Over 100 Million Service Contracts Sold Annually Remain a Popular Choice for Holiday Shoppers

Nov 15, 2007, 00:00 ET from Service Contract Industry Council

    TALLAHASSEE, Fla., Nov. 15 /PRNewswire/ -- As the holiday season
 commences, consumers throughout the U.S. will purchase service contracts
 for the gifts they give family and friends.
     More than 100 million (a conservative estimate) consumer goods service
 contracts, often referred to as extended warranties, are purchased annually
 to protect and add value to gifts.
     "Service contracts are in particular demand as manufacturer warranties
 shrink, many to as short as 90 days," said Timothy J. Meenan, executive
 director of the Service Contract Industry Council (SCIC) and former Deputy
 Insurance Commissioner with the Florida Department of Insurance. "Service
 contracts provide valuable purchase protections that save consumers time
 and money in the event of a product malfunction."
     According to Consumer Reports (November 2007), 53 percent of consumers
 are planning to buy an electronics gift this holiday season with 69 percent
 of shoppers ages 18-34 and 36 percent of those ages 35-54 saying they are
 likely to purchase an extended warranty.
     JD Power & Associates found that one out of every four consumers
 purchases an extended warranty for their major appliances. "You shouldn't
 underestimate the convenience and peace of mind that an extended warranty
 might offer you," states Dale Haines, Senior director of the real estate
 and construction industries practice at J.D. Power and Associates.
 "Certainly with any big ticket items or appliances that have sophisticated
 electronics, consumers should consider whether an extended warranty makes
 sense."
     Benefits of Service Contracts:
     Service contracts save valuable time and money, and minimize hassle
 when a product or system malfunctions. JD Power found that "one in 10
 consumers report some kind of problem with their major appliance." With a
 service contract, consumers typically have 24-hour access to a network of
 highly-qualified, pre-screened service technicians or prompt replacement
 resources ... so few problems require a service visit.
     Additional benefits include:
     -- Protection for failures caused by power surge and normal wear and tear;
     -- Coverage for batteries and bulbs (a projection TV replacement bulb, for
 
        instance, can cost $300 or more);
     -- Protection  for accidental damage from handling;
     -- Maintenance benefits including laser cleanings for DVD players;
     -- Trouble shooting, repair, and support for computers, printers,
        networking equipment, telephones, gaming equipment, etc.
     -- No advance payment, "claims adjustments," deductible for parts and/or
        technical labor
     The SCIC wants consumers to know that a service contract is not an
 insurance product. Benefits of a service contract are triggered as a result
 of product failure that is due to a defect in materials or workmanship, and
 sometimes wear and tear.
     Established in 1989, the SCIC (http://www.go-scic.com) is a national
 trade association that works with lawmakers nationwide to develop fair and
 uniform regulation to protect consumers and the industry. SCIC member
 companies provide the majority of service contracts for electronic
 products, appliances, homes, and motor vehicles offered in the U.S.
 
 

SOURCE Service Contract Industry Council
    TALLAHASSEE, Fla., Nov. 15 /PRNewswire/ -- As the holiday season
 commences, consumers throughout the U.S. will purchase service contracts
 for the gifts they give family and friends.
     More than 100 million (a conservative estimate) consumer goods service
 contracts, often referred to as extended warranties, are purchased annually
 to protect and add value to gifts.
     "Service contracts are in particular demand as manufacturer warranties
 shrink, many to as short as 90 days," said Timothy J. Meenan, executive
 director of the Service Contract Industry Council (SCIC) and former Deputy
 Insurance Commissioner with the Florida Department of Insurance. "Service
 contracts provide valuable purchase protections that save consumers time
 and money in the event of a product malfunction."
     According to Consumer Reports (November 2007), 53 percent of consumers
 are planning to buy an electronics gift this holiday season with 69 percent
 of shoppers ages 18-34 and 36 percent of those ages 35-54 saying they are
 likely to purchase an extended warranty.
     JD Power & Associates found that one out of every four consumers
 purchases an extended warranty for their major appliances. "You shouldn't
 underestimate the convenience and peace of mind that an extended warranty
 might offer you," states Dale Haines, Senior director of the real estate
 and construction industries practice at J.D. Power and Associates.
 "Certainly with any big ticket items or appliances that have sophisticated
 electronics, consumers should consider whether an extended warranty makes
 sense."
     Benefits of Service Contracts:
     Service contracts save valuable time and money, and minimize hassle
 when a product or system malfunctions. JD Power found that "one in 10
 consumers report some kind of problem with their major appliance." With a
 service contract, consumers typically have 24-hour access to a network of
 highly-qualified, pre-screened service technicians or prompt replacement
 resources ... so few problems require a service visit.
     Additional benefits include:
     -- Protection for failures caused by power surge and normal wear and tear;
     -- Coverage for batteries and bulbs (a projection TV replacement bulb, for
 
        instance, can cost $300 or more);
     -- Protection  for accidental damage from handling;
     -- Maintenance benefits including laser cleanings for DVD players;
     -- Trouble shooting, repair, and support for computers, printers,
        networking equipment, telephones, gaming equipment, etc.
     -- No advance payment, "claims adjustments," deductible for parts and/or
        technical labor
     The SCIC wants consumers to know that a service contract is not an
 insurance product. Benefits of a service contract are triggered as a result
 of product failure that is due to a defect in materials or workmanship, and
 sometimes wear and tear.
     Established in 1989, the SCIC (http://www.go-scic.com) is a national
 trade association that works with lawmakers nationwide to develop fair and
 uniform regulation to protect consumers and the industry. SCIC member
 companies provide the majority of service contracts for electronic
 products, appliances, homes, and motor vehicles offered in the U.S.
 
 SOURCE Service Contract Industry Council