Something For Everyone . . .

When we buy something expensive, we’d like it to last a long time.  We’re disappointed when it finally breaks or fails.

You might be able to get a free repair or replacement.  Not on everything that breaks, but you may be surprised.

There are a few methods I’ll tell you about.  First is lifetime guarantees that go unused.  The second is selectively using a Platinum or Gold credit card for purchases.  Cellphone contracts usually offer an insurance program. Everyone is offered an extended warranty on appliances and major consumer electronics purchases (but don’t buy the warranty — there’s a better way).  Don’t overlook your Homeowner’s Insurance Policy because it covers many things you don’t know about — but don’t call your agent to find out if you have a claim!  Last, but not least, are local ‘tech’ schools, where students may do repairs at no or low cost.

Many consumer goods have lifetime guarantees, but very few people exercise their right. When you buy something, check the tags and labels to see if it has a lifetime warranty. When you find one, make a mental note or start a list in a document on your computer.  Some are easy (go to the manufacturer’s website, fill out a form, then mail the item to them) and some are more difficult (they want the original receipt).  Some let you just return the item to the store. Tools, some electronics, household goods, some clothing — all kinds of things come with a lifetime warranty, but most people don’t pay any attention.  From now on, you will.

For example, all Targus brand laptop carrying cases will be replaced when they wear out — zippers fail, handles break, stuff happens. They can afford to do this because most people don’t take them up on it.

Sears Craftsman brand tools are not as super-strong as expensive professional tools, but they’re replaced at the store if they fail (don’t admit that you abused it, or they may balk).

Lots of other items work the same way.  If someone is throwing out something valuable, check the manufacturer’s website to see if it has a lifetime warranty.  Take the broken item off their hands and you can get a brand-new one.

A Platinum credit card could come in really handy.  Gold and Platinum level cards have “extras” in their agreement to encourage you to use them. As long as you use the right card for a purchase, you may get free travel insurance coverage, baggage insurance, rental car insurance, concierge services, airline points, or maybe they’ll replace lost, stolen, broken or defective items, etc. Some cards pay money back to you.  Call the phone number on your card and they’ll be glad to tell you about the free features you already have.  Any time you’d ordinarily write a check for a big-ticket item (vacations, furniture, college tuition, appliances) consider getting something for nothing; use the card, then write the check to pay off the card.  If you started that document I mentioned above to track your lifetime warranties, update it with the extras for each of your credit cards to keep track of which one to use for each kind of purchase.

Some cards extend the warranty (typically double it) up to an extra year.  Sometimes they’re far more gracious than the actual manufacturer.  Which brings me to a story . . .

My accountant bought a new laptop with his Platinum VISA.  Since he promptly paid it off, his total cost was the price of the laptop, nothing more.  But he got a warranty program that didn’t cost him a cent.  A few months later, he accidentally spilled water on his new laptop and it fried.  It was clearly his fault, and the manufacturer knew it, so they demanded $800 to replace the motherboard.  He contacted his credit card company.  They had him pay for the repair and send them the bill, and their insurance company sent him a check for $800.

Most cellphone contracts have an insurance program available, usually for $5 or $6 a month (that’s $60 to $72 a year) that covers ANYTHING that happens to your phone.  Do the math.  If your new phone costs $150 – $300, it may make sense for you.  If you only paid $40 or $50 for your phone, and could do that again, it’s hard to justify the insurance.  Don’t forget; maybe you got a big discount or rebates on an expensive phone, but you won’t get the same break if you need another phone before your contract expires.  If you’re hard on phones, tend to lose them (or drop them in the lake) or your dog likes to chew things, this could be a real money-saver for you.  I’ve met a few folks who have deliberately “lost” their slightly-malfunctioning, out-of-warranty phone just so they can get a new one rather than pay a repair bill, but, for ethical reasons, I cannot recommend that plan.

Most of these cellphone insurance plans must begin within 30 days of your purchase.  Also, if your phone is gone, you’ve probably lost your photos, contacts, phone numbers and addresses.  Some new (expensive) phones automatically back up your data to a server, then drop it into your new phone.  Some systems enable you to remotely delete the data on your old phone in case someone finds it or stole it.

Next are the extended warranty programs offered with appliance and electronics purchases.  This one is easy.

Truth be told, most things that are going to fail usually do so pretty soon after you buy them.  Items that wear out after the warranty, but sooner than you expected because of poor engineering or materials should be a tip that you’re buying the wrong brand.  For expensive purchases (like a car, appliances, tires, computer, etc.) do a little digging around on the internet to see if other people have an opinion about reliability on that model.

Manufacturers often issue a ‘silent recall’ that is announced only to their dealers.  If they can get you to pay for the repair, they’re OK with that.  If you let the dealer know that you’ve learned there’s a widespread problem with your item, you may get it fixed free, or at a dramatically reduced price.  I saved over $500 on an auto repair this way with about ten minutes research using Google.

Consumer electronics are widely available, and people shop around for the best price.  There’s not much opportunity for a seller to make much profit because there’s so much competition.  But their extended warranty plans are high-profit.  If your sales associate seems to press a little too hard to buy the warranty, it’s because his manager may have made it clear that if he doesn’t sell enough of them this week, he’ll miss his quota and be reprimanded or even fired.  So, what can you do?

