Warranties–Protection or Scam?

Mom’s timing is impeccable.  Once again she called while I was on the throne this morning.  I rushed to answer the phone, and she had a question for me.  She prefaced it by saying that she tried asking her sister and brother-in-law (who live across the street from her), but “they’re too old to give her any kind of answer…,” which I know in Mom-speak means that they disagreed with her first impulse and now she’s shopping around for someone to give her the answer she wants to hear.

First of all, let me say that mom is very gullible.  She still thinks Bill Clinton is a saint and she truly believed OJ Simpson was innocent.  If something doesn’t jibe with her gut feeling, she ignores the evidence no matter how solid the proof.  However, she takes as gospel truth anything she hears on TV or radio if it reinforces her initial beliefs.  Today, she wanted to know if she should pay $39/yr. to some company that promised to pay for any unexpected repair to her water line.  They claim that any water line from the street to your house is your property and as such any repairs to this would be your responsibility.  This warranty could save you up to $2000 in repairs.

I told her how I feel about warranties.  Although I believe people should manage their risks by carrying homeowners or renters insurance, and provide for their families with term life insurance and even disability insurance, I’m not a big fan of warranties.  More often than not, they are loaded with fine print exclusions so that many things that you think are covered actually are not.  And even when something is covered, they make it awfully inconvenient to collect.  A co-worker had to wait a week for an authorized repair person to fix her only refrigerator under her warranty service.  Even if this particular company is legitimate, I told mom that it probably isn’t likely that her line is going to spring a leak.  Her house isn’t that old.  But she kept saying, “It’s only $39.”  I wanted to say that if $39 was so expendable to her on her fixed income, then send it to me and I’ll put it towards the kids’ college funds, but I held my tongue and said that I would personally throw the thing in the trash and live with the risk.

1 Response to “Warranties–Protection or Scam?”

  1. 1 Emily August 26, 2008 at 10:00 pm

    I go back and forth and =, hence, own warranties on some things but not others. This is probably a bad policy — it probably makes more sense to always get them or never.

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August 2008

Pittsburgh Bloggers

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