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My philosophy for virtually all extended warranties is simple: I don't buy them.
There are really only two good reasons to buy extended warranties of any sort:
1) You are unable to bear the financial consequences if you don't buy the warranty (this is very, very rare in the majority of cases for people -- you can almost always bear to replace an item under $1000 USD, or at least $500). This is not to say that you will WANT to bear the cost, but bearing the cost will not up-end you, financially speaking. Your finances should be able to deal with this kind of unpleasant event in life.
2) You need to buy it for the peace-of-mind you get knowing that should a problem arise, no matter what, you'll be okay (this is a little faulty line of logic, too, since the language of any extended warranty makes it less than certain that you will be made whole should you suffer a loss).
My philosophy was reinforced (to me) when I went through the Florida State University's Certiificate in Financial Planning program. It makes much better sense to self-insure yourself. That is, don't buy any extended warranty on anything -- your car, your appliances, your PDAs -- and take the costs of all the extended warranties you'd like to buy and set the money aside somewhere, so when something DOES break, you've got a pot of cash from which to draw to repair/replace the defective unit.
The biggest problem of self-insurance? People don't have the self-discipline to set aside money this way.
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