First, politely decline the extended warranty.  Politely, since it wasn’t the salesman’s idea anyway, though he may or may not get a small commission for selling it.  If you wish, you can get under his skin a bit by asking, “Do you think this model really needs the extended warranty?  Maybe I should be looking at another brand, or check the brands at a different store.”  Sometimes a lower price is caused by superior efficiency, sometimes by cheaper components.  Again, a little Google research can give you some insight about other peoples’ experience with this model or brand.

Next, take the money you would have spent on the extended warranty (or 10% of the item’s price — your choice) and put that money in your bank account’s Vacation Club, or your sock drawer, or any other place you won’t filch it.  You now have your own extended warranty insurance program, and you get to keep all the profits.  If you do that each time you buy anything that offers an extended warranty, you’ll build up quite a war chest.  Use that money for repairs or replacements.

Nearly everyone has a Homeowner’s Insurance Policy or a Renter’s Policy.  Price varies widely, and so does coverage.  Most people think it only protects you if your house burns down.  But if you read your policy, or just ask your agent, you may discover that it covers thousands of items you never dreamed of.  The time to ask about coverage is before you buy. You may learn that for just a few dollars more, it can cover items in your car, a dinged car fender, and things that don’t even belong to you.  Excessive small claims are not a good idea, but big-ticket items may be covered.  Your policy might fix your laptop after you spill coffee on it, or pay the medical bills for a neighbor who hurts himself while working in your yard.  Call your agent to ask about existing coverage, but never discuss a specific issue unless you will file a claim — they keep a record of your inquiry that can cause you problems even if you don’t file a claim.

If you have accumulated some wealth, ask a few insurance agents about an Umbrella Policy — these are inexpensive policies that take over after your ordinary insurance program runs out of money, and cost far less than raising the limits on those other policies.  Wealthy people always have an umbrella policy, sold in 1 million-dollar increments.  For example, your auto coverage should take care of the medical bills if you hit a pedestrian.  But what if you accidentally cause many people to be injured?  Your auto policy can’t possibly cover all those medical bills, and they’ll just take your money if you have a lot of it.  You couldn’t afford to buy 2 million-dollar of coverage in an auto policy, but you can afford a 2 million-dollar umbrella policy that wouldn’t even be involved if your auto coverage took care of the entire claim.  Ditto for covering your valuable collection or art on your homeowner’s policy.  Or if the neighbor’s toddler drowns in your swimming pool.

There is one important caveat for Homeowner’s policies.  Many insurance companies now share their databases of claims and payoffs to limit fraudulent claims, and even a phone call to your agent to inquire about a potential claim.  But there’s one area where some people can really get hurt.  If you have water damage and place a claim, they’ll likely pay for the repairs.  But water damage sometimes causes mold. Mold damage can be extensive, and expensive to repair.  Mold may return over and over again, necessitating additional repairs.  Some insurance companies may raise your premium or even refuse to renew your policy after the initial repair, fearing additional expense later on.  You may be able to get another company to sell you a policy, but they’ll see you had a claim and charge high premiums.

The big problem may occur years later when you sell your home.

Your buyer will request a mortgage from a lender to buy your home.  The lender always insists that the buyer obtain a homeowner’s policy to protect against fire loss.  But the insurance company may access the databases and discover that you’ve had water damage, and decline to sell a policy to the new buyer.

No policy, no mortgage.

You might be forced to sell on a land contract or similar instead of getting cash at the sale.  This will prevent you from using that cash toward your next home.  Instead of weeks, it could take decades to get your money out, and that’s if all goes well.  This scenario doesn’t happen often, but it does happen.  If you’ve got a small claim for water damage, you may be better off not involving your homeowner’s insurance company, or even calling your agent.

As a last resort, local technical schools might be able to help you.  Technical schools and colleges can tell you on the phone if they’re interested in repairing your stuff.  Also, many local K-12 school districts cooperate to pool resources for technical training.  For example, one high school might have a well-equipped metal shop, another nearby district will have a high school with a substantial auto repair facility, and a third may have a full-blown electronics repair lab. The districts realize that it makes more sense to share their students than to build lesser versions themselves, so they shuttle tech students to the next district for part of the day for specialized training. Sometimes a rural county will house multiple technical disciplines in a single building and all the local school districts send their tech students to that building. A quick phone call to any local high-school counselor will uncover what facilities are near you. If you have a non-working item, you may be able to get it repaired at low or no cost, and help a student get some real-world training at the same time. For example, a computer repair lab can add a new hard drive to your desktop (or perhaps fix your old one) and take a look at your broken microwave oven at the same time. That non-working CD player you were going to throw out is a valuable resource to a student.

While students will do the work, they’ll be under the supervision of a qualified instructor. They usually have a vast array of tools and reference sources. If they tell you your repair is out of their league, you’re no worse off than you were before. Need a muffler for your car, or some dents removed? Kitchen appliance on the fritz? Printer that just doesn’t work right? Call that counselor and find out what you have waiting for you. You’ve already paid for the facility with your tax dollars, and students benefit from the variety you can bring to them. Getting your repair for a song is just icing on the cake.

Tell your friends.

Charlie Gosh

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Learn a simple trick to take advantage of the next recession . . .  http://www.charliegosh.com/?p=97