Sometimes a service policy is worth it.

In general, I advise against buying service policies. Companies sell service policies because they are profitable on the whole... the house always wins. Especially for new toys you buy under warranty, the service policy is really just extra money you're giving the vendor because you feel like you didn't pay enough for your new toy.

While there ain't no such thing as a free lunch, sometimes you can get a good discount on the blue-plate special. Our refrigerator recently decided it was tired of keeping our food cold and needed a break. A 7-year-old Kenmore Elite, I felt it was a bit early for it to retire so I did a little research. Based on the symptoms, troubleshooting guides indicated that the problem was either quite inexpensive or the most expensive problem a refrigerator can have, so bet on it being the $25 start capacitor/overload relay assembly (and lost.)

Per the collective wisdom of the troubleshooting guide, if it wasn't the start cap it was the compressor itself. My first surprise was that many companies marketing themselves as appliance repair services don't work on the refrigeration system of refrigerators. I guess they just fix icemakers and replace thermostats... they can't be bothered to maintain a license to handle refrigerant apparently. When I finally got an appointment, it was 4 days out. (This is when it's really nice to have a "beer fridge" so we didn't lose our entire inventory of perishable food.)

I had plenty of time to research the state of the refrigerator market. It turns out that nice bottom-freezer refrigerators are not bargain goods, and viable substitutes for mine were $1600-$2000. I was not enthused. I remembered that Sears offers 12-month service policies on appliances less than 10 years old, though, and thought it was worth a call. Sure enough, I could buy one. Here's how it works:

For my refrigerator, they offer a 12-month service policy for $250 that covers repairs (trip-charge, parts AND labor) up to $500 per incident. If the repair costs more than $500, you can opt to pay the rest out of pocket or apply $500 to the purchase of a replacement at Sears. Since the guesstimates I had heard for replacing the compressor ranged from $400-$600, this seemed like the right move.

The total for the repair ended up being $622, so for $397 ($250 for the service policy plus $122 for the excess on the repair plus $25 for the part I bought to troubleshoot the problem initially) I got a $622 repair AND 12 months of coverage should the repair work turn out to be less than perfect. I think that's a reasonably good outcome.