What is “third party” coverage?Third party warranty or service coverage is just like the warranty or service contract coverage buyers are accustomed to receiving with “normal” retail purchases, except for two important details:
- You pay extra for the warranty or service contract. This isn’t nearly as bad as it seems. For example, coverage for a typical mobile phone, computer system, or other electronic appliance typically costs between $15 and $50, just a fraction of the purchase cost of a replacement.
- The coverage is provided by a third party. If something goes wrong with your purchase, you don’t return it to the seller or to the manufacturer. Instead, you contact the third-party provider from whom you bought the warranty, and they provide you with instructions for fulfillment. Generally this involves shipping the item to the warranty provider, who will repair it, replace it, or reimburse you for the cost of the item, usually at their discretion.
Does third-party protection really work?In a word, yes. However, as with all online purchases, it’s important to ensure that the warranty or service contract you purchase is from a reputable business with a long history of successful fulfillment for their customers. There are indeed a large number of “scam” warranty companies out there that sell worthless contracts; if you buy from one of these and something goes wrong, you’ll often find the provider either dragging their feet for months to help you or citing a “loophole” of some kind in the contract that indicates you’re no longer covered.
What major companies should I consider?Happily, sound, well-regarded coverage is available for most of the common types of items for which you’re likely to want additional protection. All of the companies below will cover items purchased on eBay, including refurbished and in some cases used items, and are reputable companies with many years of service to generally satisfied customers. You can buy online at the following links:
- SquareTrade (computers, consumer electronics, photo) is probably the best known provider of extended warranties on eBay. Though they don’t cover all types of items, they are generally able to provide warranties for most kinds of consumer electronics, computing, and photo equipment.
- Mack Camera and Video Service (computers, consumer electronics, photo) is another highly-regarded provider of coverage for consumer electronics, computing, and photo equipment that covers a number of types of items (camera lenses and non-electronic cameras, for example) that SquareTrade doesn’t.
- GE Warranty Service Contracts (household and major appliances) is the undisputed leader in providing third-party warranty contracts direct to consumers for most major home appliances. The item that you buy need not be made by GE in order to qualify.
- Warranty Direct (cars, trucks, other vehicles) is the most popular provider of extended coverage for automobiles and other vehicles, has been in business for decades, and offers wear and tear coverage that is more comprehensive that the coverage provided by most car dealers, even for new vehicles.
- Carchex (cars, trucks, other vehicles) isn’t a warranty or service contract provider itself, but acts as a broker for a number of reputable providers offering a variety of automotive warranty and service plans.
What companies should I avoid?The list of extended warranty and service contract providers to avoid is too long to be included here and changes every day as fly-by-night companies come and go, but there are some immediate red flags to watch out for:
- Hidden contracts. Any reputable warranty or service contract provider will be willing to display online or fax you their complete contract before you buy. Beware of any company without an easily accessible telephone number or that refuses, when you call it, to offer you contract details in writing or to show you where to find such contract details on their website. Many “bad news” providers demand that you buy the contract first and will show you the coverage only afterward.
- Missing fulfillment information. Remember that you're paying this company to help you if something goes wrong. If you're unable to see how to claim service simply by visiting their website, you may have trouble figuring out how to do so once you need them. You want someone easy to contact, not someone who doesn't want to hear from customers.
- Unreasonable claims. Any service contract or warranty provider that is reputable will require some amount of paperwork and negotiation for fulfillment.bBecause they do actually pay out for claims, good companies want to be sure your claims are valid and documented before providing fulfillment. Beware of companies that purport to offer no-questions-asked, immediate, documentation-free replacements or refunds, since it’s likely that you won’t get them.
- Overlong or overbroad coverage. Beware of companies that offer “one size fits all” plans based purely on price, regardless of the type of item in question, or that claim to guarantee any kind of purchase at all, no mater what it happens to be. Beware, too, of companies that claim to offer unlimited “lifetime” coverage with no time limits.
How should I claim benefits?When seeking fulfillment, don’t simply ship the item immediately to the company in question if something goes wrong. Also, don’t get the item repaired or replaced locally or on your own and then expect to be reimbursed.
Call your provider for instructions on how to handle repair or replacement in a way that is covered by the plan you’ve bought. This may involve authorization numbers, shipment to particular addresses, or providing various kinds of documentation. Always remember to keep all of your receipts, both for the purchase of the item and for any subsequent repair or replacement, since you may need to provide them for future service.