by Andrew Baxter
It's hard to find exactly the right notebook, but satisfying once you finally settle on the right one for you. But the purchase decision isn't over yet, should you buy an extended laptop warranty and extra care coverage to protect your investment? How about laptop insurance? This article serves to provide some guidance on what warranty might be best for your needs, and what types of extra protection make sense.
What is a Warranty?
Let's start from the beginning here and make sure we understand what a basic warranty is. According to the dictionary the definition of the word warranty is:
A guarantee given to the purchaser by a company stating that a product is reliable and free from known defects and that the seller will, without charge, repair or replace defective parts within a given time limit and under certain conditions.
The given time limit for a basic laptop warranty is usually 1-year, but conditions vary widely between manufacturers and it is important to read the terms to understand exactly what is and is not covered.
In general, a basic laptop warranty and service support should at least give you:
A basic warranty and support does not include or cover:
That's a quick take on what a basic warranty is and isn't, but as stated, conditions for each company vary widely so pay attention when buying, here are a few links to major manufacturers warranty and support information:
The Support Aspect of a Warranty
One thing I will not cover is the actual support quality of each manufacturer, that's hard to quantify and something only consumer satisfaction surveys or notebook manufacturer forum discussion boards can give you an idea of. If you see a low consumer satisfaction rating and are able to find a discussion board full of complaints you might want to consider how valuable any warranty is from that company -- a 1-year or 4-year warranty is worth little if the support you get in return is bad. Having said that, keep in mind when it comes to discussion boards people are more likely to post complaints than praises in regards to support.
In purchasing a laptop you need to realize that when you buy a specific brand you're buying into that company as well -- support and confidence in a company should certainly be a factor in your decision. A buying decision shouldn't all be based on technical feature to feature comparisons. Any company can sell a product, it's more challenging and expensive for a company to support thousands of customers when problems arise.
Is a 1-Year Basic Warranty Enough?
This is a question I see all the time. First things first, a 1-year warranty should be the minimum warranty you accept. You might see notebooks being sold for $399 with a 90-day warranty and, while tempting, you should realize that cheap notebooks are more likely to develop problems and if that $399 purchase breaks after 6 months it's not a good deal at all. The absolute minimum you should look for is a 1-year manufacturer warranty.
Many notebooks that are going to fail due to some material or manufacturing defect will do so within the first year. So if you're looking to keep price down and simply can't afford a warranty extension, you can at least know the chance of your notebook failing after the 1st year due to a manufacturing defect decreases. The 1st year is the "break-in" period.
However, notebooks are a technology item that gets carried around, exposed to high levels of heat from internal components, can get lots and lots of usage, have mechanical moving parts, have varying levels of case quality construction and are prone to abuse. Think about it, what other $1,000+ technology item do you throw in a backpack, shove books on top of and then proceed to run into doorways with it or not so gently place it on a flat surface?
Laptops are a uniquely expensive and extensively used and abused item -- because of this problems can certainly crop up after the first year if you use and carry around your laptop a lot. In general, the more you use a notebook and carry it around the more likely it is to eventually break. If you know you will be using your laptop day-in and day-out and it will get moved around, a 1-year warranty is not enough -- you should strongly consider 2 - 3 years if you can afford it. If the laptop will simply be sitting on a desk, used now and again and you have confidence you're buying a well built product, then a 1-year warranty should be just fine.
Manufacturer Extended Warranty and Other Extra Coverage
Any notebook you buy will have the option for an extended warranty from the manufacturer and likely some other type of enhanced coverage. You can buy this extended warranty at the time of purchase or usually within 30-days after purchase. Usually a 3-year warranty is going to cost somewhere in the range of $200 - $300 to upgrade to from a 1-year warranty. For instance, in configuring a Dell Inspiron e1705 notebook I find that it will cost me $240 to upgrade to a 3-year warranty from 1-year. Dell also has a warranty option called "Complete Care" that will cover a laptop repairs for accidental spills, drops and power surges -- this costs about $100 extra.
