The hidden truth about home appliance warranties

Whether buying a new home appliance or trying to avoid a hefty repair bill for an older one, you might be thinking about extended home appliance warranties. However, appliance warranty companies may be frustrating and time-consuming to deal with . Trust me, I know from personal experience. Let’s explore some hidden truths based on my recent experience with a Sears Home Appliance Warranty.

Are home appliance warranties a scam?

The short answer is that if you purchase the warranty from a major retailer, it will not be a scam. The good news is that the warranty may provide coverage for unexpected repairs or replacements and may save you money in the long run. Notice that I said ‘may’ in both of those cases. That’s because the broad-brush claims of “we’ll fix it or replace it” could be no more than marketing jargon to sell a pricey warranty that costs more than it’s worth. If you’re thinking about a warranty and don’t have one, check this link for reviews of the best home warranty companies.

What does an appliance warranty cover?

Most appliance warranties will cover repairs or replacements for mechanical and electrical failures due to wear and tear. This typically includes parts such as motors, heating elements, thermostats, and control panels. Some warranties may also include an annual appliance check-up.

What does replacement actually mean?

Let’s face it. For most of us, if you tell us you’re going to replace something, we expect that to mean a brand new version of what we’re replacing. But in the world of appliance warranties, ‘replacement’ can mean something entirely different. Some warranties may only cover a portion of the replacement due to depreciation. In other words, you could receive a couple hundred dollars no matter what you paid for your appliance originally.

Understanding the fine print in home appliance warranties

Unfortunately, this is one case where you must read the fine print. Many warranty companies include clauses and exclusions that may void your coverage if certain conditions are not met. For example, some warranties may require regular maintenance or servicing of your appliances. The company might also specify different terms based on when you purchased your appliance.

In our case, the warranty clearly stated that Sears would replace the appliance if it couldn’t be repaired. When our serviceman warned us that there was ‘no such thing’ as a true replacement, we got worried and read the entire contract. Our old contract had no depreciation clause. (Yippie!) Sears did eventually live up to the promise and give us enough credit at Sears.com to buy a new equivalent refrigerator. We eventually got the exact refrigerator we wanted, but it was a nightmare getting there.

The process can be maddening

Our case began over the 2024 Memorial Day weekend. Our freezer died. We called service, got an appointment for three days later, and scrambled to find a rental refrigerator. By the way, at almost $200 per month for a rental, be sure that your warranty covers a rental as well as food loss.

The service tech ordered the parts during his visit. Two weeks later, we learned the parts were no longer available. We were transferred to the ‘Research’ department, where they looked for parts outside the normal channels. That process was supposed to take about two weeks. Instead, it took nearly five.

When Research couldn’t find parts, we moved on to ‘Replacement’. That was supposed to take 3-5 business days. It took nearly two weeks. The Replacement Department was supposed to be setting the value for our fourteen-year-old fridge. I suspect we also made a trip to Legal, where they checked the fine print to look for an out.

The biggest problem was that we were never assigned someone to handle our case. We could only call the front-line customer service department, which sometimes had hour-long hold times and almost always gave us inconsistent answers. On three different occasions, I asked to be transferred to a supervisor. I received answers ranging from ‘There are no supervisors’ to ‘It will take two business days for them to get back to you.’ I never received a supervisor call. In fact, not once during our nearly two months of wading through the process did we ever receive a call.

Should you buy an appliance home warranty?

There is no clear answer to this question. While home appliance warranties can provide peace of mind and potentially save you money on repairs and replacements, it also comes with its own set of problems. When you buy an appliance from a major retailer, you’ll be asked to make an immediate decision about an extended warranty. The truth is, you may not need to make that decision immediately. Reach out to the retailer to find out exactly how long you have before you have to make a decision. And during that time:

• Thoroughly read the terms and conditions of the home appliance warranty.
• Pay attention to clauses or exclusions that may void coverage.
• Note any requirements for regular maintenance or servicing.
• Consider the reputation and reliability of the warranty provider.

Dealing with the devil

Hopefully, you’ll never wind up having to wade through a nightmarish process like we did. But if you do, here are a few tips.

• Read your contract again to see what you are entitled to.
• Keep detailed notes of each call (include the phone number and telephone tree prompts you used).
• Keep calling. No matter how long the wait time—hang in there.
• File a Better Business Bureau complaint if you don’t see results.

Knowing what I know now, would I buy another appliance warranty? Yes, and no. We’ll buy an extended warranty to cover our new refrigerator for years 2-5. After that, we’ll be putting the money we would have spent on the warranty into savings to cover the cost of repairs or replacement.

Did you miss last month’s scam tip? If you did, you can use this link to view Tips to avoid online shopping scams. If you want to check out all my posts and puzzles, click here.