GreenUmbrella: If you must buy an extended warranty, buy this one

There's a new self-serve extended warranty program for consumer goods launching Saturday night: GreenUmbrella. Unlike the typical extended warranties you may get when you buy products, this is an umbrella plan: $9.95 a month covers nearly everything you own. It's a good deal when compared with other extended warranties, although that's not saying much.

The cool thing with GreenUmbrella is that if you are on the plan, you can just say, "No, thanks" when the drone at Best Buy tries to push the extended warranty on you. The GreenUmbrella program covers repairs to your computers, game consoles, cameras, refrigerators, TVs, air conditioners, etc. Anything less than $5,000 is eligible, and is covered for three years from purchase date.

To get a new purchase into the system, all you have to do is go online and enter the info about it. You don't need your receipts to register a product, but you will when you file a claim.

Repairs are handled by The Warranty Group, which maintains a network of certified repair shops for consumer goods. When you call in with a claim, ultimately you'll be routed to one of their providers for the repair or replacement of your item.

There are limitations, however. The service does not cover accidental breakage, doesn't cover your mobile phone, and doesn't cover products more than 3 years old. Also, keep in mind that all new products come with their own warranties. If you have a device that fails during the period of the warranty that comes with the product, GreenUmbrella might help a bit by offering a smoother experience through its service bureau, or by covering, perhaps, consumable parts (like a projector bulb) on a repair for a product whose native warranty only covers malfunctions.

But for the most part, the GreenUmbrella plan only covers products during their most healthy period--the two-plus years that fall between the product's in-warranty infancy (when it is most likely to fail), and its slip into creaky senescence when it's more likely to suffer wear-related problems or become obsolete. It's when you are most likely to need the plan that your products will not be eligible for its services.

GreenUmbrella GM Mike Balducci admits that "you do have a stigma associated with the extended warranty," although he believes it's due to the typical, pushy retail sales process. He has a point. Consumers are vulnerable during the extended warranty "sales minute" that comes during checkout, and they resent the hard sell, even if they later end up saving a bundle because they have a plan. It is precisely these sales minutes, though, that GreenUmbrella will be battling. Expect retailers to come up with reasons for consumers to buy their extended warranties anyway.

Balducci also points out that about one-third of products that break and that are under extended warranties don't get the coverage they deserve since the consumer has lost the paperwork or forgotten that a product is covered. With GreenUmbrella, the single plan should increase the redemption rate--and hopefully improve customer satisfaction.

In the service's favor--and this is a big deal--GreenUmbrella is a predictable and reasonable service if you ever expect any of your devices to break down during their first years. The plan, at $120 a year, could easily pay for itself if a major appliance like a refrigerator or laptop fails during its term.

Clearly, extended warranties are a gamble, and the odds are on the provider's side, not yours. That's why they're pushed so hard at retail (though not, we should note, at Costco): they're nearly pure profit for the seller. But if you spend a few thousand a year on electronics or appliances, this plan will provide peace of mind for a reasonable, and for a very small premium over your cash outlay.