Buying a Warranty for Your Holiday Purchase? 3 Things to Look for in the Fine Print

At this point, many consumers are rushing around to finish their holiday shopping. And while the gifts you're buying might run up a large credit card tab in their own right, there's an additional expense you might contemplate in conjunction with those purchases: warranties.

A recent survey by LegalShield found that more than two-thirds of consumers plan to buy an extended warranty this year during their holiday shopping. The problem, though, is that

62% of consumers report that they face difficulties when attempting to resolve warranty claims with retailers and manufacturers.

If you're going to spend the money on a warranty for your holiday purchases, it's important to make sure you're doing so for a good reason. So before you buy a warranty, do the following.

1. Pay attention to exactly what's covered

One potential problem with warranties is that they're not always easy to understand. In the aforementioned survey, 44% of consumers said the warranty terms they've seen are somewhat or extremely confusing.

It's important to make sure you understand what your warranty covers and what it doesn't. For example, normal wear and tear is usually excluded from coverage. And in many cases, you may not be protected in the event of user damage (meaning, you did something to cause your product to malfunction). If there's something you don't understand, see if there's a customer service number you can call to get things clarified.

2. Be mindful of usage

In some cases, you may not be able to file a claim under your warranty if you don't use a given product the way it's recommended. For example, if you expose the item to a temperature that's not advisable as per the manufacturer, that could render you unable to file a claim. Or, if you use your device with a non-approved accessory (for example, an off-brand charger), that, too, might void your warranty. Make certain you understand what usage standards your warranty imposes before buying it.

3. Understand the process of actually filing a claim

Something as simple as not following the right process could result in a warranty claim getting denied. But if the process of filing a claim is ridiculously complicated, then you may want to skip the warranty if it's unlikely that you're going to be willing to put in the time.

In some (more extreme) cases, to provide proof of malfunction, you may be asked to take a video showing how your product isn't working and then upload it to a site. That's something you may not want to do. In other cases, you might have to provide a series of photos with explanations. If you're a busy person who barely has time to read through a warranty, you probably don't want a warranty whose claims process entails more than just a simple online form.

Should you even bother purchasing a warranty?

You may be inclined to purchase a warranty if you're buying an expensive product. But in some cases, sticking with a reputable manufacturer and retailer could make it so that a warranty really isn't necessary. Costco, for example, offers a second-year warranty on electronics at no cost.

Another option you may want to consider is just adding some money to your savings account in conjunction with buying an item you're looking to protect. That way, instead of paying for a warranty you may or may not end up being able to file a claim against, you'll have money on hand should you need to repair the item in question.

Of course, if you're investing in a really expensive item, then buying a warranty may end up being worth it for your personal finances. But for a moderately priced item, you may want to save your money instead.