Appliance Insurance - does this make sense?

londonman81

I am paying 9.48 per month for insurance on a washing machine and a fridge which I purchased in Jan last year (2014). The total purchase value of the two appliances was 487.98 pounds.

In one year I have spent 25% of the purchase value of the two appliances, just on insuring them.

I have worked out that after 4 years I will have spent the same amount on insurance as on the purchase value of appliances.

My thoughts:-


1. Is there a rule of thumb as to how long a washing machine (Bosch) and fridge (Beko) should last?

2. Is there an approx calculation of how much insurance should cost for items with a particular value?

3. Is the above insurance deal worth continuing with or should I cancel it?

Thanks!

keith1950

The main question is....would you have spare cash or credit to pay for a repair or replace them?

Personally I think they are a waste of money.

hcb42

I never take them. I figure as long as I can pay for repairs or buy a replacement then no point wasting money on insurance

I have had one fridge go on me in 28 years. Washing machines are a bit harder, have been unfortunate and had one or two go on me just out of guarantee, but if I had been insuring them for 28 years then I would be a lot worse off.

keith1950

As it stands you have so far paid 13 or 14 months at £9.48p when the appliances were under the manufacturers warranty anyway.

Most fridge/freezers I have have had lasted at least 10 years and most washing machines at least 5 years. ( although cosmetically they may have been passed their best).

Based on those figures.....2 washing machines and 1 fridge in 10 years.. Total cost around £800 you would have paid around £1200 on insurance.

This doesn't even take into account that Bosch products are covered by a 2 year warranty anyway!!

londonman81

keith1950 wrote: »

As it stands you have so far paid 13 or 14 months at £9.48p when the appliances were under the manufacturers warranty anyway.

Most fridge/freezers I have have had lasted at least 10 years and most washing machines at least 5 years. ( although cosmetically they may have been passed their best).

Based on those figures.....2 washing machines and 1 fridge in 10 years.. Total cost around £800 you would have paid around £1200 on insurance.

This doesn't even take into account that Bosch products are covered by a 2 year warranty anyway!!

One point is mention is that the insurance covers all costs including call out, labour and parts and also replacement if necessary.

I was told manufacturers warranty does not cover call out charges (£60-£100 is what I was told).

Insurance still not worth it?

londonman81

keith1950 wrote: »

The main question is....would you have spare cash or credit to pay for a repair or replace them?

Personally I think they are a waste of money.

If they break down next month, I do have the money to buy new ones, but it would cost me £487 to replace versus £128 using insurance.

Is it about having the cash, or is it about the actual cost?

hcb42

It's a gamble. If they break down in year 2, then you win, if they break down at the end of year 4 or 5 then you might break even. If they don't break down, then you lost £500 in four years.

Put £10 in a separate account every month...

sheramber

My Bosch washing machine lasted at least 10 years.

keith1950

londonman81......there are no call out charges on warranty repairs........unless it turns out the appliance is not actually faulty.

As I stated earlier I don't consider it worth taking out appliance insurance however, in your case, as you have already been paying it for 13/14 month the situation is different.

However, in the long term, if you continually pay for insurance you will inevitably be out of pocket......but you will have peace of mind.it to

repair

PeacefulWaters

I stick £50 a month in a savings account earmarked "white goods". In reality it's for dishwasher (5 years), washing machine (5 years), microwave, fridge/freezer (10 years), toaster, kettle and TV (5 years).

I try to keep the minimum balance above £500. If it drops below I accelerate the level of saving. As £50 is more than enough it never falls below £500 and I end up skimming the account for other things.

If something breaks out of warranty I can buy a new appliance or pay for a repair. I find a local tradesman on Rated People better value than calling out Hotpoint or the like.

Insurance for this sort of thing is overpriced. Self insuring may require a little discipline but is much more cost effective.