak and replaced four appliances with top of the line SS models. One circuit board cost more than the price of an extended three year warranty purchased from the manufacturer and it gives me great peace of mind. Now, months later, I am in a valley. If I had to cough up $300 for a repair it would be a hardship. It was easy to spend the money 18 months ago and at least I know that if something goes wrong now I can get it repaired without worrying about where the money will come from. Plus it is transferrable so if I sell the house within the time period it is in force it will be a selling point for me.

So, to each his own.

Warrantee documents are good things to buy. If you want to spend, this is a good place to spend. As good a thing as anything other thing you can image buying. Also, personal insurances of all kinds. Good to own.

If having to cough up $300 for a repair would be a hardship at some point in your life, don't buy any large appliance.

You can also take the money you would have spent on all the extended warranties and put them in a bank account that you use for repairs if and when you need it.

"You can also take the money you would have spent on all the extended warranties and put them in a bank account that you use for repairs if and when you need it."

Wow, pay yourself first. What a novel concept.

I guess for those that have a few bucks today but won't in a year or two because they are undisciplined enough to find a bank and deposit the money in a separate rainy day account and not spend it.............then yes; I'll concede the point that they are a decent product.

you can get an extended warranty well after you have purchased the units if you still want it. when i called up kitchenaid to get water filters for my fridge 2 years later, the manufacturer offered me an extended warranty directly. i elected not to get it since i never used the original warranty in the first place (not to say that my fridge works all that well, but the glitches in it are livable). also, i discovered the warranties are somewhat tricky, like covering certain parts only, not covering labor, etc. so definitely read the fine print if you decide to purchase one.