If you’re concerned about an expensive item in your home breaking, like a cooker, washing machine or TV, then you may be considering getting an insurance policy to cover the item.
Many of these goods already come with guarantees, but these don’t often cover everything that could go wrong with the item. However, some of these agreements are not warranties at all – and that matters if you are unhappy with a claim and want to go to the Financial Ombudsman.
Alternatively, you may find that you are covered for many items under your home insurance. This is something to factor in when choosing a new insurer. Why not see the deals available through Resolver’s comparison service?
There are three main kinds of agreement you can get when you buy goods, to give you a bit of reassurance if they break or get damaged.
A warranty is a regulated insurance contract you take out so an item you buy – anything from a sofa to car – is insured and gets repaired or replaced if it breaks or is damaged. They’re often called ‘extended warranties’ too. The insurance underwriter, not the trader or manufacturer, decides what to do with your claim.
A guarantee is usually included for free when you buy something and is a promise from the trader or manufacturer that they will repair or replace the item or give you a refund if it becomes faulty within a set period of time. Often called ‘manufacturer’s guarantees.
A service contract is an agreement between you and the trader or manufacturer that looks like an insurance contract but isn’t. They usually work in the same way though, but your rights are different if there’s a dispute.
It’s not always easy to tell what agreement you have without looking at the small print on the bottom of the agreement but make sure you ask when you make the purchase. Here’s why it matters.
You have lots of statutory rights when things go wrong with goods or services you purchase. We cover these in detail on our website. Here’s how it works.
14 days: if you bought goods or services online then you can return the item within 14 days even if there’s nothing wrong with it.
30 days: The Consumer Rights Act says that you are entitled to a full refund if the goods or services don’t work, aren’t as advertised (misrepresented) or aren’t provided.
Six months: if the goods are faulty within a six-month period you can still return them, but it’s up to the seller (not the manufacturer) to prove that they weren’t faulty when you bought them. You have to give them one chance at repair/replacing the goods before a refund applies though.
Of course, this being the law, there are some exceptions (the rules for digital content and made to order or perishable goods are a little different for example).
Up to three years. Most guarantees will cover you for a period of around 1-3 years. These guarantees relate almost exclusively to faults or damage though and won’t cover you for theft, accidental damage, pets that like to destroy sofas or other things.
So a guarantee is a useful thing to have, if you accept that it’s not going to cover everything. If the goods come with a guarantee, you might want to add them to your home insurance for additional cover or wait till the guarantee is due to run out and add them later to save a bit of cash.
If you make a claim on a warranty, the underwriter of the insurance policy will assess what’s happened and if it’s covered, they’ll pay out to repair or replace the item. Bear in mind that you’ll only get what you paid for, so if your warranty covers your iPhone 8 (other brand phones are available) then you won’t get a lovely new iPhone 10 – you only get the cash to replace what is damaged or lost.
Resolver can help you make your complaint to the shop, manufacturer and insurance company so use our simple complaint tool to get started. But what if you’re not happy with the business’ response?
If you’re unhappy with an insurer, the Financial Ombudsman can look at your complaint. It’s a free service – and its decision is binding on the insurer (but not you).
If you’re making a significant purchase, it really does make sense to think about getting a guarantee or insurance if you can’t afford to lose or replace it. But don’t feel pressured in to taking out a contract at the till or on a whim. Take some time to think about it and look at all the options. And if something goes wrong, we’re here to help.