When is a 3-year manufacturer warranty worth it? As a general rule of thumb you shouldn't pay for a warranty that costs 25% or more than the value of the notebook because after that point you're overpaying and wasting your money. For example, if you pay $300 for a 3-year warranty on a $1,000 notebook then the warranty is 30% the value of the notebook and boosts your total out of pocket purchase to $1,300. That's too much, you're better off just saving your money and if you're unlucky and something goes wrong with the laptop there's still a chance you could fix it for under $300 anyway. However, if you buy a high-end $3,000 notebook and a 3-year warranty is $300 then it's more reasonable to consider the warranty upgrade.
In regards to the accidental spill and accident coverage packages, such as Dell Complete Care, the value is questionable and only you can decide if such coverage is worth it based on how clumsy you are and how much value you place on peace of mind knowing your laptop is covered for silly accidents. We all know somebody that's spilt coffee or lemonade into their laptop keyboard, my own brother dropped lemonade onto a Dell notebook last year. He had to remove each key and clean underneath to get rid of the sticky residue, but now certain keys don't work properly, he had no accidental damage coverage so he's out of luck. You can also buy coverage for accidents through laptop insurance, more on that later.
Retail Store Extended Warranty
If you're buying direct from a retail store you absolutely will be encouraged to buy a protection plan offered by the store that extends a warranty to 3-years. You'll hear the pitch at least 3-times and be pressured into buying this warranty. You will be made to feel guilty or dumb if you refuse this coverage (see this story). This is because extended warranties are lucrative business for these stores, often with profit margins of 50%. For instance, extended warranty purchases account for about 4% of the entire $10 billion in annual sales of U.S. electronics retailer Circuit City (source).
You should almost always refuse store provided warranty coverage on notebooks. It is just about always cheaper and better to go with a direct manufacturer extended warranty. Notebook parts are often made to fit within a manufacturer's unique case design so they're going to be able to provide the right parts and do the repairs more efficiently. Furthermore, with a manufacturer's warranty, you continue to enjoy access to free tech support. For example, if you buy the Apple Care 3-year coverage for a new MacBook you get 3-years of call-in tech support in addition to repair coverage, you won't get call-in tech support from any retail store.
So when is a retail store coverage plan worth it? I can think of three cases:
Laptop Insurance for Accidental Drops, Theft, Fire, Tornadoes, Mudslides...
One thing your normal warranty does not cover is damage or problems with the laptop due to something caused by the user or an accident. If your dog runs through the power cord dragging the laptop off the kitchen table to the ground (true story) and said laptop breaks, you're not covered. Some manufacturers and retailers do offer fix coverage resulting from accidents, but this coverage is always more expensive and an extra. One option you may consider is laptop insurance. It's a bit hard to find insurance companies that offer this, but one that I know about is SafeWare. You can get a quote for the cost of insurance coverage on a laptop via an online form. Cost varies by state and the value of your laptop, but generally it seems to be between $48 - $100 for 1-year of insurance for a $1,500 laptop. Coverage includes fix, repair or replacement due to accident, theft, vandalism, fire, flooding for anywhere in the U.S. and while you're travelling.
If you have renters insurance or homeowners insurance, there's a good chance that if a laptop is lost due to a natural disaster then your laptop is also covered. Note, this does not include laptop damage coverage due to accidents (such as drops, spills, dogs or your kids wrecking your laptop). Insurance companies will often reimburse you for either the current replacement value of a notebook with similar specifications similar to the laptop you lost, or for the depreciated cost of your lost laptop. You would prefer a policy with current replacement value reimbursement because it's usually going to cost you more to replace a laptop than what the old laptop would have been actually be worth on eBay (laptop value often drops fairly fast after a year).
Renters and homeowners insurance can often cover your laptop when out of the house as well, so be sure to ask your insurance agent exactly what you're covered for and where. Keep in mind though, there's always a deductible on insurance, so for instance you'll pay the first $250 (or so) in repairs regardless and for every claim you make your insurance premium will go up in the future.
