Posted in Hacks, on 01/08/2017

The Ultimate Guide to Australian Guarantees, Warranties & Insurance

Trying to decide whether to get an extended warranty or add-on insurance? Here's a reference chart and breakdown of your protection under consumer guarantees, warranties, credit cards, and insurance.

You’re already a smart shopper. You can become a smart owner by understanding the basics of protecting your things with consumer guarantees, warranties, and insurance.

Let’s go over a run-down of different kinds of protection for your purchase. Here's a quick reference chart to check general coverage.

The Ultimate Australian Protection Guide: Guarantees, Warranties, Insurance

Depending on the types of protection you have, you’ll be covered in case of manufacturer defect, accidental damage, loss, and theft. Read on below for details.

Consumer Guarantee

Australian Consumer Guarantee

A consumer guarantee is an automatic promise that the things you buy will work as advertised.

Under Australian Consumer Law (ACL), a consumer guarantee promises that items meet a quality standard — that is, they function with no defects — and also meet any other promises made about performance. If your purchase doesn’t meet consumer guarantee standards, you can get a repair, replacement or refund from the retailer or manufacturer.

Consumer guarantees automatically apply to your purchases, regardless of other warranties offered with your purchase, and may last longer than other express warranties.

Warranties

Warranties include promises about the quality and performance of products, and remedies in case a product has defects or doesn’t live up to its quality promises. They come in different shapes and sizes:

Express Warranty

An express warranty is a promise about how an item will perform, and can specify anything from how it looks to what it’s capable of doing for a specific period of time. Express warranties are extra promises made on top of your automatic consumer guarantee, and they can be written or verbal. If a product doesn’t meet its express warranty, the warrantor must remedy the situation.

Warranty Against Defects

Australian Warranty Against Defects

A warranty against defects — also known as a manufacturer’s warranty or a voluntary warranty — is a written promise that an item will be free of defects for a certain period of time. A warranty against defects also outlines the specific ways that the warrantor will fix, replace or reimburse your purchase if it has a defect.

(Wait, What’s the Difference?)

Express warranties make promises about products and their performance. They say, “We promise that if you buy this television, it will look like this and work like this for two years.”

Unlike an express warranty, warranties against defect don’t make promises about what the product will be like. Instead, they promise that the item will not have defects and they outline how the warrantor will fix defects. They say, “We promise this television won’t break due to faulty parts or workmanship for two years. If it does, here’s how we’ll fix, replace, or reimburse your purchase.”

Warranties against defects can contain express warranties. For example, a warranty against defects may include this statement: “We promise that this television can get a signal even if you’re in the middle of nowhere.” This promise about product performance now must be honored and remedied in the same way as a defect would be treated.

Extended Warranty

Australian Extended Warranty

You can buy an extended warranty to lengthen your warranty against defect, or manufacturer’s warranty. Extended warranties are available for purchase from manufacturers (AppleCare), retailers (JB Hi-Fi), and third parties (Domestic & General). You usually have a limited window (30 to 90 days) to buy your extended warranty, and depending on the warranty, you’ll usually pay a deductible, shipping fees, and sometimes service fees. Some extended warranties cover accidental damage — such as dropping your phone and cracking your screen — or loss and theft in addition to manufacturer defects.

Pro tip: Before buying an extended warranty, double check consumer guarantees to make sure you’re not buying double coverage. For example, even if your one-year Apple warranty is up, you may still be entitled to repairs deemed reasonable by the ACCC, especially if you’re under a two year contract. Check out Choice’s 2015 shadow shopping for a recap of your consumer guarantees and a breakdown of the extended warranties available at Harvey Norman, JB Hi-Fi, and The Good Guys.

Credit Card Protection

Australian Credit Card Warranty Extension & Purchase Protection

If you buy something with your card, check with your credit card company to see what protection is automatically applied to your new purchase.

In many cases, credit cards will extend a warranty for up to an extra year of protection against manufacturer defects. Typically, credit card warranty extensions will double the length of your original manufacturer’s warranty, provided it is below five years, up to a cap of a one year extension. Check out warranty extension benefits for major card companies (and make sure you’re checking the right type of card at each company): HSBC, Westpac, ANZ, Bankwest, Citi, NAB, and American Express all offer warranty extension with certain cards.

Some credit card companies also offer purchase protection which covers you for damage, loss or theft that falls outside the normal purview of a warranty, provided you’ve exhausted any other primary insurance coverage — such as homeowners insurance — you may have for the item. Purchase protection usually lasts 90 days from the date of purchase. American Express, ANZ, HSBC, NAB, and Citi all offer this type of protection depending on your card.

Homeowners and Renters Insurance

Australian Homeowners and Renters Insurance

If you have homeowners or renters insurance, add your new purchase to your inventory (take photos and save your receipt) to be covered in the case of loss, theft or damage — while inside your home. If you want to add coverage for your things when you’re outside the house, look into adding portable contents coverage to your policy. As always, read your policy or call your agent to ensure you understand the terms and amount of coverage you receive if you make a claim. Because of policy deductibles, some people choose not to make claims on items that are relatively low-cost.

Phones Bonus: Carrier Insurance

Australian Phone Carrier Insurance

You can purchase insurance for your phone through Vodafone, Telstra, Optus and Virgin to cover accidental damage, loss and theft. Like all insurance, you’ll pay a monthly premium and are subject to deductibles if you make a claim.

Worth it? Depends on your habits. At the end of the day, if you are prone to dropping or losing your phone then the cost may be worth it, but as with all protection add-ons, consider your options before taking out your wallet!

3 Things Smart Consumer All Have In Common

Did you make it to the end? Nice! There’s a lot of reading involved in understanding what types of protection you can use if anything goes wrong with a big purchase.

At the end of the day, smart consumers all have a few things in common. First, always save your receipt and save copies of any warranties that come with your purchase. Even once your warranty has expired, you’ll want to keep it in case you want to use something like credit card warranty extension. Second, know your protection options. We’ve got you covered here, and check out our chart for quick reference. Third, document any incidents in case you need proof for using protection like insurance.

If you're looking for an easy way to get organized and stay on top of your receipts and warranties, Trōv's free app is a great start. You can add things to your personal inventory by snapping a photo of something or forwarding a receipt to receipts@trov.com, and then access them whenever you want. Download Trōv for iOS and Trōv for Android.

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