When Extended Warranty Insurance is Worth the Cost

It has happened to all of us at one time or another, you dropped your cell phone in the toilet, or you missed your vacation flight because of illness. Both of these and many more situations have insurance to cover that. Nonessential insurance such as extended warranties is a booming business; however, are they worth the cost for the extra protection? Let's look at three common extended insurance plans and decide what is worth the cost and what is not.

Cell Phone Insurance

Most carriers charge about $5 a month as a premium for extended cell phone insurance coverage. That would seem to be cheap; however, the coverage is not good and could be pricey. Most of the carriers have a $100 deductible and exclude common accidents like cracked screens or water damage. Many times the replacements are refurbished cell phones and not brand new ones. Unless you are an owner of a very expensive smart phone or you lose your phone constantly, cell phone extended warranty insurance is probably not worth the cost.

Travel Insurance

One type of travel insurance that you should have is a policy that covers medical evacuations and any overseas medical costs not covered by your domestic health insurance. Cancellation insurance for a trip whether it is domestic or aboard is worth considering if the trip is a pricey one. If there is any chance that someone in your traveling party might get sick before the trip, cancellation insurance might be worth considering. However, you may not need to invest in travel insurance if the individual pieces such as airfare, hotels, or activities are refundable.

Extended Warranties

Many extended warranties are insurance policies that can add up to 20 percent on the cost of an item. Because electronics and appliances rarely need repair during the coverage time, they are rarely worth the price. Many times the cost of the warranty is about the same cost of what the repair cost would have been. An extended warranty might be worth the money for someone who cannot afford an item and cannot live without it.