Pennsylvania Insurance Department Urges Holiday Shoppers to Understand Existing Insurance Coverage and Store-Offered Warranties

Nov 18, 2010, 12:15 ET from Pennsylvania Department of Insurance

HARRISBURG, Pa., Nov. 18, 2010 /PRNewswire-USNewswire/ -- When shopping for the holidays, it is important for consumers to understand their existing coverage for damage, theft or loss before buying extra protection at the check-out, the Insurance Department said today.

Consumers should understand that a warranty is not insurance and does not cover damage in the way a homeowners or renter's policy might.

"Pre-holiday sales are a great time to find discounts on popular items, especially costly electronics, but it's equally as important to insure your investment," said acting Insurance Commissioner Robert L. Pratter. "Consumers should know what their existing insurance covers before purchasing additional protection, like an extended warranty.  

"The first thing to check is your homeowners or renter's policy. Find out what household items are covered under your existing insurance and if there are exemptions. Your insurance usually protects against theft or damage, though there may be limitations on what is covered."

The amount and the nature of coverage may vary between policies. If a policy has actual cash-value coverage, the consumer will be reimbursed for the current cost of the property at the time of the claim, minus the deductible. If there is replacement-cost coverage, the consumer will be reimbursed for the full value of the replacement item.

Know the stipulations of a policy or talk to an insurance agent before making a purchase to avoid doubling-up on coverage. Ask about coverage amount limits to make sure any new purchases don't exceed the policy threshold. Certain valuables might be better covered with an insurance rider or additional policy, depending on the circumstances.

"The best rule of thumb is to know your total insurance, credit card and manufacturers' warranty picture before making a decision to buy more product-oriented insurance or warranties," said Pratter. "This should include how much you are willing to pay out-of-pocket before collecting on these add-on offerings."

A manufacturer's warranty offers a certain kind of guarantee to the quality or performance of an item for a specified time period. Some are lifetime warranties; others are one- or two-year warranties that cover malfunctions or repair needs. Because warranties vary by product, model and manufacturer, it is important to always read the fine print.

Some retailers offer extended warranties that typically extend the original manufacturer's warranty or provide additional perks and services, such as in-store repair. Unlike a homeowners or renter's policy, warranties may not cover the cost of replacing the item if it is stolen, but may cover certain kinds of damage to the product or product malfunctions.

Also, some credit cards cover merchandise purchased on the card that has been accidentally damaged or stolen. The protection typically lasts 90 days from the date of purchase. There may be a minimum amount requirement for a protected purchase to qualify for a refund.

To learn more about insurance claims and coverage, visit  or call the department's toll-free consumer hotline at 877-881-6388.

Media contact: Rosanne Placey or Melissa Fox, 717-787-3289

SOURCE Pennsylvania Department of Insurance