{"id":1835,"date":"2020-08-10T09:38:00","date_gmt":"2020-08-10T16:38:00","guid":{"rendered":"http:\/\/financegourmet.com\/blog\/?p=1835"},"modified":"2022-08-22T12:03:51","modified_gmt":"2022-08-22T19:03:51","slug":"is-squaretrade-a-good-deal","status":"publish","type":"post","link":"https:\/\/financegourmet.com\/blog\/deals\/is-squaretrade-a-good-deal\/","title":{"rendered":"Is SquareTrade a Good Deal"},"content":{"rendered":"\n

SquareTrade has been bought by Allstate. Allstate is an insurance company that does auto, home, and life insurance. They now do item protection plans like SquareTrade used to do.<\/p>\n\n\n\n

I first wrote about SquareTrade<\/a>\u00a0 back in 2009. At the time, I was overjoyed at the concept of warranties from Square Trade. If you don’t remember, 2009 was the era of incredibly overpriced extended warranties from electronics stores. It turns out that companies like Circuit City were selling merchandise at a tiny profit, and making all of their money by having their salespeople push high cost extended warranties on anything. Even worse, when you tried to collect on that coverage, it turned out that your warranty wasn’t actually from the company you bought it from, but some business you never heard of, and that didn’t really care what you thought about them, their service, or their coverage.<\/p>\n\n\n\n

Is SquareTrade a Scam?<\/h2>\n\n\n\n

First off, SquareTrade is a legitimate company. It is now part of Allstate and they seem to be doing away with the name in favor of Allstate Protection plans. They’ve been in business for a long time now and have plenty of satisfied customers. However, there are some complaints about SquareTrade. Many of them stem from not fully understanding exactly what you are paying for, and how the coverage works.<\/p>\n\n\n\n

I just bought a new, Samsung Galaxy<\/a> S4 cell phone. I thought it might be instructive to look at how SquareTrade works by considering my purchase and the coverage option.<\/p>\n\n\n

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\"SquareTrade<\/figure>\n<\/div>\n\n\n

One nice thing about SquareTrade is that it is easy to get a price upfront, before you have to commit to anything, or call, or give out a bunch of your personal information. In this case, there is a special plan just for Samsung Galaxy phones. (There are also specific plans for iPhones and other popular devices<\/a>.) On the day I looked, 2-years of coverage is either $99 as a single payment, or $5.99 per month.<\/p>\n\n\n\n

I can already tell you that the SquareTrade warranty is cheaper than what Sprint was offering. Coverage from them was $11 per month, or nearly double. If you do the math, by making the one-time Square Trade payment, you only pay $4.13 per month which is an even better deal on coverage.<\/p>\n\n\n\n

SquareTrade Warranty Review<\/h3>\n\n\n\n

Now, let’s review SquareTrade warranty coverage<\/em> itself.<\/p>\n\n\n\n

The biggest thing to notice right away on this plan is the $99 deductible<\/strong>. That works just like your car insurance. If anything happens to this Galaxy S4, coverage does not kick in until you’ve paid $99 out of your own pocket. So, for example, if your phone need $135 worth of repairs, you owe $99 and Square Trade covers only $36. The in-house Sprint coverage has a deductible (up to $200) for most repairs as well, so that is comparable.<\/p>\n\n\n

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\"warranty<\/figure>\n<\/div>\n\n\n

Another way to evaluate the cost of the SquareTrade protection plan is to see how much you have to pay before you come out ahead. In this case, if you paid the one-time fee, you need to pay $198 before you break-even.<\/p>\n\n\n\n

The next step to review the SquareTrade warranty is to see what is covered. This is the one place where the company really does well. Everything from drops to spills to hardware failures are covered. The number one question on most people’s minds is what if I drop it in water, like a pool or toilet, and even that is covered. However, keep in mind that the $99 deductible still applies.<\/p>\n\n\n\n

When Can I Buy SquareTrade Warranty<\/h3>\n\n\n\n

The number one problem with insurance, including property insurance, is what’s called adverse selection. That is, the people who are more likely to collect on the insurance benefits are the most likely to enroll in the insurance coverage. For health insurance, they deal with this by only allowing you to enroll at certain times, or under certain circumstances. For example, your health plan at work probably has an open enrollment period during which you can sign up for your insurance. That way, you can’t wait until you feel sick to enroll.<\/p>\n\n\n\n

For property insurance, warranties generally have to be purchased right away to avoid a customer noticing a problem on their phone, for example, and then signing up. Although each warranty is different, in this case, the cellphone warranty must be purchased within 30-days of buying the phone. You’ll need a receipt to prove your purchase date.<\/p>\n\n\n\n

Whenever you are buying anything like this, always perform this type of analysis.<\/p>\n\n\n\n