Advice on Appliance Insurance

GetEVN

Hello all, I am currently looking at cutting overlapping costs, I own my home + mortgage, and have buildings + contents insurance, but I also pay £3.49 + £5.99 per month for Cooker and Dish Washer insurance to AO (where I bought my appliances). The cooker is 5 years old and the dish washer is 2.5 years old, Cooker was around £330 new and dishwasher was slimline type £255. 

Do you think it's worth still paying the insurance cost, I could buy both these new now if they ever broke. 

sammyjammy

IMO self insurance is the way to go, i.e. saving that money you are spending on appliance insurance, I do the same but with Pet insurance.  Did they ever break?

DullGreyGuy

Ultimately it's your choice... you're paying almost £115 per year to cover the risk of £585 of loss which is a loss you can afford to make. 

Personally, the cost to loss ratio is too high for me and with your 5 years of ownership you could have almost bought a new pair already had you not had the warranty. By contrast home insurance is often around £200 a year covering £300,000 of potential losses which most of us couldn't afford to pay out our own pocket. 

PS. these are not overlapping costs... your warranty almost certainly focuses on mechanical breakdown, though some have accidental damage cover. Your home insurance will explicitly exclude mechanical breakdown or wear & tear

Bigphil1474

What is the cooker insurance for and what does it cover? I have a cooker policy with Domestic & General which we took out as the cooker cost a lot (to us), and we don't have anyone local we know who could repair it. We've probably broke even after about 8 years as we had a couple of repairs each of the last 4 years.  It covers all breakdowns and provides a new cooker should it be unrepairable. If the cooker is easily replaceable, I wouldn't bother, but ours is a duel fuel range cooker that took 4 people to get in, and the OH loves it, so it was easier for me to get the cover.

Cherryfudge

Personally, I'd put the cost of replacement into your emergency fund - because white goods do break and will need to be replaced, but at present you're paying nearly a tenner a month, £113.76 a year which is around a fifth of the replacement cost of both appliances together (not allowing for inflation there).

If the replacement cost were sitting in your EF at a decent rate of interest, you could be earning about £35 a year on it instead of paying out the £113 in insurance.

A different context would be to look at whether it's worth losing any no claims bonus on your house/contents insurance. Again, I think there's a balance here. If you're good with your hands or willing to spend the time on Youtube learning, lots of breakages can be fixed, but we all have our limits on what we can tackle, so supposing the breakdown is something you can't fix yourself and you need to get a new appliance: if you claim on insurance your premium will increase. If you have the money tucked away, you just get a new one.

That said, we've claimed on our insurance a few times over about 30 years in this house. A slipped spanner led to replacing the bathroom suit, a storm lead to a power outage and the freezer never worked again, and an over loaded wall cupboard collapsed, smashing the cooker underneath and everything in its path as well as leading to food wastage because of fresh food that couldn't be cooked before the new cooker arrived and which wouldn't fit in the freezer. So insurance is worth having but as you suggest, it's about whether it's worth double covering it for items that are presumably out of guarantee.

Maths isn't my strongest point so all the numbers come with a caveat.  

DullGreyGuy

Cherryfudge said:

A different context would be to look at whether it's worth losing any no claims bonus on your house/contents insurance. 

You cannot claim on your home insurance for breakdown of appliances

You could claim for accidental damage but given the average Home excess is now circa £250 you don't need to be good at maths to workout if it's worth claiming for a £255 dishwasher. 

FreeBear

DullGreyGuy said: ... your warranty almost certainly focuses on mechanical breakdown, though some have accidental damage cover. Your home insurance will explicitly exclude mechanical breakdown or wear & tear

Most white goods come with extended warranties now. 2, 3, or even 5 years on some products. So not really much point in taking out insurance when the manufacturer would fix a breakdown. On top of that, the vast majority of appliances are pretty reliable - The last time I had to repair a cooker was when a ring broke on a 25+ year old thing.

GetEVN

sammyjammy said:

IMO self insurance is the way to go, i.e. saving that money you are spending on appliance insurance, I do the same but with Pet insurance.  Did they ever break?

Pet insurance is the next on my list, I am going to be looking a paying into our vets "plan account". 

DullGreyGuy

FreeBear said:

DullGreyGuy said: ... your warranty almost certainly focuses on mechanical breakdown, though some have accidental damage cover. Your home insurance will explicitly exclude mechanical breakdown or wear & tear

Most white goods come with extended warranties now. 2, 3, or even 5 years on some products. So not really much point in taking out insurance when the manufacturer would fix a breakdown. On top of that, the vast majority of appliances are pretty reliable - The last time I had to repair a cooker was when a ring broke on a 25+ year old thing.

What the OP is talking about is rarely insurance, from a legal perspective, but are extended warranties or service plans. Many of the extended warranties you are talking about are from the likes of D&G and once those run out they then market an extension that you start paying for to you. 

As posted twice in the last week, the extended warranty is often promotional in nature and only apply to certain retailers, they also require explicit action to claim them. The first poster bought from a retailer not in the scheme and the second didnt realise you had 90 days to register for it. 

As to reliability? Its swings and roundabouts. Our 2 year old freezer broke down 3 times but its twin fridge hasn't once in 5 years. Our 5 year old washer drier broke twice this year. Have other items 10 years old with no issues.

Personally don't buy extended warranties/"insurance" but it has value to some.

GetEVN

Bigphil1474 said:

What is the cooker insurance for and what does it cover? I have a cooker policy with Domestic & General which we took out as the cooker cost a lot (to us), and we don't have anyone local we know who could repair it. We've probably broke even after about 8 years as we had a couple of repairs each of the last 4 years.  It covers all breakdowns and provides a new cooker should it be unrepairable. If the cooker is easily replaceable, I wouldn't bother, but ours is a duel fuel range cooker that took 4 people to get in, and the OH loves it, so it was easier for me to get the cover.

It's pretty much the same I think its even D&G that do it, ours is just a plain electric cooker, I bought everything super on the cheap when I renovated my house as It got convereted from a business premises. (I didnt have a kitchen at all to start with). Mine only took two very kind brothers to lift in and one very long suffering electrician to install. 

I just had a look and the "modern equiv" is £380 ish now, I definetly agree it makes sense if we ever get anything fancier *Dreaming in Agas* 

Albermarle

That said, we've claimed on our insurance a few times over about 30 years in this house. A slipped spanner led to replacing the bathroom suit, a storm lead to a power outage and the freezer never worked again, and an over loaded wall cupboard collapsed, smashing the cooker underneath and everything in its path as well as leading to food wastage because of fresh food that couldn't be cooked before the new cooker arrived and which wouldn't fit in the freezer

As to reliability? Its swings and roundabouts. Our 2 year old freezer broke down 3 times but its twin fridge hasn't once in 5 years. Our 5 year old washer drier broke twice this year. Have other items 10 years old with no issues.

We must be lucky, as in 35 years have never claimed on insurance for the house, in fact stopped paying for the accidental cover some time ago.

Have never ever taken out a warranty when buying a new appliance. Apart from dishwashers and washing machines needing replacing every 8 years or so, have only had one issue with a fan oven, which was fixed under warranty.

When we had a dog we did claim on pet insurance and probably roughly broke even.