Warranty wonders

[leathers]

Have you tried Genuine Warranty, these were recommended to me by Buxton Motorsports. These are the premiums I was quoted buying direct on a 30K mile 2001 Boxster S. 3 years coverage for $1539 with a $200 deductible doesn't appear to be too bad.

[I]Premium Coverage
The ultimate coverage for your automobile - exclusionary coverage means everything is covered unless listed as an exclusion - vehicle must be under 10 years old and have under 120,000 miles. This coverage is the best money can buy and mimics a factory warranty. Customers may choose from a $50, $100, or $200 deductible.

Year/Miles
$50 deduct.
$100 deduct.
$200 deduct.

1yr / 12k
$806
$733
$619

2yr / 24k
$1,388
$1,248
$1,035

3yr / 36k
$2,096
$1,882
$1,539

[z12358]

Originally Posted by seventythree

Z,
Tell me if you agree with the way I re-iterate your argument:

If the $6~8K repair bill most Boxster owners are concerned about, in the case of a complete engine replacement for example, represents a significant portion of the owner's net worth, then buying breakdown insurance makes good sense. Otherwise, self insuring is the way to go.

Net worth = $100K, buy extended coverage
Net worth = $1M, self insure

Regards

Close re-iteration, except it's missing the part where the VOLATILITY (range) of the random process is compared to its AVERAGE (which approx equals the annual premium minus the insurer's profit margin). If the average is much smaller than the volatility (i.e. premium is low enough) it may be better for both (net worth) cases to just buy the insurance. If the average is comparable to the volatility (i.e. premium is comparable to the worst case scenario) then it may be better for both to just self-insure as they will both be able to invest the premium into a "worst case" account and be able to cover the worst case scenario themselves.

But to answer your question -- and without getting into issues like liquid vs. non-liquid assets, utility functions, risk of ruin, etc. -- the richer guy should be able to self-insure much easier than the other guy, so your final conclusion seem to be correct but not at ANY price (premium), of course.

Z.

[wetstuff]

I did a lot of searching when the P-warranty was about to expire on a 01 Boxster-S I bought a couple of years ago. I looked at most third-party warranty companies before I came up with one that is only sold thru Credit Unions.

It's InterContinental Warranty Svcs. They had a variety of terms: I chose 5yr/80k (Ha!..I'm at 21k) I forget the big insurance company behind them, but the reason I opened an account at the MD State Employees (slackers..) CU is that I got the Guaranteed Price Refund rider which means: of the $1920 I paid - I get like $1800 back if I don't use it. ...They may only write cars that are still under factory cover. Mine had about 30days left.

We may sell the car, so I'll either pocket the warranty...or pull it out to close the deal. Cash-back doesn't transfer but the basics of the policy do.

Given the general long term quality of our cars and my limited useage - it's probably not statistically needed. That's why cash-back was especially attractive.

j i m