Domestic Appliance Insurance – Do You Really Need It?

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Every new appliance comes from the manufacturer with a basic factory warranty. This agreement states that the manufacturer will repair or replace the appliance for a limited period of time if it breaks down. But once this warranty expires you have nothing to protect yourself from expensive call out charges, or parts and labour costs, should something go wrong. On one hand, if your appliance is relatively new chances are that it probably will not need any special repair in the next couple of years. But as it gets older, the likelihood of repair is eminent. Therefore domestic appliance insurance that covers older appliances at a lower out-of-pocket cost to you is going to make more sense if your appliances have been around for awhile.

Before taking out any extended domestic appliance insurance look to see what the manufacturer’s warranty is giving you. How long is the warranty? What exactly does it cover?

Choose a plan that makes the most sense, based on your needs and your specific circumstances. If you feel that there will be a good chance that you appliance will need repair in the near future, look at policies with broad coverage and low deductibles. If your appliances are newer and you just want to have a little extra protection, you might be willing to pay more on a claim out of pocket in order to keep your premium down.

There are usually three types of domestic appliance insurance to choose from – extended warranty for each appliance (on it’s own), a special deal for a certain number of appliances, or a home warranty which covers all appliances in your home. If you have more than one or two appliances which you need to insure, then buying extended warranty for each unit separately  may turn out to be very expensive and not very practical. Companies usually have special deals that cover a certain number of appliances in your home, or all of them.

Read the extended warranty, especially the fine print, to understand the terms. You should know exactly what you are paying for and what to expect should your 3 year old throw your laptop in a bathtub full of water. Some warranties don’t cover all “accidents”. Some only cover a specific set of parts. It’s a good idea to understand the coverage period as well. You’ll pay more for a longer coverage period, which may make sense if you are planning on holding on to your appliance for a long time. But if you are not planning on keeping your appliance for the length of the coverage, then you’d me wasting your hard earned cash. Some insurance companies expect full payment upfront for the entire policy period, while others accept monthly payments – so make sure you understand the terms.

Some appliance insurers provide 24 hour service and guaranteed turnaround times on repairs and/or replacement. Others make no such guarantees in their policy. Sometimes the extended warranty will take care of the repair or the replacement of the major home appliance, but will charge you for the service charge of the technician. Other policies include everything. By knowing the limits and exclusions of your plan, it will be much easier to respond when an appliance emergency arises, and will save you from an unpleasant surprise when you are getting ready to file a claim.

One last note, don’t overpay for your extended insurance. A good rule to follow is not to pay more than 10-20% of the product price for an extended warranty to cover it.

So, is it worth getting domestic appliance insurance? At the end of the day, it cannot be denied that domestic appliance insurance can reduce your major home appliances repair cost effectively. The insurance works best if your major home appliances are aging and you want to settle with repairs if the company does not replace them. Although there has been some negative feedback, most people are satified with their domestic appliance insurance. If you have taken the time to read the policy and find out what exactly is covered, you should be fine.

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