Service Contract Pricing: Smart Home Cameras:
The average smart home camera protection plan cost 18% of the total product price. Plans provided by regional retailers tended to cost a higher proportion of the product price, though the outliers were not as extreme as we saw for other electronics.
There's a wide range of smart home devices on the market these days. There are smart thermostats, speakers, lights, vacuums, carbon monoxide detectors, coffee makers, scales, toilets, bidets, and toothbrushes. It seems that every electronic and appliance out there claims to be "smart" these days.
We found that the most prevalent use of smart home devices were for security and surveillance, a phenomenon that took off about a decade ago with the rise of the smart doorbell. For this installment in our "Service Contract Pricing" series, we've found 221 unique extended service contracts for smart home cameras, including both doorbells and security cameras.
The 221 protection plans represent 11 different obligor/ administrator teams, seven underwriters, and 10 insurance groups. The average smart home camera service contract cost 18% of the total product price. The most common service contract duration was three years, followed closely by two-year plans.
Methodology
The 20 online retailers we surveyed were: Adorama, Amazon, B&H, Best Buy, BJ's, BrandsMart, BuyDig, DataVision, eBay, Electronic Express, Home Depot, HSN, Lowe's, Micro Center, newegg, P.C. Richard & Son, QVC, Target, Tech for Less, and Walmart.
We gathered these data by finding one smart doorbell and one smart security camera or camera set at each of the following price points: $50, $100, $200, $300, $500, and $1,000. Doorbells tended to max out around $300, and not all online retailers sold security camera sets at the higher price points.
We gathered fewer data points on sites that did not offer service contracts for all of their smart home cameras. We did not gather data for any used, refurbished, or open-box smart home devices, only for new, factory-sealed products. However, we noted that Tech for Less and Adorama both offered service plans for used products.
Survey Results
Figure 1 shows the breakdown of the types of smart home cameras included in this survey.
Figure 1
Types of Smart Home Devices Surveyed
139 of the service plans were for smart security cameras, 78 plans were for smart doorbells, and another four plans were for doorbell and camera sets.
The smart home cameras were from 30 different brands: Aiphone, Alibi, Anran, Aosu, Arlo, Axis, Blink, Bolin Technology, Dahua Technology, Digital Watchdog, Enabot, Eufy, Eve, Google, Lockzo, Lorex, LuckyBliss, Lumens, Marshall Electronics, Night Owl, Reolink, Ring, SimplySmartHome, Toucan, TP-Link, Ubiquiti Networks, Veatool, Wyze, Xtreme Cables, and Zosi.
The most prevalent brand was Ring, with 43 data points. The next most common was Lorex, with 33 data points.
Figure 2 shows the price ranges of the smart home devices surveyed.
Figure 2
Price of Smart Home Cameras Surveyed
61 units were between $0 and $100, 58 were between $100 and $200, 28 were between $200 and $300, 35 were between $300 and $500, 27 were between $500 and $1,000, and 12 were over $1,000.
The minimum product price was $23 for a Night Owl security camera, sold by P.C. Richard & Son, and the maximum was $6,395 for a set of 20 smart surveillance cameras from Bolin Technology, sold by Adorama.
The median product price was $199, and the average product price was $423.
Now, before we take a look at some statistics about the 221 smart home camera extended warranties we found, let's discuss the obligors, administrators, underwriters, and service networks behind the 20 different online retailers in this survey.
Service Contract Administrators
Allstate was most common obligor/ administrator/ underwriter team behind the extended warranties offered by the online retailers in this survey. B&H, eBay, Home Depot, QVC, Target, and Walmart sold Allstate plans, and BuyDig and HSN sold SquareTrade-branded plans.
The extended protection plans sold by each of these eight online retailers have the administrator CE Care Plan Corp., administrator SquareTrade Inc., and underwriter Allstate Insurance Company. B&H and BuyDig were the only two of the eight to sell Allstate plans that cover accidental damage from handling (ADH).
Two retailers, Amazon and BJ's, sold plans provided by obligor and administrator Asurion, with insurance underwriter Continental Casualty Company.
Two retailers, DataVision and Tech for Less, used plans provided by obligor and administrator Consumer Priority Service (CPS). The DataVision plans covered ADH, but the Tech for Less plans did not.
Best Buy sold Geek Squad plans, which used Best Buy's own service network, and obligor, administrator, and underwriter AIG. The Geek Squad plans in this product category did not cover ADH.
Adorama sold plans provided by obligor and administrator Extend Warranty Services Corp., using underwriter Continental Casualty Company. All the of the Adorama Protect Powered by Extend plans covered ADH.
Lowe's sold plans provided by Assurant, that use obligor and administrator Federal Warranty Service Corp., and underwriter American Bankers Insurance Company of Florida.
Micro Center also sold Assurant plans, using obligor National Product Care Company, administrator Micro Electronics, Inc. d.b.a. Micro Center, and underwriter Virginia Surety Company, Inc. Micro Center provides its own service network and administrates its own extended warranty plans, using Assurant as the underwriter, whereas Lowe's uses Assurant for all three roles.
