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What this calculator does
This calculator compares the cost of an extended warranty to the expected value of repairs. Most extended warranties are not worth the price.
The math
Expected claim value = claim probability × average claim cost. Expected value = expected claim value − warranty price. Break-even = warranty price ÷ claim probability.
Worked example
A $250 warranty with a 15% claim chance and a $300 average repair has an expected value of about −$205. The break-even repair cost is $1,667.
Why this matters
High-fee products are designed to look small per week and huge in total. This calculator exposes the full cost so you can compare it to real alternatives.
Methodology and transparency
This page publishes the exact formula used to compute the result, so you can verify it in a spreadsheet or check the assumptions against your own situation. The worked example uses the tool default inputs; change any number and the result updates live in your browser. No data is sent or stored.
Common questions
Are extended warranties ever worth it?
Rarely. They are profitable for sellers because expected claims are usually far below the price.
What is expected value?
It is the average outcome over many identical warranties. A negative expected value means you lose money on average.
When might a warranty make sense?
If a single repair would cause a financial emergency and you cannot self-insure, a warranty can be peace of mind.