Warranty vs Home appliance insurance

Which is better for your household, appliance warranty or home appliance insurance? Are they different? Yes, but sometimes it’s not easy to make the distinction.

What’s the difference between appliance warranty and appliance insurance?

Broadly speaking, an appliance warranty is offered by the manufacturer of a product. It guarantees that a product is free of defects that would inhibit or stop its efficient operation. This is normally for a finite period, often one year, on a new product.

This may be extended up to five years under the manufacturer’s extended appliance warranty package. This extended appliance warranty differs from the initial appliance warranty or guarantee. The extended appliance warranty provides for repairs to a product that becomes defective, in the extended warranty period, by covering the costs of parts, and sometimes labour and call out charges. Appliance warranty is product specific.

Home appliance insurance offers protection against unforeseen damage or repairs to domestic appliances. Home appliance insurance cover can be for one specific appliance. An example of this is washing machine insurance, which will protect you against repairs to your washing machine in the event of a breakdown. Or, it is possible to cover multiple appliances under domestic appliance insurance policies, commonly found when conducting an internet search under the headings of white goods insurance, electric appliance insurance, or kitchen appliance insurance.

This appliance cover is usually offered for a period of one to five years. The length of the insurance policy cover is dependent on the age of the domestic appliance you are covering. Many insurers offer a range of time scales for your appliance cover. The cost of these will vary, with discounts offered for policies greater than a year.

Remember, if you have an appliance warranty for your domestic appliance because you have purchased from new, or have extended your appliance warranty on an older product, with its manufacturer, you probably won’t need domestic appliance insurance or home appliance cover.

Appliance insurance policies will not pay out in event of breakdown if the domestic appliance is also covered by an appliance warranty.

Appliance warranty or home appliance insurance – which is the better solution?

There are pros and cons for both of these:

• Most manufacturer appliance warranty or guarantees, given with a new product, for a finite time span are included within the price of the product. They do not have an additional cost and therefore are worth having.
• Purchasing domestic appliance insurance for the first year of a new product is not usually cost-effective. Most domestic appliances will be covered by a free manufacturer appliance warranty for the first year. If the product breaks down in the first year the manufacturer will repair or replace it free of charge. You need to check the manufacturer guarantee carefully, to ensure there are no exclusions that will leave you vulnerable to hidden costs if your new domestic appliance develops a defect in this initial warranty period.
• Extended warranty offered by a domestic appliance manufacturer is often unwritten by a domestic insurance company and is by definition closer to the cover offered by a domestic appliance insurance policy.
• If the manufacturer offers you an extended appliance warranty, you need to find out what this will cost and what this covers.
  The cost and coverage of the extended appliance warranty should then be compared with a selection of domestic appliance insurance policies to make sure it is competitive, and the best solution for your appliance insurance needs.
• Some domestic appliance manufacturers offer cost-free extensions to their initial appliance warranty period of a year. This is usually dependent on the customer registering the product online, or by telephone, within a specified period after purchase.
• This type of extended appliance warranty may not have such a wide coverage as the cover offered by domestic appliance insurance. For example; parts may be free of charge, but call out and labour charges may still apply.
• Obviously, if this is a free extended appliance warranty, it is worth having, as long as you are aware of its exclusions and scope. However, you may still need to consider taking out appliance cover for your domestic appliances to cover call out and labour charges. You need to weigh up the possible call-out and labour costs against the cost of the domestic appliance insurance premium.
• The risk to household budgeting of an unexpected bill for a domestic appliance repair must be considered too.
• The inconvenience of being without an essential domestic appliance is also a factor to consider when working out the costs of domestic appliance insurance. Insurance companies normally have a list of authorised repairers, who give priority to their policyholders. So, it’s likely you will get your repair done quickly.
  -It may be prudent to take out insurance on all your eligible domestic appliances under one umbrella policy, that way, the appliances’ covered by the partial free appliance warranty will be covered at a lower additional cost.

So what should good appliance cover include?

• Protection against mechanical breakdown of your domestic appliance or appliances.
• Callout, labour and parts costs should be covered by the policy.
• Replacement of your domestic appliance, if it cannot be economically repaired within a realistic timeframe.

What exclusions should you be aware of?

• Age limit for product coverage.
• Limit on the number of claims under the policy.
• Cost ceiling on the amount paid out, for each claim and/or total claims.
• The limit, if any, on the number of products covered by a multiple appliance insurance policy
• Definition of acceptable time limit to be without your domestic appliance in full working order.

Appliance warranty provides the purchaser with a guarantee that the product is defect-free. If this proves to be wrong, the manufacturer agrees to repair or replace the product free of charge to the consumer.

Home appliance insurance provides protection for one or more domestic appliances when they are out of their initial warranty period. Unless the extended appliance warranty offered by the manufacturer is free of charge, it is worth considering a bespoke domestic appliance insurance policy. This will generally be wider in coverage, competitively priced and can be used for more than one domestic appliance, usually at a discounted cost.