- First Name
- Sherman
- Joined
- Dec 1, 2021
- Threads
- 29
- Messages
- 1,813
- Reaction score
- 1,848
- Location
- MIDDLETOWN, MD
- Vehicle(s)
- '22 Badlands ordered 12/17/2021 - Arrived 3/25/22
Buying an extended warranty -- or any insurance -- is 'betting against the house, and the house always wins.
Sure, there will be a few people who make out -- receive more in claims coverage than they paid in -- and many of them will tell anyone who will listen what a great deal that particular insurance or extended warranty is.
Of course, for every 'winner' there are multiple 'losers' -- there must be, for the underwriter to stay in business. Few people want to talk about how they paid hundreds or thousands of dollars and got nothing/little in return. So we generally don't hear those negative stories. That gives the false impression that an extended warranty is a "great deal" -- especially if the vehicle is known to be trouble-prone. "How can I lose?"
Needless to say, the underwriter has all of the data/info/stats. They know, on average, how much they will have to pay out per house/vehicle/etc. They add a hefty amount on to that figure -- enough that they are covered and they can pay the seller a large commission. I recall reading that retailers like Best Buy actually make more $$ from selling extended warranties than they do from selling the products!
In most cases, people should be 'self insured' for the manageable risks.
That said, there are at least 3 reasons to buy insurance:
1) Coverage for events that would be a financial disaster -- life; health; home; auto. In some cases, auto repairs fall into this category.
2) Special/unique circumstances unknown to the underwriter -- rough local roads, lots of towing in the mountains at full GCWR; exclusively urban driving, etc. Those people at least have a better chance of being 'winners' (or not losing so much).
3) Piece of mind. If a person is literally going to lose sleep over a potential expense, then they might want to get some coverage -- knowing that the chances are very high that they may not use it, and that with the typical exclusions and deductibles, even if they do file a claim(s) they may not get their money back.
Sure, there will be a few people who make out -- receive more in claims coverage than they paid in -- and many of them will tell anyone who will listen what a great deal that particular insurance or extended warranty is.
Of course, for every 'winner' there are multiple 'losers' -- there must be, for the underwriter to stay in business. Few people want to talk about how they paid hundreds or thousands of dollars and got nothing/little in return. So we generally don't hear those negative stories. That gives the false impression that an extended warranty is a "great deal" -- especially if the vehicle is known to be trouble-prone. "How can I lose?"
Needless to say, the underwriter has all of the data/info/stats. They know, on average, how much they will have to pay out per house/vehicle/etc. They add a hefty amount on to that figure -- enough that they are covered and they can pay the seller a large commission. I recall reading that retailers like Best Buy actually make more $$ from selling extended warranties than they do from selling the products!
In most cases, people should be 'self insured' for the manageable risks.
That said, there are at least 3 reasons to buy insurance:
1) Coverage for events that would be a financial disaster -- life; health; home; auto. In some cases, auto repairs fall into this category.
2) Special/unique circumstances unknown to the underwriter -- rough local roads, lots of towing in the mountains at full GCWR; exclusively urban driving, etc. Those people at least have a better chance of being 'winners' (or not losing so much).
3) Piece of mind. If a person is literally going to lose sleep over a potential expense, then they might want to get some coverage -- knowing that the chances are very high that they may not use it, and that with the typical exclusions and deductibles, even if they do file a claim(s) they may not get their money back.
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