Does Costco Warranty Cover Accidental Damage? Allstate Plans and Claims

Costco’s free warranty does not cover accidental damage. If you drop a laptop, crack a TV, or spill coffee on a tablet, neither the complimentary two-year warranty extension nor the standard satisfaction guarantee is designed to pay for it. Accidental damage coverage exists only through a paid Allstate Protection Plan on certain products, or possibly through a benefit on the Costco Anywhere Visa card. Whether you’re covered depends heavily on what you bought.

What Costco’s Free Warranty Actually Covers

Through its Technical and Warranty Services program, Costco extends the manufacturer’s warranty to two years from the date of purchase on televisions, projectors, computers (excluding touchscreen tablets), and major appliances.¹ It’s free with membership and includes technical support for computers.

The program explicitly excludes physical damage and liquid damage, along with data backup and software replacement.¹ Coverage applies to mechanical and electrical failures during normal use. A laptop whose drive dies on its own qualifies. A laptop you knocked off a table does not.

Does Costco’s Return Policy Help With a Broken Item?

Costco’s satisfaction guarantee is generous, and the official policy language does not directly address items the customer accidentally broke.² The policy does note that Costco accepts returns on items that are “broken,” and that damaged or defective non-food returns still receive a refund before the item is liquidated, returned to the vendor, or disposed of.³

Category limits still apply. Electronics — TVs, computers, tablets, cameras, and cell phones — must be returned within 90 days of receipt, and major appliances have the same 90-day window.² Once that window closes on these categories, the satisfaction guarantee is off the table and you’re back to warranty coverage or a protection plan.

Allstate Protection Plans and Accidental Damage

The main path to accidental damage coverage on Costco purchases is the Allstate Protection Plan, the paid extended warranty Costco sells (formerly SquareTrade). These plans extend coverage beyond the free two-year warranty and can run up to five total years on qualifying products.⁴ Whether accidents are covered depends on the product.

Products That Can Get Accidental Damage Coverage

Allstate’s Accidental Damage coverage, called “AD” in the plan documents, protects against damage from drops, spills, and liquid exposure during normal handling and use.⁵ The categories where it applies:

Laptops and desktop computers: AD is included in the plan.⁵
Cell phones: AD is included by default on standalone Allstate Protection Plans for phones. Cell phones are excluded from the separate Whole Home Electronics Protection Plan.⁶⁷
Tablets, headphones, smartwatches, gaming consoles, VR headsets, e-readers, and other portable electronics: eligible for AD under the Whole Home Electronics Protection Plan.⁷
Other electronic devices: AD may be available if it was offered and purchased at the time of sale.⁵

Products Left Out

Two big categories don’t get AD at all:

Televisions. Allstate plans for TVs cover only mechanical and electrical failures plus defective pixels. AD is not an available option, and the plan terms explicitly exclude accidental damage, including cracked screens. Break a TV screen and neither the free warranty nor the paid plan will help.⁶
Major appliances. Allstate plans for appliances cover electrical and mechanical failures but explicitly exclude accidental damage, intentional damage, and normal wear and tear.⁸

What AD Coverage Excludes

Even when accidental damage is covered, the coverage has boundaries. AD pays for repair or replacement when damage results from drops, spills, or liquid exposure during normal handling.⁵ It does not cover:

Theft or loss
Reckless or abusive conduct
Cosmetic damage that doesn’t affect functionality, such as scratches, dents, or color changes
Damage during shipping between you and a service center
Intentional damage

There’s also a financial ceiling. Total payouts across all claims cannot exceed the original purchase price of the product. Once Allstate has paid that amount in repairs, or once it provides a cash settlement or replacement, the plan ends. The plan’s “No Lemon Policy,” which triggers a replacement after three repairs for the same problem, does not apply to accidental damage claims.⁵

Under the Whole Home Electronics Protection Plan specifically, claims are capped at $2,000 per incident and $5,000 over the plan’s term, though there is no limit on the number of claims you can file.⁷

Filing an Accidental Damage Claim

If you have an Allstate Protection Plan with AD coverage, the claim process works like this:

Wait 60 days after purchase. Allstate asks customers not to file claims on items bought within the last 60 days, to allow time for order processing.⁹
File online or by phone. Claims can be submitted at AllstateProtectionPlans.com or by calling 1-877-927-7268. Have your receipt and the damaged item available.¹⁰
Submit documentation. You may need to provide photos, video, or other evidence of the damage.¹⁰
Resolution. Allstate will either repair the product, provide a replacement of similar quality and functionality, or issue a cash settlement or gift card for the amount paid. Shippable items get a prepaid shipping label. TVs over 37 inches get on-site service. Covered repairs are supposed to be completed within five business days of the service center receiving the item.¹⁰

Back up your data before sending a device in, because repairs can result in data loss.¹⁰ Consumer experiences with the claims process are mixed: some describe it as quick and painless, others report delays, reimbursements paid as store gift cards rather than cash, and communication difficulties when claims sit between the retailer and Allstate.¹¹

The Costco Anywhere Visa Card as a Backup

One more avenue is worth checking. The Costco Anywhere Visa Card by Citi includes a Damage & Theft Purchase Protection benefit that may cover repairs or reimbursement if items bought with the card are damaged or stolen within 120 days of purchase (90 days for New York residents).¹² This is a card benefit, not a Costco program, so the terms, exclusions, and claim process are set by Citi. Costco’s own tech support page suggests contacting your credit card provider to see whether the benefit applies.¹³

Coverage by Product at a Glance

Laptops and computers: not covered by the free Costco warranty. Covered by Allstate Protection Plans that include AD. Possibly covered by the Costco Visa benefit within 120 days.
Cell phones: covered by standalone Allstate Protection Plans, with AD included by default. Not eligible for the Whole Home plan.
Tablets and portable electronics: covered under the Whole Home Electronics Protection Plan for drops and spills.⁷
Televisions: not covered for accidental damage under any Costco warranty or Allstate plan.⁶
Major appliances: not covered for accidental damage. Allstate plans cover only mechanical and electrical failures.¹⁴

Before you leave the checkout line with a protection plan, ask whether the Allstate plan on offer includes AD coverage for that specific product. If AD is not on the list of covered perils, no amount of plan coverage will help once the item hits the floor.

1
Costco Tech Support. Does Costco Offer an Extended Warranty on Products
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Costco Customer Service. What Is Costco’s Return Policy
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Tasting Table. What Happens to Returned Costco Items
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MarketWatch. Costco Home Warranty Review
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SquareTrade. Allstate Protection Plan Terms and Conditions – Costco
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Costco. Costco SquareTrade Terms and Conditions
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SquareTrade. Allstate Protection Plans at Costco
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This Old House. Costco Home Warranty Review
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SquareTrade. Allstate Protection Plans – File a Claim
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SquareTrade. Costco Allstate Protection Plan Terms – Puerto Rico
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ConsumerAffairs. SquareTrade Reviews
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Citi. Costco Citi Credit Card Benefits
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Costco Tech Support. My Computer Has Physical Damage – Is It Covered Under Warranty
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Sacramento Bee. Costco Appliance Protection Plans