Do Your Homework Before Buying Extended Warranties

NEW YORK, NY (11/19/2010)(readMedia)-- Before you're in a checkout line and asked if you want to buy an extended warranty for that flat screen TV you're getting this holiday season, it's a good idea to do your homework first.

"Consumers buying electronics and other expensive items are often offered extended warranties. Whether it makes sense to buy an extended warranty is something only the individual consumer can decide. However, all consumers should understand how extended warranties work," Insurance Superintendent James Wrynn said.

A warranty is essentially a promise that a manufacturer will repair or replace an item, or refund its purchase price, if the item doesn't work or if a defect in workmanship adversely affects its performance. There is no additional cost for a warranty.

An extended warranty kicks in after a manufacturer's warranty expires. Unlike the manufacturer's original warranty, an extended warranty isn't free. It's an option a consumer may buy separately or decline to buy.

Protection available under an extended warranty typically covers the cost of repairing or replacing an item if it fails because of a defect in materials or workmanship over a specified period of time. Some extended warranties will even cover breakdowns due to wear and tear.

"Extended warranties are service contracts which come under the jurisdiction of the Insurance Department. As a result, consumer protections are in place when people buy extended warranties," Wrynn said.

Under New York law, a consumer can return an extended warranty for a refund, within specific time limits, if the consumer has second thoughts. An extended warranty can be returned within 10 days after the purchase date if it was bought in person or within 20 days after the date of mailing.

Also, a consumer is permitted to a file complaint with the Insurance Department if the entity selling the extended warranty fails to live up to its agreement. In this type of situation, the Department will investigate the complaint and assist the consumer to obtain a settlement if appropriate.

Consumers shouldn't confuse extended warranties with insurance because insurance is a different type of protection. However, insurance can come into play. For example, a consumer's homeowners or renter's insurance may cover the cost of replacing an item that is lost as the result of theft or damage to a home that leads to a claim.

Additional information is available on the Insurance Department's website, www.ins.state.ny.us. Consumers needing additional help should feel free to contact the Department's Consumer Services Bureau between 9 a.m. and 5 p.m., Monday through Friday toll-free at 800-342-3736.

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