An odd thing occurred last week when I received an unexpected call from, of all entities, my primary care physician’s office. The individual, I’ll call Ms. Amy, identified herself and launched an inquiry into my recent medical history. She’d posed two questions to which appropriate responses were provided before I realized it had been her who’d dialed my number. Of course, the next series of queries were presented by me as I wanted to know the reason for the office reaching out in such a manner.
Outside of my usual semi-annual physicals, thankfully, I’ve been blessed enough to not require the scheduling of doctor’s appointments very often. It struck me as a might perplexing when I considered the fact that Ms. Amy had actually phoned to “suggest” there might be a reason for me to make an appointment. Needless-to-say, I respectfully declined scheduling to see the doctor for the purpose of “looking” for something wrong.
Within two hours of the call from Nurse Amy, another person phoned and began soliciting information about the year, make and model of my vehicle. Of course, I was still somewhat baffled in the wake of the call from the doctor’s office so a red flag went up immediately. When “Mr. Phillip” began detailing the “Auto Warranty” programs offered by his company, I simply asked what would be the cost. He then detailed with painstaking clarity the benefit of paying $249 up front and $89 each month in the event something might happen to my vehicle. The warranty would cover any mechanical malfunction for the period of a year and I’d only be required to pay a $125 deductible per claim. So, in actuality, the annual cost of the “warranty” including payments and the deductible would equate almost $1500.
The beauty of any type warranty coverage (for the provider) lies in the fact the “security” is sold but there’s an underlying hope that no claims are ever filed. It’s a game of chance played by those who convince us of the need to protect ourselves against the inevitability of unfortunate circumstances. Ironically, the warranty companies will sell the insurance but, invariably, try to find reason to not payout on claims filed. Of course, that’s the way free enterprise functions as the end goal is to take in more money than has to be paid out.
There was a time the only insurances required were homeowner’s, automobile, health, and, for those with foresight, life. These days, companies have capitalized on the opportunity to sell policies ranging from dental insurance to home warranties designed to cover everything from appliances to, in some cases, full roof replacement.
One of the biggest components utilized in the process of “selling” the insurances or warranties relies solely upon representatives of said companies instilling fear into the minds of perspective clients. Their purpose is to convince people of the need to be prepared for the unexpected as a means of saving money in the event something does happen.
Of course, logic suggests anything man made will eventually require repairing or altogether replacing. So the agents selling extended warranty plans and post-warranty insurances are gambling that there won’t be any major mishaps during the contracted period.
In the event a claim is ever filed, there’s almost always the dreaded denial of coverage due to some seemingly insignificant caveat overlooked in the contract’s fine print. (Why are there no laws requiring legal agreements to be printed in plain English with no hidden, misleading, or barely visible verbiage?) This is an easily recognizable tactic that allows most insurers the ability to weasel their way out of the obligation to honor an agreement that was never intended to be recognized.
It does require a certain degree of financial self-discipline but there is a way to avoid the black hole of warranty and service plan installments. One sure-fire remedy is to simply put aside each month the amount that would otherwise be paid toward the premium or maintenance fee. If your vehicle doesn’t experience any major need for repair over a period of a year or more, there would be enough accumulated to cover the cost of most needs for parts replacement.
Truthfully speaking, it all hinges on chance at any given point anyway. Every product manufactured is designed with inherent flaws that will eventually facilitate the need for repair. Otherwise, there wouldn’t be generation of what industry experts refer to as residual income.
Rest assured that most major items in production today could be manufactured in such a manner as to not require as much upkeep. The unfortunate aspect regarding customers truly getting their money’s worth is that it would take away from the company’s bottom line. I could be wrong but it’s just something to consider.