Worked examples / Protection

Appliance service plan

A 3-year plan on a fridge. One in five needs a repair, at about $350.

Skip it

You could cover this yourself, and on average it costs you $110 more than it returns.

You pay$180for certain

You get back$70on average: 20% of $350

For every $1 you pay, you get back $0.39 on average.
The price would be fair if the chance were 51%. You put 20%.
A $350 bill is within the $1,000 you said you could handle.

Put in your own numbers

This is a worked example with illustrative figures, not data about any real person or company. Change any of them in the calculator and the answer changes with them.

How this answer was worked out

You pay	$180
Chance x payout	20% x $350 = $70
Back per $1 paid	$0.39
Break-even chance	$180 / $350 = 51%
Costs more than it returns by	$110

Every formula is written out on the formulas page.

What the calculator asks you

Price of the plan
Chance of a repair
Cost of the repair
A surprise bill you could handle

Open the calculator

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Is it worth it?The calculator this example comes from
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How this answer was worked out

What the calculator asks you

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