What is warranty insurance?
Do you recall the last time you went into the showroom to buy a domestic appliance? Or perhaps you bought it online. In either case, the retailer is almost certain to have offered you the option of an “extended warranty”.
In the heat of the moment, you might have decided to say yes. Even worse, in the heat of that same moment you might have said yes without fully understanding quite what you were agreeing to.
In a press release we issued earlier this year, here at KAPUT Insurance we warned that as many as 70% of consumers failed to appreciate the way in which warranty insurance works and that the age group most likely to have this gap in their knowledge are 45 to 54 year olds.
These statistics present something of a worry since inappropriate or ineffective warranty insurance on any domestic appliance might too easily represent a financial loss – indeed the Money Saving Expert insists that many such policies sold by shops for electrical and white goods are “a complete waste of money”.
Where might it all go wrong?
A major area of confusion, which may result in the purchase of inappropriate cover, centres on the difference between a service plan for your appliance and warranty insurance:
- the store selling your domestic appliance might be offering a service plan;
- just as the term suggests, this provides for the inspection and any necessary servicing of the appliance at predetermined intervals;
- these intervals might be as far as one year apart – and if your appliance goes kaput within each service interval, you may have no recourse to repairs, the replacement of faulty parts or the cost of any labour involved;
- what distinguishes warranty insurance is that it is genuinely an insurance contract;
- in return for the premium you pay, the insurer provides a warranty for the repair of the insured product if it breaks down or develops a fault;
- warranty insurance arranged by us here at KAPUT goes several steps further by providing even more security;
- if one of your appliances covered by such a warranty breaks down, we arrange for a fully trained and qualified engineer to visit you home and effect the necessary repairs;
- there is no call out fee, you are not charged for the labour or for any replacement parts – and unlike the vast majority of insurance claims, there is no excess to pay;
- if it proves impossible to repair the appliance in question, we either replace it with an identical make and model or contribute towards the cost of your buying a new one – depending on the type of appliance involved and the level of cover you have arranged;
- each policy carries a claims limit, but within that figure an unlimited number of call outs are provided each year;
- warranties provided by KAPUT insurance also carry some attractive discounts – whether you choose to include a range of your domestic appliances (up to ten) under the same policy or whether you buy 12 months cover for the cost of just 10 months of premiums.
If you are faced with the choice of an annual service plan or warranty insurance, therefore, you might want to look closely at the wide ranging benefits offered by the latter.
In a press release we issued earlier this year KAPUT warned that as many as 70% of consumers failed to appreciate the way in which warranty insurance works and that the age group most likely to have this gap in their knowledge are 45 to 54 year olds.