Regional Florida retailer BrandsMart sold plans provided by Arch Capital Group, with obligor First Shield Consumer Service Corp., administrator ProtectALL USA, LLC, and underwriter Arch Insurance Company.
Newegg sold plans provided by obligor and administrator Likewize Device Protection, LLC, using underwriter Universal Underwriters Insurance Company, which is owned by Zurich American Insurance Company.
And then there were two regional retailers with national online stores, P.C. Richard & Son, in New York, and Electronic Express, in Tennessee, that were the obligor and administrator of their own extended warranties.
Service Contracts Surveyed
Now that we're familiar with their providers, Figure 3 shows the lengths of the 221 extended warranties we found in this survey of the online offerings.
Figure 3
Length of Service Contracts Offered
We found seven one-year plans, and 88 two-year plans. There were 96 three-year protection plans, 27 four-year plans, and three five-year plans.
Figure 4 shows the start date of the extended warranty plans. The vast majority started at the date of purchase, but plans from three online retailers started after the manufacturer's warranty expired.
Figure 4
Service Contract Start Dates
200 of the extended warranties in this survey started at the date of purchase, while 21 started after the product warranty expired.
These 21 extended warranties came from three online retailers: BJ's, provided by Asurion, Tech for Less, provided by CPS, and newegg, provided by Likewize.
Figure 5 shows which of the 221 plans covered accidental damage from handling (ADH). None of the warranty extension plans covered ADH.
Figure 5
Is Accidental Damage Covered?
58, or 26%, of the extended warranties covered ADH, while 163 did not.
The plans that covered ADH were: Adorama Protect Powered by Extend, Allstate Drops & Spills Protection Plan, sold by B&H, SquareTrade Accident Protection, sold by BuyDig, and Accidental Protection from CPS, sold by DataVision.
One- and Two-Year Service Contracts
The following three charts show the prices of the 221 protection plans, compared to the corresponding product prices, as percentages.
Figure 6 shows plan price as a percentage of product price for the 95 one- and two-year extended warranties.
Figure 6
One- and Two-Year Service Contracts:
Price of Service Contracts Offered
(as a percentage of product price)
At the low end of the spectrum, there was a $190 two-year Adorama Protect Powered by Extend plan, with ADH protection, for a $6,395 security camera set (3%). While this plan cost the lowest percentage of the product price, this was actually the most expensive one- or two-year extended warranty we found.
On the high end, there was a $15 two-year P.C. Richard & Son Extended Protection Warranty, for a $23 security camera (65%).
The next-highest percentage data point was an $18 Electronics HSN Protection Plan, provided by Allstate, for a $55 security camera (33%).
The average one- or two-year extended warranty cost 15% of the smart home device price. 63 of the smart home cameras had plans that were below average, and 32 had plans that were above average.
The least expensive one- or two-year plan was a $4 two-year Walmart Protection Plan, provided by Allstate, for a $36 smart doorbell (11%).
Three-Year Service Contracts
Figure 7 shows plan price as a percentage of product price for the 96 three-year extended warranties in this survey.
Figure 7
Three-Year Service Contracts:
Price of Service Contracts Offered
(as a percentage of product price)
At the low end is again online retailer Adorama. In fact, the lowest percentage was the $220 three-year Adorama Protect Powered by Extend plan offered for the same $6,395 smart security camera set we highlighted in our discussion of Figure 6 (3%). Once again, this was the most expensive three-year plan, while costing the lowest percentage of the product price.
At the high end is a $20 three-year ProtectALL Protection Plan for Security Equipment, from BrandsMart, for a $50 smart security camera (40%).
The next-highest data point was a $21 three-year Electronics HSN Protection Plan, provided by Allstate, for a $55 smart security camera (38%). This is also a product we highlighted in our discussion of Figure 6.
The average three-year smart home camera extended warranty cost 19% of the product price. 57 plans were below average, while 39 plans were above average.
The least expensive three-year plan was a $3 Allstate Protection Plan, sold by eBay, for a $31 smart home security camera (11%).
Four- and Five-year Service Contracts
Figure 8 shows the price pairings for the 30 four- and five-year extended warranties.
Figure 8
Four- and Five-Year Service Contracts:
Price of Service Contracts Offered
(as a percentage of product price)
Amazingly, the same product was at the low end of each of our three duration categories; the plans all cost the lowest percentage of the product price, but were the most expensive plans in their length category. In this category, there was a $280 four-year Adorama Protect Powered by Extend plan, for the $6,395 set of 20 smart security cameras (4%).
In all three categories, the next-lowest product was a $3,999 set of 30 smart security cameras, also sold by Adorama. The four-year plan cost $216, 5% of the product price.
At the high end was a $25 four-year ProtectALL Protection Plan for Security Equipment, sold by BrandsMart, for a $50 smart security camera (50%).
The average four- or five-year protection plan cost 22% of the total product price. 16 plans were below average, while 14 were below average.
The least expensive plans were two $9 four-year Geek Squad Smart Home Protection plans, sold by Best Buy and provided by AIG, for a $35 smart doorbell (26%), and a $30 smart security camera (30%).
