Home appliances seem to have the most intuitive timing on when to break down. Your refrigerator breaks down in the middle of a summer heatwave after you just scored a huge win at the grocery store and stocked your freezer full of enough meat to last you 2 years. Or your washing machine leaks water all over your new floors throughout the night before a big interview- and your perfect interview outfit was inside and full of soap. Or how about your furnace going out in the middle of the night during a snowstorm- on a holiday.
All humor aside, appliances seem to break down at the most inconvenient times. While a warranty can’t counteract the inconvenience of timing, it may help you to recoup some of the financial loss you would be facing in the event of a needed repair or a replacement.
When talking about appliance warranties, there are a couple of different common options to choose from.
When you purchase an appliance from a retailer, they will typically offer you an extended warranty that you can purchase to “protect” your investment. The usefulness of the warranty will depend on the guarantees and coverages that are extended as well as the price in comparison. If the warranty amount sounds high in relation to the appliance you are purchasing, it probably is. And if the coverage is very limited, you would likely be better off skipping it. But as always, read the fine print and make an educated decision.
Another type of appliance warranty to consider is a “home warranty” plan offered by a number of private companies. This coverage should not be confused with a homeowners insurance policy that covers your home and possessions (depending on the type of coverage you purchase.) The homeowner’s policy is vital and should be a key component in your insurance lineup for personal protection.
The home warranty is an optional coverage that varies in protections. Home warranties will cover a number of things and extra coverages can typically be purchased in addition to the main policy. These warranties are common when purchasing a home and transferring ownership. Most basic plans include appliances and some plans will require an upgrade to cover more. The usefulness of these plans will vary depending on what coverages you buy, which company you are covered by, and how much the policy costs you on a yearly basis.
The catch with a lot of home warranties is, to have an appliance repaired or replaced, you must use a contracted repair company and go through the warranty company for help. The repair company availability will vary and you will also be charged a “call out” fee that will be outlined in your policy information. The company will attempt to repair the appliance and if they can’t you may be eligible for a replacement. Again, every company will differ in their guidelines and offerings, so it is important to understand your plan and what the company will do for you in the event that you need to use it. Many homeowners believe the coverage offered is more inclusive than it is in reality, and are disappointed when they discover they not only paid out of pocket for a policy to protect their appliances and systems but now they are out of pocket for a repair or replacement that is not covered. For the majority of policies, your appliances must be in working order at the time of warranty purchase in order to be covered- so don’t think you can wait for an appliance to break and grab coverage after the fact. It doesn’t work that way.
Regardless of what you choose to do, be sure to read through the details and decipher what is covered and what is not, and whether the policy is a sound financial decision for your family.