Should you get an appliance protection plan?

Appliance Protection Plan

While my brother, Joe, was visiting us in our house for the first time a
couple of years ago, he was using the oven and noticed the slight
smell of gas.  We had bought the house about 6 months before and did
smell something once in a while but had not paid it too much attention
as it was very mild, sporadic and our range/oven worked quite well
despite being about 20 years old.   On Joe’s advice, we called the gas
company and they sent someone out to inspect our range, which was then
redtagged because of a gas leak!  (For those who have not had this
happen to them, the gas company will “redtag” a device meaning that
you should no longer be using it and they are not responsible if
something goes wrong from the use of the device, ie. A fire from a
leaky gas range.)

Now, when we bought our house, we opted to get an appliance protection plan for 1 year.  Though I had not heard of this before, this is
insurance that can cover the costs of repair or replacement if a mjor
appliance (refrigerator, range/oven, water heater, AC unit) were to
breakdown.  Generally, if you are buying a new appliance and planning
to take care of it, these plans are not worth it because most new
items will not breakdown in a year or two or even five years.  But our
house is an older house and the appliances were probably 15-20 years
old.  The cost of the protection plan was $400 and we weighed that
cost against the likelihood of a problem with the appliances and
decided to get it.

Unfortunately, it was not as easy to claim as we had hoped.  I called
the insurance company and they sent out a repairman who looked at the
range and said that he could repair it for $300.  My wife and I felt
that the range was really old and to be honest, we wanted to get a
better range so we asked the insurance company for a 2nd opinion
(which cost us $50).  The 2nd repairman came out and agreed with us,
saying that finding parts for such an old stove would be very
difficult and advised replacing the entire thing.  The company then
sent out a 3rd person to reevaluate and that person also agreed with
the 2nd so the insurance company finally paid us to replace the range.
They estimated the cost of the range to be $500 so they cut us a
check for that amount towards a new range.  This ordeal took almost 3
wks to happen and during that time we were reduced to microwave / BBQ
/ hot pot cooking which was rough because we cook at least 3 times a
week.  We finally found a range from Sears and got it delivered a week
later and was eventually able to get back to normal living.

All in all, it cost us $400 for the appliance protection and $50 for
the 2nd opinion and we got $500 from the insurance company so we did
come out $50 ahead.  Then again, if we hadn’t gotten the insurance, we
could have just put the $400 towards a new range and probably saved
ourselves a lot of headache with the multiple repairmen and claims.

Personally, I like the idea of insurance.  I like the security that
allows me to feel that if something goes wrong, I am going to be
covered.  But that security comes with a price and you have to
carefully weigh the risks of something going wrong vs. the cost of the
insurance itself.   For example, I rarely get trip insurance – it’s
not worth the cost, because I know that I’m going to on the trip no
matter what, even if there’s a delay or problem.  I do get the maximum
life and disability insurance through my job though because if
something were to happen to me or my wage earning ability, our family
would be dependent on that income to continue to live where we are in
California (= expensive!)  I think if I had to do it again, I probably
wouldn’t get the appliance insurance but, of course, that’s with the
20/20 hindsight.

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