According to conventional wisdom the best insurance policy is the one you never have to use. We buy fire, theft and flood insurance as a kind of bet against ever needing to cash in the policies. So are warranties and service contracts a kind of insurance? The only good answer is “Yes, but…”

If we start by looking at a Manufacturer’s Warranty we will see many similarities between a warranty and an insurance policy. Both types of protection are against unintended outcomes. With insurance an unintended outcome is an injury or a fire while with a warranty we are talking about a flaw in manufacturing or performance.

Warranties are different in very important ways though. A warranty has terms that are spelled out by the manufacturer or warranty provider. Terms can define how long the coverage is in effect, if coverage includes labor or just parts, or even if the coverage is adjusted for usage such as accumulated miles on a tire. In short, warranties are whatever the warranty party says it is.

With photo equipment a warranty covers flaws or failures caused by a fault in design, original parts or assembly. Warranties don’t cover drops, bangs, sand, grit, or water damage.

When it comes to photo equipment warranties, on new equipment the warranty period tends to be six months or one year long. Many times manufacturers will offer Extended Warranties. An Extended Warranty does just as the name implies, it extends the original warranty for a specified amount of time. For example, Nikon’s two-year Extended Warranty when added to the basic one-year warranty provides three total years of protection.

The last type of protection is a Service Contract. A Service Contract can come under many different names from as many different companies but they all have some core features in common. Service Contracts tend to cover damage as well as wear and tear. A Service Contract will go beyond what a manufacturer’s warranty covers and may even include repairs caused by water damage.

One key difference between most Service Contracts and an Extended Warranty is that a Service Contract starts from day one of purchase, not after the original warranty expires. Further they most often have to be purchased at the same time as the new equipment or within a few days of the purchase.

When it comes to Service Contracts or Manufacturer Warranty repairs there are a few things to keep in mind. First they don’t supply a “loaner” while your equipment is in the shop unless it is spelled out in the original agreement. Next, there may be fees imposed on the repair to offset shipping charges for the equipment or replacement parts. Then there is the repair time frame, it can take six to eight weeks on average to get your equipment back from repair.

Our advice is to purchase a Service Contract rather than an Extended Warranty if your equipment costs more than $300.00. Use the Service Contract coverage as a shopping consideration, who offers the most coverage at the best price? In some cases there are free check-ups or services included with the Service Contract purchase. For example, Mack Diamond Service Contracts for digital cameras include three free sensor cleanings over the three year coverage. Sensor cleaning service can range from $50 for minor cleaning and up to $120 for a good scrubbing, so the inclusion of three cleanings would be a value added point for Mack.

It should be noted that with some Service Contracts you don’t have to buy the camera and the contract from the same place! To use Mack as an example again, you can purchase the camera at one store and the Service Contract from another so long as the Contract is purchased and registered within 30 days of the camera purchase.

In summary, a Manufacturer’s Warranty is supplied with the equipment at no additional charge and covers defect or failure due to manufacturing problems. An Extended Warranty is often at additional cost and takes the basic coverage and offers a longer term. A Service Contract usually has a time frame that begins on day one, not after the Manufacturer’s Warranty expires. Service Contracts cover everything that the Manufacturer’s Warranty covers plus various levels of damage protection. Ask specific questions about what is covered or offered and use this information to help make your equipment purchase decision.