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isobars
Joined: 12 Dec 1999
Posts: 20935
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 Posted: Mon Feb 23, 2009 11:39 pm Post subject: |
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| EzzyCzar wrote: | | Why not sell warranties? Like best buy or other electronics shop do. The price might be high, but those who are really worried would probably buy the warranty. The prefect world answer would be that the factory starts building better boards. |
Actually, extended "warranties" are just insurance policies, priced to make a profit on them. It's far easier to just raise the extended "warranty" premium than to make a better product if there are too many claims. As you said, "those who are really worried would probably buy the warranty" ... at almost any price. THEY'RE the suckers those policies are priced for.
The other category of extended warranty buyer is the legitimate one: the person who flat can't afford to replace his transmission or plasma TV or board. Of course, maybe that buyer doesn't need the new car, TV, or board as much as he thinks he does. 
Mike |
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DanWeiss
Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA
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| Posted: Tue Feb 24, 2009 2:22 pm Post subject: |
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| isobars wrote: | | EzzyCzar wrote: | | Why not sell warranties? Like best buy or other electronics shop do. The price might be high, but those who are really worried would probably buy the warranty. The prefect world answer would be that the factory starts building better boards. |
Actually, extended "warranties" are just insurance policies, priced to make a profit on them. It's far easier to just raise the extended "warranty" premium than to make a better product if there are too many claims. As you said, "those who are really worried would probably buy the warranty" ... at almost any price. THEY'RE the suckers those policies are priced for.
The other category of extended warranty buyer is the legitimate one: the person who flat can't afford to replace his transmission or plasma TV or board. Of course, maybe that buyer doesn't need the new car, TV, or board as much as he thinks he does.
Mike |
No Mike, extended warranties are not "just" insurance policies. In fact, warranties share very little in common with insurance policies.
Warranties are purely contractual relationships between the two principals or with a third party obligor and corresponding beneficiary (common in used-car extended warrantee agreements). An insurance policy is a relationship involving fiduciary obligations of the underwriter owed to the policy holder. Insurance is highly regulated while warrantee agreements are mostly unregulated. Insurance policies are written largely in the negative -expressing what is outside the terms of coverage. Warranties generally are written using positive language with less scope in the exclusions.
Just to be clear. |
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isobars
Joined: 12 Dec 1999
Posts: 20935
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| Posted: Tue Feb 24, 2009 6:41 pm Post subject: |
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| DanWeiss wrote: | No Mike, extended warranties are not "just" insurance policies. In fact, warranties share very little in common with insurance policies.
Warranties are purely contractual relationships between the two principals or with a third party obligor and corresponding beneficiary (common in used-car extended warrantee agreements). An insurance policy is a relationship involving fiduciary obligations of the underwriter owed to the policy holder. Insurance is highly regulated while warrantee agreements are mostly unregulated. Insurance policies are written largely in the negative -expressing what is outside the terms of coverage. Warranties generally are written using positive language with less scope in the exclusions. |
You're talking legal definitions; I'm talking practical applications from the consumer's point of view as discussed in the hundreds of media articles warning consumers against extended warranties. In fact, according to Consumer Reports at http://tinyurl.com/dzgzut , the truth lies between the two in what's called prepaid repair contracts. Most extended warranties are issued and/or underwritten by third parties, not Ford or Best Buy or RCA but companies like Flybynight, Inc. and ContractsRUs. They offer little, if any, incentive for the manufacturer to improve his product. That practical consideration, rather than what lawyers call the policy in court, was my point.
Thanks for correcting me; I'll try to remember to use the proper legalese next time ... if it adds to the discussion rather than just wrapping it around the axle. Nothing personal, but we all hope our next warranty or insurance or repair contract claim never gets near a lawyer or court of law.
I spent weeks last winter trying to get our state insurance commissioner to obey state laws requiring him to enforce clear state and federal laws on a false claim filed against me. He admitted I was right, but refused on both counts despite the other party's written admission that their damage claim to the police, to his insurer, and to my insurer was false. His excuse? "We don't act unless we get many similar complaints." That reinforced my opinion that insurance and warranties and repair contracts -- and now apparently mortgages -- are primarily, from a practical standpoint, pieces of paper for lawyers to argue about at everyone else's expense.
