Extended warranties and service contracts: who actually pays

The Federal Trade Commission lays out what an extended warranty or service contract actually is — a paid add-on, separate from the manufacturer’s warranty, that’s only as valuable as the company responsible for honoring it. That company often isn’t the manufacturer, so the FTC’s guidance is to find out who backs the plan, what the deductibles and fees are, and exactly how the claims process works. Its blunt rule on coverage: if a repair isn’t listed in the contract, assume it’s not covered. And if a plan won’t perform, you can report it at ReportFraud.ftc.gov and to your state attorney general.

The hard part for a consumer is knowing whether a given breakdown falls inside those lines. OwnWise helps you read your own situation: it identifies the likely fault, flags whether it looks like a covered defect versus an excluded cause like wear or misuse, and estimates a fair repair cost — so you can check it against the contract before you file, and recognize a wrongful denial when you see one.

Read the FTC’s guide to know how a service contract works; let OwnWise tell you whether your repair is the kind it should cover.