Appliance Protection Plans - Are they worth it? (2024)

I just received a letter/solicitation from my local energy provider, DTE Energy. They offer a service called HPP Ultimate Protection Repair Plan, where the costs of repair/replacement of major household appliances is covered. According to the letter, covered appliances include Furnace/Central Air/Water Heater/Refrigerator/Range/Oven/Cooktop/Washing Machine/Dryer. Cost of the plan is $27/month ($325/year).

I live in an older home, and many of the appliances are older. They are all in ok working condition right now, but really could go at any time.

Are plans like this worth the cost, even short-term? Couldn't I conceivably sign up for the plan for a year, get all of my repairs done, and then cancel?

Or am I better off simply paying for the repairs with my saved emergency fund as I have always done?

Here's some thoughts from a discussion a couple weeks ago.

I've always used the 'don't insure for the small stuff' line of reasoning and skipped these plans. But when our washer died a couple of years ago I had second thoughts. This was our 3rd washer in 10 years (all front loaders). It seems like these front loaders just aren't engineered very well. Unfortunately, my wife loves them and doesn't want to go back to the old reliable top loader.

So we paid an extra $100 for a 5 year service plan on top of $720 for the washer. This time, I got the most stripped down version of Whirlpool's middle of the line washer. This compares to the $900-1100 price we were paying for the more fancy version of this same washer. I figured a worst case of $160 a year was an ok capital expenditure for a washing machine.

Sure enough, last month, the 2+ year old thing sprang a leak. I called the warranty company, they sent a tech, and within a week we had a new bellows and were good to go. The tech said it would have been about a $300 repair.

My revised opinion is that these warranties can be a decent value on appliances that are known to be problematic. I checked and the warranty cost isn't dependent on the type of washer, yet according to everything I've read, the repair frequency on front loaders is several times that of top loaders.

Another factor that slightly adds to the value of the warranty is the convenience factor. I didn't need to search out a repair company that wouldn't take me to the cleaners. I just called the number on my washer receipt and they handled it from there. Sure, it's just a minor convenience, but it did make the whole thing much less of a hassle.

Jim

When we replaced all of our appliances (kitchen and laundry room) during a remodel seven years ago, we bought a warranty that I have not seem offered since. It covered any three of the appliances and we could choose which three at a later time. So when the first problem occurred, we selected that item and so forth. On the third problem, we had to decide whether to cover that item or "save the benefit" just in case.

That warranty got used on the dryer, the oven and the built in microwave as I recall. The built in microwave was built into a wall, not the hang above the range type so it was quite expensive to repair or replace.

We got our money's worth, but I think it was due to the unique structure of that warranty.

magellan wrote:I've always used the 'don't insure for the small stuff' line of reasoning and skipped these plans. But when our washer died a couple of years ago I had second thoughts. This was our 3rd washer in 10 years (all front loaders). It seems like these front loaders just aren't engineered very well. Unfortunately, my wife loves them and doesn't want to go back to the old reliable top loader.

...

My revised opinion is that these warranties can be a decent value on appliances that are known to be problematic. I checked and the warranty cost isn't dependent on the type of washer, yet according to everything I've read, the repair frequency on front loaders is several times that of top loaders.

...

Jim

That is some pretty bad luck to have 3 total failures in 10 years. Front loaders are very popular in Europe (not so much in the US), are commonly found in laundromats, and have been made for a long time. I've had my LG for 4 years now trouble free and expect that to continue for another 10 years easily. They are a tiny bit more maintenance than a top loader though, as you have to wipe them down and clean the filter and maybe leave the door open. Most people don't do this basic maintenance and then complain about problems. My front loader will leak if I fail to clean it properly, but a quick cleaning and everything is back to normal. You'd be surprised at how little dirt on the outside of the bellow or the door can cause it to start leaking.

