Originally Posted by Triguy
Also, remember your dealer has an incentive to sell this plan - they will get reportedly up to half the premium.
That is the kicker for me. The actual money collected to cover the expected loss is the indicator of the true value of the insurance policy. And because of the high sales commissions, extended warranties have a very low expected set asides relative to the premium collected. There is also an adverse selection problem. Those most likely buy the coverage are the ones who feel they are more likely to collect.
A good preventative maintenance plan can head off many of the sources of problems that might result in claims. So the extended warranties are, to me as someone who takes care of my property, a waste of money.
The only thing that it seems would be of value is coverage for gross manufactures errors, such as the failures of the old Fleetwood ABS roofs.
My thinking is that while our A Frame trailers are relatively new designs, they are substantially less complicated that the lift/roof system of a tent sided PUP and thus are substantially less likely to suffer such a dramatic failure when coming from a manufacturer with a reasonable history of reliability. Really building a PUP is old hat to Forest River.
I am tempted to say, "what could possibly go wrong with such a simple design," but that would only invite trouble.