If you’ve ever shopped at Best Buy, Office Depot, or any other retailer where the sales associates all wear polo shirts in the same color, then you know what an Extended Service Contract is — it’s that piece of paper covered with tiny print that you agree to buy for $69.99 because you’re so happy you’re saving $40 the price of your new digital camera. According to WarrantyWeek.com, American consumers spend approximately $15 billion on Extended Service Contracts, or ESCs, each year.

In theory, you’re not just buying an expensive piece of paper, of course. You’re protecting your investment. Buying peace of mind, as you’re doing the prudent thing now to avoid headaches and unexpected expenses in the future.

In practice, well….let’s say you don’t buy an ESC. Two weeks after your manufacturer’s warranty expires, your camera contracts a Stage IV case of LCD touch display… More…