Money Saving Mondays: Electronic-Device Warranties

You can't predict the odds you'll need to replace a broken or stolen smartphone or tablet -- but you can be a smarter shopper

Is buying a warranty to protect your new smartphone or tablet a smart deal, or a waste of money?

A lot depends, of course, on something you won't be able to predict: The odds you ever have to replace a stolen or broken device, and how relieved you'll be to have spent $80 or $120 a year to cover, in advance, much of the replacement cost of a $500 or $600 cost of a new device.

But if you've recently bought a new device and turned down the pitch for a protection plan, you've got a lot of company. Clarence Bethea, CEO of Upsie, a Minneapolis startup that sells device warranties through a smartphone app marketplace, said studies show 70 percent of U.S. consumers don't buy one, "because they're confusing, and they're expensive.''

Bethea said one of the most important things for consumers to know is that, with big-name device makers, you normally can wait until up to 30 to 90 days after you've bought a device to buy a warranty, giving you time to shop around and feel confident about turning down a high-pressure in-store sales pitch to get one.

With most reputable manufacturers, you should be automatically covered for up to 12 months for an inherent mechanical failure, such as the device just ceasing to work without you having done anything -- like dropping it on the floor or into a sink -- to damage it.

Depending on what charge card you used to buy it, you may have gotten through the card company automatic extended protection.

The major wireless carriers sell protection plans that typically run $7 to $10 a month, with a deductible that makes you responsible for the first $100 or $200 of the cost of replacing a device.

Bethea is in the business of selling warranties to people, so as you would expect, he agrees that "it's a really good idea to buy a warranty when you buy things that you may be carrying around, such as smartphones tablets or laptops.'' But he stresses that you need to be a smart and discerning consumer, and ask the right questions about what protection you're really getting for your money.

"You want to ask the question replacement? What does my replacement cover? Does it cover a new or refurbished product?'' -- basically, a used device that's been cleaned and buffed up and scrubbed of old data. Know who the company is that actually provides the insurance for the retailer or wireless carrier you're buying it through. "Who is behind it? How financially strong are they? Who do they work with to get their devices repaired? And lastly, cancellation -- can I cancel, and when can I cancel?'' Bethea said.

Making scans and photos of all the paperwork associated with fulfilling warranty protection is important, including your sales receipt and proof of purchase and any other paperwork.

Upsie sells device protection for as much as 50 to 90 percent less than wireless carriers or stores, largely because it shops around among multiple product insurance carriers to find prices consumers will like and will be willing to pay, rather than pushing overpriced sole-source insurance at the cash register as a profit-fattener, as many consumers who've turned down that coverage have come to suspect.

"The best warranty plans that we are seeing out there are the ones that offer you transparency., not just on terms and conditions, but also on price,'' Bethea said. "They also let you know, who's the carrier'' so you can judge that provider's reputation, financial strength, and track record with consumers.

With video editor Lauren Kleciak and assisting videographer John J. Hammann

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