Laptops are frequent targets of thieves. Just do a Google News search on stolen laptop and you'll see daily reports from local and national newspapers. It's sad, but a true fact of life that there will always be thieves and they will always go for the highest priced easiest to carry off item. You can do such things as using a notebook lock to greatly deter theft, but if you want assurance that if a laptop is stolen you can get it replaced then SafeWare or other such dedicated laptop insurance again covers this. Your homeowners insurance and renters insurance likely covers such theft as well. Again though, claiming a laptop theft on your homeowners policy could boost the cost of that premium for the long term so having dedicated laptop insurance that wouldn't affect your homeowners insurance can be beneficial (and the dedicated laptop insurance covers accidents while homeowners/renters wouldn't).
Credit Card Free Warranty Upgrades (Yes FREE!)
If you purchase your laptop with certain credit cards you might be entitled to extra warranty coverage for free, just by using that card. For instance, if you purchase a laptop using an American Express Card then you get what's called a "Buyer's Assurance" coverage that can add up to 1-year free to your warranty. American Express doubles your warranty coverage but will not add more than one year (i.e., if you have a 6 month warranty it becomes 1-year, if you buy a 3-year warranty it becomes 4-years). The way it works is that after your manufacturer warranty runs out if your laptop breaks you would contact American Express and they would handle helping get it fixed and costs would be covered by them. Other credit card companies offer this type of coverage too, but Amex is probably the best in terms of reliability and customer service.
Here's a list of what major credit card companies offer extended warranties:
In order to utilize the extended warranty from these card companies you must:
I recommend American Express over other cards because their terms are better and the claims process easier. I once worked at the company and can endorse them as being well run and verify this protection works.
Your laptop will not be automatically covered for damage and repairs if carried outside of the country you buy it in. This is almost always an extra coverage you must buy if you want to be covered for international repairs. Such coverage is mostly exclusive to business notebooks since business people are the type of folks that go everywhere and need a laptop as a lifeline to getting work done. If you need international coverage, buy from a manufacturer that is established worldwide and will have repair centers all over. HP, Lenovo, Dell, Toshiba, Apple, Sony, Fujitsu, Acer and Asus are the obvious global power houses that might offer you an international warranty at a high-cost.
Avoiding Voiding a Warranty
There are a lot of ways to void a warranty, opening up your laptop and trying to upgrade a processor or graphics card is one way. Upgrading memory (RAM) is a common task that will not void your warranty. As a guideline, if you're replacing a component that's not modular (designed to be swapped out and replaced with ease) and doesn't have instructions in the notebook user guide on how to do -- it's probably a hardware change that's going to void your warranty. Just be careful with what you do and think carefully if it's worth making a change that may improve your notebooks performance, but may void your warranty.
Laptop Returns Policy
A warranty is not something that says you can return a laptop if you don't like it. That's covered under a separate return policy that is unique to wherever you buy the laptop from. Certain retailers have liberal return policies, if you buy a ThinkPad direct from Lenovo.com you can return a notebook within 30-days with no questions asked if you don't like the laptop. You have to pay for the return shipping though. At U.S. retailer Costco you can buy a laptop and return it within 6 months. Amazon.com has a 30-day return policy. These are exceptions though. As a rule, you can assume that if you decide to return a laptop just because you don't like it or have buyer's remorse then you'll pay on average a 15% "restocking" fee. So if you buy a $1,000 laptop and return it, you'll lose out on $150 in some type of restock fee.
Final Word and Conclusion
So to wrap things up, here are my final recommendation for how much warranty coverage to buy for your laptop and some points:
It's up to you how much warranty you think you'll need. I do think a 2-year warranty is sort of the sweet spot. 3-years is certainly nice to have and people often replace a laptop after that time any way, so it's great to be covered for the full length of ownership. 4-years of warranty coverage is expensive and probably overkill.
Just remember that when shopping for a notebook check to see what the basic warranty terms and length are -- a laptop purchase is more than just looking at the hardware and comparing feature to feature -- you're buying into a company and its support as well. Make sure you weigh that in your purchase decision.
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