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Product warranties and protection plans: What you need to know

Why most new tech doesn’t need extra warranties, argues tech expert Whitson Gordon — and when it does
People watching TV; a woman vacuuming; a woman holding an iPhone in the shape of a shield.
Should you opt for added coverage? A tech expert weighs in on what to know about protection plans.NBC News; Getty Images

The final month of each year, home to Black Friday sales and Cyber Monday deals, may be the season of cheap gadgets, but manufacturers and retailers are always aiming to squeeze a bit more money out of you. That’s why you’ll find an extended warranty at virtually every checkout counter, both in stores and online — and options for added coverage might seem like solid additions to your stable of gifts this year. But while protection plans have their benefits, they're rarely worth the extra cash.

Long term costs of extended warranties

Just about any gadget you buy comes with a standard manufacturer warranty — usually lasting about a year or so. Certain products, among them refurbished phones and laptops, may be limited to just 90 days of coverage. This usually covers manufacturer defects and other problems that may arise through no fault of your own. If you run into trouble, the manufacturer will repair or replace your device for free. After the warranty expires, you're on the hook for repair costs should something go wrong.

An extended warranty, as the name implies, extends that coverage in some way — but it’s often more complicated and nuanced than it seems. Some extended warranties may lengthen the duration of the manufacturer warranty to two or three years, while others may add extra protections to the existing warranty against accidental damage like drops and spills, which it wouldn’t have otherwise covered. So even if the standard warranty doesn't cover you cracking your phone after dropping it, the extended protection plan might.

Apple iPhone 12

Every iPhone comes with a one year warranty covering manufacturer defects. If you want enhanced coverage, though, you'll need to pay $150 extra for AppleCare+. That adds accidental damage to the list of protected scenarios, and allows you to use Apple's high quality in-store service for two years if you drop or break your phone. There's even an elevated, $220 plan that includes protection against theft and loss.

Samsung Galaxy S20 FE 5G Smartphone

While Apple products have the benefit of in-store service, other gadgets — like phones from Samsung — don't. For these, retailers offer third-party protection plans like the Asurion 2-year mobile protection plan that Amazon sells alongside many phones. It's similar in scope, but you may have to ship your phone into Asurion for repairs or get reimbursed for the job at a third-party local shop.

These plans may sound like good deals. After all, a typical screen repair on an iPhone 12 costs $279 from Apple without insurance — it’ll only cost $29 if you have the $150 AppleCare+ plan. So if you break your screen once in those two years, AppleCare+ instantly saves you money. As the above example highlights, warranties don’t always mean free or quick repairs. Rather, they often mean more affordable and easier repairs.

But look at it the opposite way, too: if you were to purchase AppleCare+ for every iPhone you buy, you'd need to break every iPhone at least once to come out ahead. I don't know about you, but I haven't broken every phone I've ever owned, so buying a protection plan every time would be a huge waste of money in the long term — for someone like me. That's why the experts at Consumer Reports, the Wall Street Journal and other organizations rarely recommend these plans. It's just highly unlikely that you're going to break every device you buy.

That said, I've known people clumsy enough for these plans to be worthwhile, though you still wouldn't want to buy them for every device you own — just the ones you're most likely to break. Mobile devices, like phones and laptops, are more at risk since they go out into the world with you. Meanwhile, a soundbar that sits in your living room is less likely to require the proverbial suit of armor. And, as always, you need to read the fine print before shelling out money on any plan (or anything). One warranty may cover all kinds of accidental damage while another product’s warranty — from the same retailer with the same warranty provider — only covers damage from power surges or electrical breakdowns.

Apple 10.2-inch iPad (8th Gen)

Walmart partners with the Allstate-owned SquareTrade for its protection plans. On certain devices — like this 8th-gen iPad — it offers a choice between Apple's own AppleCare+ and SquareTrade. Which you choose likely depends on whether you have an Apple Store nearby, as well as the specific terms of each plan and how they apply to your usage. And again, you'd also need to break your iPads pretty regularly for these plans to be worth the cost.

Dyson V11 Animal Cordless Stick Vacuum

Protection plans aren't limited to traditional gadgets, either. You'll also find them on home appliances like this highly-rated Dyson stick vacuum. Target's protection plan is also offered by SquareTrade, though it only protects against mechanical defects and "normal wear and tear" — not accidental damage like the SquareTrade plans offer for laptops, phones, and tablets.

Warranty alternatives: What to get instead of a protection plan

If it isn't clear, I don't think most people should buy these plans. But if you're still nervous about future accidents, consider this: Every time you're offered an extended warranty by a retailer, put that money in your own rainy day fund instead. When something does eventually break, you can pay out-of-pocket from that fund. The repair may cost more than it would had you grabbed the extra insurance, but you'll likely pay less in the long run than you would have if you bought protection plans on all your gadgets.

LG 65-Inch CX OLED 4K TV

There are rare exceptions to these guidelines, of course, and particularly on more expensive items with known downsides. OLED TVs, for example, can experience a burned-in image if you leave it on the same channel or video game all day, every day (not to pick on LG: This can happen to any OLED TV). Best Buy is well-regarded for its Geek Squad protection for OLEDs, protecting against burn-in when few other warranties do. Burn-in isn't as common a risk as some would have you believe, but it can happen. And Best Buy offers peace of mind if you need it on that $2,000+ purchase.

In addition, many credit cards — like the popular Chase Freedom Unlimited — extend the manufacturer's warranty by one year by default (as long as you buy your device with that card, of course). That doesn't get you coverage for accidental damage, but it does mean that if your new blender fails after a year-and-a-half — that is, after the manufacturer's warranty has likely expired — your credit card company may reimburse you for repair or replacement.

Finally, consider putting that extra money toward better quality tech that lasts longer in the first place. Laptops like the Lenovo ThinkPad T14 are not only more durable than some of their thinner cousins, but they allow you to replace the hard drive, RAM and other components should something go wrong, rather than forcing you to send it in for repairs or replace it entirely. With more durable, repairable gadgets, you won't need that pricey insurance as badly. Oh, and while we’re on the topic of preventative measures: Put a good phone case on that phone. It'll prevent your phone from breaking in the first place, and it's a lot cheaper than a protection plan you may never use.

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