INSURANCE IS A WAY to get others to shoulder devastating financial risks that it would be foolish to shoulder on your own. That’s why young parents with few assets need heaps of life insurance—but also why buyers of televisions shouldn’t get the extended warranty. Because the potential financial loss is modest, I’ve often argued that folks should skip not only extended warranties, but also trip-cancellation insurance.
But readers have pushed back, arguing that both types of insurance can make sense—in two particular situations. First, trip-cancellation insurance is a smart idea for seniors, especially when booking expensive vacations, because illness could prevent them from traveling.
Second, extended warranties are valuable when buying anything with a screen—such as a phone, tablet or laptop—for a child below, say, age 15. As I look across the living room at my stepdaughter’s cracked iPad, I have to admit it, the extended warranty probably would have been a good idea.