Little value in pouring money into insurance 'dead weights'
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MANY column inches in this newspaper have been devoted to highlighting the poor value of products such as mobile phone insurance and extended warranties.
We briefly summarise why these products should be approached with caution.
Mobile operators Vodafone, 02 and Meteor offer mobile phone insurance at a rate of between €5 and €9 a month.
While this might seem reasonable, most mobile phones are so inexpensive to buy that the cost of this cover often works out more expensive than buying a similar phone again after two years.
Many policyholders have complained that it can be very difficult to make a successful claim on mobile phone insurance if a phone breaks or is stolen.
Some extended warranties also count as insurance "dead weights". Such warranties might make sense in the case of large appliances, such as a washing machine or a freezer.
But they can come at a high price. Premiums for these extended warranties can sometimes cost as much as 50pc of the appliance's purchase price, according to the National Consumer Agency.
Don't believe it? Take a look at an Argos catalogue. For a clock radio worth just over €10, Argos will provide you with a "Replacement Product Cover" for three years for €3.99.
"If you buy something for €10 and it stops working after two years, it owes you nothing," says Brendan Burgess, founder of Ask-aboutmoney.com. "Throw it out and buy a new one."