Anyways, I think self insuring with a little bit of elbow grease is the way to go. Those bellows cost ~$50-75 and take a few minutes to install yourself (we'll say 30 minutes). So, until you get a second repair out of the warranty, it hasn't saved you much as you think as you either spend 30 minutes repairing it yourself, or 2 hours waiting around for the repairman. Youtube has you covered if you don't want to wing it when repairing something. I recently had my HVAC Blower motor fail, there was a video on youtube. The part was $150 from the supply shop, and about 1hr of my time (in actual work, the rest of the time was trying to find a supplier of the part). When my dishwasher failed, I went to Sears Outlet got one for 40% off, it looks like new and installed it myself. There are videos on youtube for that too. None of this stuff is particularly hard, but if you aren't willing to pick up the tool and try yourself it can easily cost you upwards of $60/hr for labor. I typically watch a quick video (if I'm not familiar with it) and then get my 4 year old son to help, which turns into a teaching opportunity. Soon I won't even have to do the work myself

Also, if you think an item is a high failure item, then why buy it? It makes no sense to buy something that is going to frustrate you and cost you more.

Maybe I am wrong, but I tend to assume the companies offering these polcieis have more information than I do as to the average cost of ownership of whatever appliance they are insuring and then offer their plans at a cost comfortably above this. It is a game of averages tilted in their favor. So I tend to avoid them in most cases.

That said, I also think there are instances where you might find yourself with a unique set of circ*mstances that seem to make things tilt more in your favor. Just do your homework and make sure you aren't going into the plan with false assumptions about what it covers. It really comes down not only the cost but the value of the piece of mind you get knowing that when something fails (not if) you can call a number and theoritically it should be fixed pretty quickly without much effort on your end. I, like a previous poster, reside in the camp of DIYers that with the help of youtube will give any repair a few hours of my time before enlisting the help of a professional. In all honesty, this is probably not the best approach as my time is more valuable than the cost of a repairman, but I get satisfaction from learning new things and feeling like I beat the system.

Here is one situation where I am using a protection plan.

Our local Sears was going out of business and I purchase a wall oven that was 75% off for a house that will not be complete until early next year. The protection plan is refundable until 1 year after purchase. Although the manufacturer warranty is in place, this should be "turn-key" should I find something wrong. I was told that I can even have a free service check prior to the one year and then cancel. It is my intention to cancel the plan next summer. Typically, I would let my credit card extended warranty cover me, but they do not cover "built-in" items.

My Samsung washer that I got in 2012 is under H H Gregg extended warranty. It has one of those drums with no agitator. The little plastic cap that covers the bolt in the bottom of the tub keeps coming off. Looks like one of the clips broke off. It exposes the hold down nut which may tear fabrics.

I called H H Gregg's warranty company and they said it may not be covered because it was not a covered item. They cover mechanical and electrical and said this was neither. If the tech comes out and decides it is not covered, I have to pay.

So I called Samsung and explained the situation. The service person was amazed at the Gregg response. Bottom line Samsung will send a tech out free of charge because the drum and parts has a 3 year warranty- news to me.

Bottom line, I went against all my prior years of refusing to buy extended warranties, and now regret it.

Boo H H Gregg extended warranties. Never again.

Yeah, Samsung customer service.

Edit: Samsung service called and said yes the part is covered, but the labor is not, so it would be $60 to come out plus whatever time it took to fix it. Bottom line (i hope), I ordered the part from Samsung for $8.95 + shipping and will put it on myself. I just snaps on.
So to reconfirm, I will never but extended warranties again.

Dan

You're not going to get the most unbiased answers on subjects like this...

People who bought them and needed them will absolutely say they are worth it.

People who bought them and did not need them will absolutely say they are not worth it.

I bought my Admiral brand washer and dryer from Home Depot in 2010 for just under $800. They offered a four year full warranty for $129 - I bought it. I generally do not purchase extended warranties but this was a very good price and they offered a lot of "coverage" with it. I have not needed the extended warranty at this point, and these cheap appliances have been rock solid.

The most important part is just understanding what the warranty will cover - parts, labor, heating element, etc. Some are pretty tricky with their wording.