Posted in Hacks, on 01/08/2017
The Ultimate Guide: U.S. Warranties vs. Guarantees vs. Insurance
You’re already a smart shopper - understanding the basics of protecting your things with warranties, guarantees, and insurance will help you become a smart owner.
You’re already a smart shopper. Understanding the basics of protecting your things with warranties, guarantees, and insurance will help you become a smart owner.
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.
Depending on the types of protection you have, you’ll be covered in case of manufacturer defect, accidental damage, loss, and theft. Make sure to read on below for details and exceptions.
Warranties basically protect you if something is defective with your purchase; if it has a defect that causes it to stop working, whether from workmanship or materials, you’re entitled to have your item repaired or replaced. Warranties come in different shapes and sizes, and many shoppers review the warranty and what it covers as part of their purchase decision.
If no other guarantees are expressly offered, an implied warranty comes automatically with purchases in the U.S.
They guarantee that the product will be free of defects and function properly for a reasonable amount of time, usually under four years depending on your state. Implied warranties apply to secondhand purchases from retailers (such as a used furniture store), but not transferred in private secondhand purchases (buying a lamp off Craigslist).
Note: Implied warranties are automatic but can be trumped. When something is sold “as is” (or with similar language) the implied warranty is voided. If you have an express warranty with a time limit, that replaces whatever time limit that would have come with the implied warranty.
Express warranties guarantee that the product will work as advertised for a specific amount of time, and protect you in case a manufacturer defect crops up.
You can find your exact express warranty physically with your product (look for small warranty booklets in the packaging) or online at the manufacturer or retailer websites.
The most robust type of warranty, full warranties protect your full purchase for a specified amount of time. Unlike a limited warranty, they can be transferred from the original purchaser, so you’re covered even if you bought something second-hand. They provide services and shipping free of charge, and after attempting to repair a product a number of times, they will give you a choice of a full refund or replacement.
The most common type of warranty, limited warranties protects your purchase in - you guessed it! - limited ways for a specified amount of time. Limited warranties cannot be transferred from the original purchaser, can apply to specific parts of the product, and often requires you to pay for fees like shipping and service work. Be aware, you may need to jump through some hoops to take advantage of this warranty, such as registering or sending in your warranty card, or sending your item in for repair in the original packing it came in.
That “specified amount of time” mentioned in full and limited warranties? A lifetime warranty speaks to that specified amount of time. Read your fine print to find out whether “lifetime” means the length of time that a product is on the market or available from the manufacturer, or for a predetermined “lifetime” of the product.
Note: One of the many reasons why you should ALWAYS save your receipts is to prove purchase date when using a warranty.
Extended warranties, also known as service contracts, are available for purchase from manufacturers (such as AppleCare+), retailers (such as Best Buy) and third parties (such as SquareTrade). In order to use an extended warranty, you’ll usually pay a deductible, shipping fees, and sometimes service fees.
They extend the express warranty for a longer period of time, and many extended warranties cover accidental damage - such as dropping your phone and cracking your screen - in addition to manufacturer defects. They may even cover loss or theft depending on the warranty you choose.
Extended warranties come in all shapes and sizes so it really pays to think about problems you typically run into before choosing one.
For instance, with the Best Buy extended warranty, you can purchase add-ons for accidental damage, loss and theft coverage on top of manufacturer defects. Squaretrade’s extended smartphone warranty, on the other hand, covers manufacturer defects and accidental damage at lower rates - but does not cover loss or theft.
You know yourself best - are you a regular member of the cracked screen club, or do you tend to leave your phone in coffee shops? Do you tend to upgrade your appliances before your warranties are up? Your answers will help you choose what kind of extended warranty - if any - is best for you.
Note: regardless of the provider, you usually have a limited window (30 to 90 days) to buy your extended warranty, so hustle to do your research before you’ve aged out of your options.
Guarantees vary from place to place, but your retailer may offer a money-back guarantee if you are not satisfied with your purchase. If you are not satisfied with your purchase because of a manufacturer defect, and want to return it, you may be able to do so by using your guarantee.
Make sure to check the fine print; some guarantees expire after a certain period of time (90 days is a common cut-off point) and some may carry restrictions on your reason for returning the item, or the item’s condition upon return.
Credit Card Protection
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 an extra year of protection against manufacturer defects. Check out warranty extension benefits for major card companies (and make sure you’re checking the right type of card at each company): American Express, Discover, Visa and MasterCard all offer warranty extension.
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. American Express, Capital One, Citi, USAA, and Wells Fargo all offer this type of protection depending on your card.
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. 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
You can purchase insurance for your phone through AT&T, Verizon and Sprint 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.
There are mixed reviews on the quality of carrier insurance’s customer service and actual coverage. For instance, if your phone needs to be replaced you may have to accept a refurbished phone, and sometimes not even the same model of refurbished phone, instead of a brand new one.
Did you make it to the end? Good job! 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. Always, always save your receipt and save a copy of the warranty that comes 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. Know your protection options. We’ve got you covered here, and check out our chart for quick reference. And lastly, 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 firstname.lastname@example.org, and then access them whenever you want. Download Trōv for iOS and Trōv for Android.