Wednesday, January 30, 2008

Not paying attention can cost you.

Many credit cards offer Extended Warrenty and Purchase Protection as "built-in" features of the card. I've known about these features for years, but I've never really taken the time to investigate the details. Here's what I've found:

Extended Warranty

This protection extends any manufacturer's warranty by up to one year, for most purchases made using the card. If you use your card to buy a product that has a one-year manufacturer's warranty, then the card automatically provides an extra year's warranty after the original coverage expires. This is handy if, for example, you buy a laptop with a one-year warranty, and a manufacturing defect manifests fifteen months after the purchase. It's not covered under the manufacturer's warranty, but your credit card comes to the rescue. In most cases, you don't even have to do anything to register for this extended coverage; just call your card provider when the problem develops, and they'll send you the appropriate claim forms.

Purchase Protection

This protection covers most purchases made using the card against theft or damage within 90 days of purchase. If you drop and break your iPod one month after buying it, the card provider will pay to have it repaired or replaced. The interesting thing about this coverage is that, while Extended Warranty protects you against issues that are the manufacturer's fault, Purchase Protection can protect you against things that are your own fault. There are exclusions and limitations, but basically this coverage ensures that you can enjoy your purchases for at least three months.

About a year ago, I bought myself a 19" widescreen LCD monitor to replace an aging 17" CRT, and sat back to enjoy my newfound desk space. Six weeks after my purchase, however, a cabinet installed above my desk pulled free of its wall anchors, and collapsed on top of the monitor. After the dust settled, I determined that the monitor was still in fine working order, despite significant scratches and scuffs on the screen. I grumbled and cursed, installed stronger wall anchors to re-hang the cabinet, and resigned myself to the fact that, until I could afford a replacement, I would make do with my battle-scarred monitor.

Looking through my MasterCard's terms and conditions today, it occurred to me that this incident likely would have qualified for a Purchase Protection claim. I can't be entirely sure, without having gone through the claim process, but it seems that this kind of accident is exactly what the insurance is meant to cover. If I had been more aware of my rights when this happened, I might have spent the last several months enjoying a brand new monitor.

It's to my credit that I have continued to use the banged-up monitor, rather than running out and throwing a replacement on credit, but it would have been nice to have an immediate "sorry-for-your-luck" payout to allow me to correct my mistake. You can bet that, the next time something breaks so early in its lifespan, I'll be all over the Purchase Protection folks.

Know your rights, and the coverage options that are available to you. You never know when you might need them.

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