When you buy a brand-new appliance from a reputable retailer, you will usually get a warranty which will typically cover the cost of any repairs or faults to the appliance for anything from the first 60 days to 12 months.

At anytime before the warranty expires, you will have the choice of buying an extended warranty which will continue to cover these costs for the appliance for any period up to as much as 5 years.

However, data from consumer reports show that only 40% of refrigerators need repairs within their first five years of use. For dishwashers, only 30% need repairs during that same time, and for clothes dryers it is only 20%!

Alternatively, at any time, you can buy an appliance protection plan. Read on to learn about extended warranties and appliance protection plans.

Why buy extended warranties?

The reality is that most appliances don’t need repairs until they get much older than the periods extended warranties cover.

Most homes have 12 major appliances, so you need to make sure you take up the extended warranty offer before the original warranty ends, for each of the appliances, which will all occur at different times.

That’s lots of work for you, and lots of paperwork, plus a different cost for each warranty.

And the reality is that you are unlikely to ever need to claim on any of the warranties.

In short, they are a great revenue earner for retailers who sell these because they so rarely ever face a claim.

But many appliances will eventually break down and need repairs, so do you just have to wait until that occurs and face the repair cost at that time?


There is an alternative possibility.

Appliance protection plans

There are many companies that offer these policies, some policies have slight name variations, but many policies have a range of options so that you can choose a policy that best fits your needs.

You can buy one of these plans at any time, and it will cover the cost of repairs on all the appliances covered by the policy.

Sometimes, that will include all appliances in the home, or you might take out a policy that covers just 5 specific kitchen appliances, or you can specifically pick which appliances in the home you want covered.

If you have a brand-new refrigerator and oven, you might choose not to cover those items until they are 5 years old, then you might be able to add them to your policy. It will depend on the policy you have chosen and the flexibility to add or remove appliances or change to other policies with the same company.

Policies may have a limit per claim and a limit to the dollar value you can claim each year. Different limits and the different policies and how many appliances are covered will determine differences in the cost of the plan.

Like most insurance policies, you can also choose an excess (or deductible).

For example, if you  choose an excess of $25, and the policy has the largest claim of $250, and the repair costs were $280. You would be paid $280 – $25 excess = $255, but as the largest claim/repair is only $250, you would only be paid $250.

If you had chosen the highest excess, your premium would be approximately half the price of choosing a $0 excess.

Choosing a policy with a larger maximum claim per repair would of course be more expensive.

If you have appliances that are over five years old, you should consider covering them with an appliance protection plan and structure a plan that fits you needs and your budget. If you replace an older appliance with a new appliance, you could remove it from the plan until it gets older.

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