Should You Insure Your Appliances? What About Extended Warranties?

I am an appliance salesperson's worst nightmare. I will relentlessly haggle the price on a refrigerator, washer, dryer, or other appliance until I get the price I want.

This is not very hard to do. Salespeople at appliance stores tend to give in on the price of appliances because they expect to make money on the additional service warranty. If you want to see a really upset salesperson, refuse the warranty after getting an excellent price on the appliance!

So, why don't I purchase service warranties?...

First of all, products are automatically covered for the first year by the manufacturer. Therefore, if I felt I needed a warranty, I would wait until that year was almost over, and then accept the mailed offer of an extended warranty.

Secondly, an appliance warranty is not necessary if you have a Home Warranty and Service Plan.

According to BobVila.com:

With home service plans you can insure your appliances for repair or replacement even when they're past their prime."

A home service plan will protect you if your hot water heater suddenly gives out, or your dryer stops drying.

The cost of such a plan is about $400 a year at most, and carries small deductibles ranging between $35 to $100. If you carried a warranty on each of your home appliances, you might find that a home service plan warranty would be cheaper.

Regardless of whether you choose individual warranties, or one service plan warranty for your home, be sure to read the fine print before you sign any policy.