Mike |
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DanWeiss
Joined: 24 Jun 2008
Posts: 2296
Location: Connecticut, USA
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| Posted: Tue Feb 24, 2009 9:10 pm Post subject: |
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| isobars wrote: | | DanWeiss wrote: | No Mike, extended warranties are not "just" insurance policies. In fact, warranties share very little in common with insurance policies.
Warranties are purely contractual relationships between the two principals or with a third party obligor and corresponding beneficiary (common in used-car extended warrantee agreements). An insurance policy is a relationship involving fiduciary obligations of the underwriter owed to the policy holder. Insurance is highly regulated while warrantee agreements are mostly unregulated. Insurance policies are written largely in the negative -expressing what is outside the terms of coverage. Warranties generally are written using positive language with less scope in the exclusions. |
You're talking legal definitions; I'm talking practical applications from the consumer's point of view as discussed in the hundreds of media articles warning consumers against extended warranties. In fact, according to Consumer Reports at http://tinyurl.com/dzgzut , the truth lies between the two in what's called prepaid repair contracts. Most extended warranties are issued and/or underwritten by third parties, not Ford or Best Buy or RCA but companies like Flybynight, Inc. and ContractsRUs. They offer little, if any, incentive for the manufacturer to improve his product. That practical consideration, rather than what lawyers call the policy in court, was my point.
Thanks for correcting me; I'll try to remember to use the proper legalese next time ... if it adds to the discussion rather than just wrapping it around the axle. Nothing personal, but we all hope our next warranty or insurance or repair contract claim never gets near a lawyer or court of law.
I spent weeks last winter trying to get our state insurance commissioner to obey state laws requiring him to enforce clear state and federal laws on a false claim filed against me. He admitted I was right, but refused on both counts despite the other party's written admission that their damage claim to the police, to his insurer, and to my insurer was false. His excuse? "We don't act unless we get many similar complaints." That reinforced my opinion that insurance and warranties and repair contracts -- and now apparently mortgages -- are primarily, from a practical standpoint, pieces of paper for lawyers to argue about at everyone else's expense.
Mike |
Mike, I raised a basic legal distinction between the two in order to illustrate why extended warranties are generally viewed as of little value to the consumer of many goods on which they are based, and how one cannot expect the same sort of value when compared to an insurance contract. The reason why consumers feel burned by extended warranties usually centers around the payoff amount hitting an ever descending ceiling as the product depreciates. It's just like how an accident with identical damage may allow very expensive repairs of a new car but trigger a total loss declaration and lower payout for an older car.
The difference is in the consumer remedies when one side fails to abide by the agreement's terms. Insurance companies are generally liable for multiple damages for breaching their agreement (such as denying coverage in bad faith) whereas the warrantor would simply be forced to cover the warrantee claim in most instances because of the lack of the special relationship between the customer and warrantor that exists between the holder of an insurance policy and the issuer.
Your experience with your insurance commissioner doesn't surprise me. Unless the degree of fraud is very high or the amount of similar frauds is high I think its unlikely that any state office will spend hundreds of hours and thousands of dollars to enforce an individual case of fraud. To do so removes one of their primary roles; to prosecute those cases that rise to the level of a public threat and those that, without prosecution, push the boundaries of the law farther than the commissioner deems acceptable.
Before dismissing the idea of extended warranties for windsurf boards, I think we need to know the remedy available through the warrantee. One could say, for example, that an average production board should not buckle in normal, non-jumping use for one year. If XYZ brand simply would extend that out for another two or three years at a reasonable price, I say XYZ certainly does have motivation to better its products. If XYZ only warranted for six months and offered an extension for another six months for the same money, then I would agree with you. |
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linda81
Joined: 22 Dec 2008
Posts: 2
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madmax7
Joined: 07 Mar 1997
Posts: 561
Location: So Calif
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| Posted: Thu Mar 05, 2009 11:23 pm Post subject: Prices |
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Personally I think the industry is pricing itself out of the market, all these years we talk about people leaving windsurfing, well the price of boards and sails (and other items) are getting ridiculous.
A board price averaging $1,500 be real. With 9% unemployment lets see what they sell this year.
Max
and dont get me started with the price of new kites...what do these have silver lining? |
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