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What to know before buying an extended warranty

Posted at 9:43 AM, Feb 20, 2016
and last updated 2016-02-20 13:08:03-05
When you shell out big bucks for a major appliance or product, you're usually asked if you want the extended warranty. One local couple says, they regret their decision to do just that. Contact 13 has the 4 things you need to know before buying a warranty.
"It's suppose to protect everything about it, and we can't get to first base," says Bill Moore.
He and his wife Cleo have a Master Protection Agreement for their heating and air conditioning unit. But when their A/C went out last September, they were told the part needing to be replaced, wasn't covered.
"Well we had the Master Protection Plan... it makes no sense, and I've been paying for years," says Bill.
They purchased their service contract through Sears, and pay $417 every year.
"So we're just giving you money every year for nothing? For a piece of paper?" says Cleo.
Sears fixed the air conditioning. But Bill and Cleo were slapped with a $3,600 balance. And they're not happy about it.
"You willingly take my money every year, and make us feel we are covered... How dare you," says Cleo.
So how do you avoid your own extended warranty nightmare?
  1. Look for special conditions, exclusions, and limitations. Some contracts limit the amount they'll pay for repair work, or replacements.
  2. Be sure you know who handles a claim. Many times repairs are handled by a third party. And sometimes, you may be required to return the item to the store.
  3. Look carefully at how long you're really covered. A contract offering 5 years of extended coverage, may only be providing 4. That's because they sometimes include the manufacturer's typical 1 year limited warranty.
  4. Learn about the Free Look-Up Period. Under certain circumstances, the warranty provider may be required to give you a full refund. But you may have as little as 10 days to act.
"I'm fed up. There's no where else for us to go," says Cleo.
As for Bill and Cleo, Contact 13 reached out to Sears about their case. The company simply states the "work was not covered by the Sears Master Protection Agreement."  And they believe the charges are appropriate. But the question is, why wasn't it covered?
"When Sears initially came out and we signed up with the agreement, they checked everything. Sears checked the unit up there," says Bill.
Sears stopped responding to Contact 13's questions. But here's what we know. According to Sears' paperwork, Bill and Cleo's repair was needed because their "evaporator coil was leaking." Well guess what, that's covered under the Master Protection Agreement. See where it says Centralized A/C Coil?
According to a local A/C expert, that's the same thing as an evaporator coil. Bill and Cleo say they plan to fight the charges.
"I don't feel we owe it. It's wrong. They have wrongfully charged us," says Cleo.
"You are being totally unreasonable and unfair to us," says Bill.
If you're having issues with an extended warranty, file a complaint with the Nevada Division of Insurance. In some cases, you can also turn to the State Contractors Board.