TV Warranty and Service Contract Company Review and Comparison

by Phil Conner

Following is a comparison chart of reviewed terms and conditions of the most prominent TV warranty companies, at least on the Internet to help you evaluate the offerings of each. Warranty service contracts are difficult to decipher and can contain many layers of information. We've heard some horror stories about poor service as well as some that say that purchasing the warranty was a great decision. Maybe the following analysis of each companies terms and conditions and price comparisons will help you decide if an extended warranty on that new TV purchase is right for you. One thing we noticed right off the bat was that 3rd party extended warranties are A LOT less expensive than their retail store counterparts while sometimes offering as much value. We'll give some caparison there as well.

Comparing TV warranty service contract terms and conditions and offerings is tedious work. We've highlighted several of the most important categories where there is differentiation. There are clauses and conditions within some plans that are red flags to be avoided. I am here dubbing these "ripoff clauses," because they are not what most consumers will expect when purchasing an extended service plan, will catch you by surprise, and will allow the company selling the plan to effectively rip you off when service is needed.

We've come up with our own names for the ripoff clauses below in order to categorize them. Where all of the contracts are the same or similar we've largely omitted the information but have given you some of the most common provisions below. The extended warranty providers term their products differently as - extended service plans, maintenance performance guarantee, service contract, or service agreement. There are apparently legal reasons that they do not call them by the name they are most known by – extended warranty plans. For simplicity sake, we refer to them all as the latter.

Following are the categories we felt were most noteworthy and important to the end user for comparison. We've come up with the following names to describe the most damaging ripoff clauses as "the DV buyout clause", "the dump clause", and "the strict limitation clause". A decription of these clauses follows and explains why they are dangerous.

Common exclusions from coverage among all of the TV warranty service contract providers are:

• Extended Warranty Starts from date of purchase of the TV and run concurrent with the manufacturer's warranty. The manufacturer's warranty supersedes the extended warranty during the first year.
• TV screen burn in not covered.
• Cosmetic damage or physical abuse
• Pixel defect policy same as manufacturers policy
• Pre-existing conditions that occur prior to effective date of contract
• Manufacturer's defects occuring during the manufacturer's warranty period
• TV must have valid manufacturer's warranty for at least 90 days
• TV with removed or altered serial numbers
• Cancellable within 30 days for full refund
• Almost all cover damage caused by power surge or lightning
• Any and all consequential damages

Following are the categories we felt were most noteworthy and important to the end user. We've come up with the following names to describe the most damaging clauses as "the buyout clause", "the dump clause", and "the strict limitation clause". A decription of these clauses follows and explains why they are dangerous.

1) The DV (Depreciated Value) Buyout Clause. Does the warranty or service contract have a depreciated value buy out clause? Buyout clauses can make a warranty or service contract nearly worthless. They are so named Depreciated Value Buyout Clause because they allow the extended warranty administrator to "buy out" your warranty at a depreciated value equal to the market value of your TV at the time of service. So if you purchased a $2000 TV and 4 years later the TV would sell used for $500 as a used TV in the marketplace, that's the amount the warranty provider will give you – releasing them from all further obligations. It really makes an extended warranty a bad deal. Many times the clause also includes language limiting repair costs to the same amount. Referring to our above example, this means that if a repair costs the warranty provider $400, they can pay you $100 and call the contract settled. One further daunting phenomenon behind this clause, is that the the warranty company has the right to decide what your TV is worth at the time of service.

2) The Dump Clause. We came up with this clause name to describe contract terms that allow the extended warranty company to completely dump the contract (and you) due to certain conditions. One example in some contracts is the warranty provider claims they can no longer obtain parts to repair the TV or product, that gives them the right to cancel the contract. Some give you back the full amount paid for your warranty while others only a pro-rata portion!!

3) The Strict Limitation Clause. We came up with this clause name to describe contract terms that limit the amount of money the extended warranty company will spend on the product strictly to 1) either the amount originally paid for the TV, or 2) the current value of the TV. So if you paid $1000 for your TV and it cost the extended warranty company $700 to in repair costs the first time, then the TV goes out again – the warranty administrator owes you $300 in the first instance or likely nothing in the second and all contract terms are satisfied. In other words, your left with a broken TV. Since repair costs are expensive, your likely only going to get one repair done during the life of the warranty.

4) Bulb replacement included for DLP TVs. Some warranties include bulb replacement for rear projection televisions. For RP TV owners this is an important consideration as you will almost certainly have to replace a bulb during the warranty period and this can make the warranty pay for itself even without service on the TV.

5) Is the service agreement transferable? If you sell the TV before the warranty period ends can you tranfer the warranty with the television.

6) Special Exclusions: Exclusions from coverage that differ from other company offerings.

7) Special Inclusions: Inclusions within coverage that differ from other company offerings .

8) Oddities/Inconsistencies: Something odd in the language of the contract, or inconsistences between initial claims of what is covered and what is actually covered in the fine print of the contract.

9) On-site (In Home) Service? Is the warranty service completed in your home or will you have to ship or haul the unit to a service center?

9a) Applicable Radius for Service. How far will th service center go to provide in home warranty service?

10) Who pays shipping? If you are outside the service radius or the TV has to be shipped for another reason then do you pay it or does the warranty company?

10b) Authorized Service Center? Is the television service done by an authorized service center? Authorized service centers have the best access to parts and the technicians are experienced in working on the specific brand of television.

10c) *Pricing on 5 Year Warranty LCD TV of $2300?
10d) *Pricing on 3 Year Warranty Plasma TV of $1100?
10e) *Pricing on 5 Year DLP TV $1400?

*Years from Date of Purchase of the TV.

11) Better Business Bureau Rating and # of Complaints. Is the warranty company registered with the BBB, what is the rating on an A-F scale and how many cmplaints have been filed in the past 36 months

12) Is the Service Contract Insured? An important consideration, if the company you buy the warranty from goes out of business or is bought out is there an insurace company backing up your contract?

13) Backing Insurance Co. Rating? AM Best Rating of the Service COntract Insurance Company

Editors Choice Award. XpresServ Warranty. With an A rating and with only 11 complaints in 36 months, no "ripoff clauses", and the lowest pricing we like the XpresServ warranty for best value. This company really specializes in TVs and projectors. It was fairly easy to get them by phone, but one time we had to wait on hold.

Editors Choice Award. Squaretrade. With an A rating with BBB, but 79 complaints in the past 36 months, Squaretrade's complaints are still within reason. There is only one of the three "ripoff" clauses - the strict limitations clause which is probably the least damaging of the three. Pricing is good, but no 5 year warranty offered. One small caution, some of the gaurantees promised on the ads dont apply to large TVs.