Aditya Sharma, Head – Chief Distribution Officer - Retail Sales, Bajaj Allianz General Insurance

Imagine this: You're engrossed in the TV premiere of a Bollywood blockbuster, eagerly anticipating the climax, when suddenly, your screen turns black interrupting your experience. After hours of waiting, the technician arrives with bad news: a defective panel needs repair or replacement, and if it's not under warranty, you face a hefty bill. Unfortunately, you find out that the Original Manufacturer Warranty expired just last month.

Amidst frustration and disappointment, you realize the precarious situation you're in.

Without warranty coverage, you're at risk of facing significant repair bills. However, within the chaos, there's a beacon of hope: extended warranty insurance.

With extended warranty insurance, you can rest assured that unexpected repair expenses are covered, sparing you from financial strain and ensuring uninterrupted experiences.

Extended warranties are added protection that goes beyond the manufacturer’s guarantee. They are essentially insurance policies that lengthen the coverage of your appliance or gadget beyond the standard warranty period. When your product malfunctions due to a manufacturing defect or poor workmanship, extended warranties help cover the cost of repair or replacement.

Let’s delve deeper into understanding extended warranties.

What is Covered under an Extended Warranty?

Extended warranties typically cover repairs or replacements for mechanical or electrical failures of your essential household products like refrigerator, washing machine, Television etc. in case of any manufacturing defect or malfunctioning arising out of mechanical issues.

For example, let's say you purchase an extended warranty for a laptop & you have purchased a separate Extended Warranty Policy. If, after the manufacturer's warranty expires, the laptop's hard drive fails, the extended warranty would likely cover the cost of repairing or replacing the hard drive.

 The coverage may vary depending on the specific terms of the warranty, but generally, it includes components such as –

1. Parts: Replacement or repair of faulty
2. Labor: Costs associated with repairing or replacing the covered item
3. Mechanical breakdowns: Failures due to defects in materials or due to poor workmanship
4. Electrical failures: Malfunctions caused by electrical issues.
5. No excess or Depreciation: You have the option to choose between NIL excess and NIL Depreciation at a nominal price

It's essential to review the terms & conditions of the extended warranty policy to precisely understand what is covered.

Now that we've explored the coverage provided by an Extended Warranty policy, it's equally crucial to understand its limitations.

Top of Form

What are the general exclusions in an Extended Warranty policy

1. Normal Wear & Tear - Extended Warranty often does not cover damage resulting from regular use or wear & tear over time.
2. Pre-existing conditions - Any issues that existed before purchasing the extended warranty are typically excluded from coverage
3. Unauthorized Repairs - Repairs conducted by unauthorized service providers may void the extended warranty coverage
4. Routine Maintenance – Regular maintenance tasks such as cleaning or software updates
5. Loss or Theft: Extended warranties typically do not cover the loss or theft of the item
6. Accessories: Additional accessories or peripherals may not be covered unless specifically mentioned in the warranty

Who Can Buy Extended Warranty?

• Extended Warranty Insurance can be purchased by individuals or institutions who own a range of electronic and electrical appliances, kitchen equipment, furniture, fixtures, as well as portable devices such as cameras, laptops, and mobile phones.
• Additionally, manufacturers can purchase an Extended Warranty to offer coverage to their customers as an additional service or option at the time of purchase.

When Can You Buy an Extended Warranty?

You can buy an extended warranty policy either on the same date of purchase of the product or any time before or after the expiry date of the manufacturer’s warranty on the product. However, the coverage typically triggers after the expiry of the manufacturer's warranty. It is recommended to buy this product along with the purchase of new appliances as it comes at a nominal cost.

Now let’s explore the benefits of investing in an extended warranty policy.

 Extended coverage period: A primary benefit of an extended warranty is the extension of coverage beyond the manufacturer's warranty period. This ensures your product against unexpected breakdowns or malfunctions for the opted cover period.

2. Peace of mind: Extended warranties offer peace of mind, knowing that you will not have to bear the full cost of repairs or replacements if your asset fails after the manufacturer's warranty expires.
3. Savings from Unforeseen Expenses: While extended warranties come with an upfront cost, they can potentially help you save money in the long run. Repair or replacement costs for electronic devices, and appliances, can be significant, and an extended warranty can help offset these expenses, especially if multiple repairs are needed over the coverage period.
4. Protection from Inflationary Costs: Extended Warranty will cover your appliances in the range of 1 to 4 years right after the expiry of the manufacturer’s warranty, it will also save you from the rising cost of inflation during your cover period.

 Now, let's delve into the disparity between a Manufacturer's Warranty and an Extended Warranty.

 Manufacturer Warranty:

• Manufacturer warranties are typically included with the purchase of a new product
• They are provided by the manufacturer and cover defects in materials or workmanship for a specified period after the purchase date
• Manufacturer warranties vary in duration, with common periods ranging from 1 to 4 years
• Coverage under a manufacturer warranty usually includes repairs or replacements of defective parts at no additional cost to the consumer
• Manufacturer warranties often have specific terms and conditions, such as limitations on coverage and requirements for warranty service

 Extended Warranty:

• Extended warranties are optional protection plans that consumers can purchase separately from the manufacturer or an insurance company.
• They extend the coverage beyond the duration of the manufacturer warranty, providing additional protection for a longer period
• Extended warranties may cover repairs for defects or malfunctions that occur after the expiration of the manufacturer's warranty
• Coverage under an extended warranty can vary widely depending on the provider and plan selected
• Consumers typically pay an additional fee to purchase an extended warranty, and coverage may be available for a predetermined period, such as 1, 2, 3 or 4 years

 Conclusion

Throughout this article, we have uncovered the nuances, benefits, and considerations of extended warranties. Here is some final advice to consider: assess the risk, compare coverage options, consider the cost, and read the fine print.