Are Appliance Warranties Worth It?

How do extended warranties for appliances work?

An appliance extended warranty is a service agreement that provides coverage for repair and replacement of individual appliances listed in your contract. You can get this type of warranty from the manufacturer or dealer of your major home appliances before your manufacturer’s warranty expires to make sure there’s no lapse in coverage.

An appliance extended warranty is a service agreement that provides coverage for the repair and replacement of specific appliances listed in your contract.

Brian Jones, the vice president of marketing at appliance company ASKO, described how appliance extended warranties generally work. “Typically customers have the opportunity to purchase an extended warranty at the time of purchasing the appliance or within a specified period of time (i.e., 30 days, 60 days, etc.). This can be through the manufacturer, retailer or a third-party provider. Factors to look for in the terms include the duration of coverage, the scope of coverage and any exclusions.

“When it comes time to use an extended warranty, if you have one,” he explained, “the process is typically fairly straightforward. The policyholder files a claim, which then needs to be verified. The provider will confirm whether the issue qualifies for repair under the warranty, and if so, a technician is sent to diagnose and repair the issue if possible. Ideally there are no out-of-pocket costs at that point, although it is not uncommon for there to be a deductible or service fee, depending on the warranty.”

Appliance extended warranty vs. home warranty

An appliance extended warranty is an alternative to paying for a home warranty plan that covers the appliances you’re concerned about. These extended warranties help pay for the repair and replacement of home appliances, including refrigerators, stoves, dishwashers, washers and dryers. You can get this coverage from the original appliance manufacturer or vendor, or you can purchase it from a third party.

A home warranty provides bundled coverage for these home appliances as well as various home systems, depending on your plan. It pays for the cost of fixing or replacing a covered household item when it breaks down from wear and tear.

Appliance extended warranty coverage

If you’ve bought an appliance at a brick-and-mortar store, you’ve probably been asked by a salesperson if you want to go ahead and extend your warranty at the time of purchase. Typical appliance extended warranties cover individual major appliances like refrigerators, dishwashers, ovens, cooktops, water heaters and clothes washers and dryers.

Appliance extended warranty coverage differs depending on the specific warranty plan; some coverage lasts a short period, while other plans last years, and particular parts coverage and conditions vary. These contracts are often similar to the original manufacturer’s warranty — they just extend the period of time you’re covered.

» MORE: What does a home warranty cover?

How much does an appliance extended warranty cost?

The cost of an extended warranty depends on the type of appliance, the type of coverage, the warranty provider and your location. As of publishing, a typical appliance extended warranty costs between $25 and $50 per month. More expensive appliances will usually have a higher extended warranty cost than less expensive appliances.

Factors to consider when deciding on an appliance extended warranty

When deciding whether an appliance extended warranty is right for you, consider the following:

• Appliance age and expected lifespan: Older appliances are more likely to break down, making coverage more valuable.
• Repair and replacement costs: Compare potential repair costs with the warranty cost to see if the investment is worthwhile.
• Manufacturer reliability: Some brands have a strong reputation for reliability, which might reduce the likelihood of needing a warranty.
• Household usage: Heavily used appliances may benefit more from extended coverage.
• Financial flexibility: If an unexpected large repair bill would be a burden, an extended warranty might provide peace of mind.
• Coverage details: Always read the fine print. Check for exclusions, coverage limits and whether service fees or deductibles apply.

Pros and cons of appliance extended warranties

Appliance extended warranties offer a number of benefits — for instance, they can be more affordable than a bundled home warranty plan — but they don’t make sense for everyone.

Jones walked through the advantages and disadvantages of appliance extended warranties. “There are some advantages to appliance extended warranties, such as the longer protection you get beyond the manufacturer’s warranty, as well as the fact that the costs for any future repairs are typically locked in at today’s prices — rather than paying more in the future due to inflation,” he said.

“Keep in mind, however, the potential disadvantages as well. It is possible that the cost of the extended warranty may end up exceeding the potential repair costs. In particular, higher-end appliances that are built thoughtfully with durability in mind may not end up requiring expensive repairs, but an extended warranty on such a high-end appliance could be costly. When it does come time for a repair through an extended warranty, it’s also possible you may experience issues like slow response times or the use of lower-quality replacement parts, depending on the service provider you’ve chosen.”

One ConsumerAffairs reviewer from Oklahoma, Danielle, was impressed with the benefits of her extended warranty. “We were pleased to receive a next day appointment for our issue,” she said. “Our assigned technician, Ed, arrived and examined the problem, offering a full explanation of what went wrong, as well as the solution and how to possibly prevent it in the future. He was friendly and knowledgeable. Would highly recommend.”

» CALCULATE: Home warranty costs

Appliance extended warranty alternatives

If an appliance extended warranty isn’t the right fit for you, there are other ways to protect your appliances or prepare for future repair costs:

• Home warranty plans: These plans bundle appliance and home system coverage, which may be more cost-effective for homeowners with several aging systems and appliances.
• Manufacturer or retailer protection plans: Some retailers offer in-house protection plans that may differ slightly from extended warranties.
• Credit card protection: Certain credit cards offer purchase protection or extended warranty coverage on eligible items.
• Savings fund: Instead of paying for a warranty, consider setting aside money in a dedicated appliance repair fund.
• Homeowners insurance endorsements: While traditional homeowners insurance doesn’t cover appliance breakdowns, some policies may offer optional endorsements for appliance-related coverage.

Evaluating these alternatives can help you determine the best way to safeguard your home investment without overpaying for coverage you may not use.

Bottom line: Are appliance extended warranties worth it?

An appliance extended warranty can help pay for issues that unexpectedly arise with your major home appliances. Purchasing coverage may be a good choice if you have older appliances or if you know you won’t be able to handle the cost of any major repairs or replacement out of pocket.

Before purchasing an appliance extended warranty, check for an existing manufacturer's warranty and find out if you already have extended coverage through your credit card. Whether an appliance extended warranty is worth it depends entirely on you and your situation. Make sure you read over any agreement carefully before purchasing extended coverage.