Protection plans for electronic devices -- are they worth it?

Photo (c) spaxiax - Fotolia

There are many ways consumers can cover their devices, but finding the right one is essential

One of the immutable truths surrounding electronic devices is that their importance is only eclipsed by how much they cost, so protecting your gadgets from damage or theft is generally a top priority.

While certain protection policies through your mobile carrier might cover your phone if it is lost or stolen, consumers might be less knowledgeable about what kind of coverage exists for their other electronic gadgets and devices – like laptops, televisions, or tablets.

Different types of warranties and policies can cover these items under certain circumstances, and some consumers may feel more secure with taking out additional coverage on big ticket items. Below we’ll run through some of the coverage options and whether they’re worth investing in.

Home insurance policies

If a retailer's warranty doesn’t bring the peace of mind you’re looking for, the first place you might want to check for device coverage is in your home insurance policy. The important thing to keep in mind here is to know exactly what your policy covers and what it does not.

Insurance provider NetQuote discusses a couple of scenarios where policies are sometimes limited.

  • In the case of a natural disaster or weather event, like a lightning strike, your policy may not cover the damage if the power surge damages the circuits of plugged-in devices.
  • Your policy may only cover electronics up to a certain dollar amount, so if your expensive PC build (or even several of your devices) are damaged or stolen, they may not all be covered.
  • Some policies exclude certain pieces of computer equipment or electronic devices, so be sure to check which of your devices are included.
  • Electronic devices may depreciate in value over time and most policies only cover gadgets based on their market value, so there may not be enough compensation provided to buy newer models of the same device.
  • Many homeowner’s and renter’s insurance policies do not cover technical malfunctions, so if a device just stops working out of the blue then you may be left without coverage.

Specialty insurance

If your home insurance policy has too many gaps and you’re not satisfied with retailer warranties, you might want to consider specialty insurance provided by a third party. Offers from these companies can often be less expensive than retailer warranties, but just as with any service you’ll need to shop around to find the deal that’s right for you. A few options include:

iConnectProtectenables consumers to cover all of their electronic devices under one plan. The service covers a wide range of gadgets and devices from mechanical and electrical breakdown, as well as accidental damage. Claims are handled by the company repairing, replacing, or reimbursing consumers for the value of their device, with customers paying a monthly fee. 

Consumer Priority Service (CPS)began as an electronics repair center in 1990, but has grown to become an international extended warranty service company that covers both electronic devices and appliances. The company offers a variety of service plans for consumers to choose from, including extended, in-home extended, Date of Purchase, Accidental Damage, and OEM Parts and Labor. Consumers can purchase a CPS warranty through a participating retailer or internet affiliate, such as Sam’s Club or eBay, and coverage is transferrable if you sell or give your device away for a $25 fee.

ProtectionPlaceis an online platform where consumers can buy coverage for a range of big-ticket and portable electronic devices. Most of its policies cover devices for 2-5 years, and consumers can get instant price quotes by inputting their device, purchase price, and preferred coverage on the company’s site. The service covers mechanical and electrical breakdown and power surge protection, but consumers can add accidental damage protection to some plans by paying a small fee. The company also covers all shipping and return costs for sending a customer’s device to one of its authorized repair facilities.  

Is it worth it?

Although all these options are out there for the taking, deciding whether to get additional coverage for your electronic devices depends on several factors, including your financial condition, how necessary the items are, and their value.

For example, if you depend on these electronic devices to run your business or function in your job, then covering them may be a good idea since you’ll want to repair or replace them as quickly as possible to minimize any downtime. However, if the devices aren’t used that often or aren’t likely to be damaged, then passing on additional coverage may save you money in the long run.

The last thing you might consider is whether the cost of the coverage is more or less than the price of repairing or replacing the device yourself. Always be sure to read any warranty or insurance policies carefully so that you don’t end up kicking yourself later over lost money.

Learn more in the ConsumerAffairs Electronics Extended Warranties Buyers Guide.

Take an Identity Theft Quiz. Get matched with an Authorized Partner.