Warranty insurance covers repair or replacement expenses for items like appliances, vehicles, and electronics. It may be sold by insurance companies or manufacturers. Exclusions apply, and it’s important to compare costs and coverage. Consumers should consider if the free warranty is sufficient and not feel pressured into buying.
Warranty insurance is an insurance product designed to provide coverage for expenses associated with the repair or replacement of covered items. It’s sold for things like appliances, vehicles, and electronics as an added assurance for consumers. A number of insurance companies offer this product, and it is sometimes also available from manufacturers, often at a discount when people purchase warranty insurance when purchasing a new product.
With warranty insurance, if the product is damaged or stops working properly, it can be replaced or repaired, depending on the situation, and the insurance will pay for it. People may have to pay upfront and then claim reimbursement, or the insurance company may cover repairs directly, usually by requiring people to work through authorized repair shops. In the case of warranty insurance provided by a manufacturer, the manufacturer often handles the service in a repair center that it operates.
Typically, there are exclusions structured into a warranty insurance policy. If people use the item negligently, they may not get coverage. Likewise for some types of damage, such as damage caused by natural disasters, unless special coverage has been purchased. With some products, attempts to self-repair will also void your insurance policy, and special seals are usually designed to make tampering obvious to technicians when working on the product.
Depending on the product, warranty insurance can be a good financial decision or a waste of money. It’s important to get quotes from multiple sources to get an idea of the costs involved and see what’s covered. When considering purchasing warranty insurance, people may want to consider the free warranty usually offered with the product; may be sufficient to cover their needs. If you want an extended warranty, consider whether it would be cheaper to pay out-of-pocket for the replacement than to make the insurance payments.
In the case of warranty insurance offered by manufacturers and retailers, consumers sometimes feel pressured into buying the product. When researching a major purchase, it can be a good idea to look into warranty options, in order to be armed with that information in conversations with a salesperson. If a better insurance product is available from another source, consumers may ask for competitive rates or strongly indicate that they are not interested in the seller’s product.
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