Extended warranties
What should you do if you have a problem with an extended warranty? Find out more about cancelling your agreement, getting your premium back, and exclusion clauses which may mean you're not covered for what you thought.
- If you want to cancel
- Cashbacks
- Tips
- Exclusion clauses
- Extended warranties on domestic electrical goods
You may have rights to cancel your extended warranty if you choose to do so. Contact Consumer Direct for advice.
A number of extended warranties are now sold on a 'cashback' basis. With these, your premium is returned in full if you have not made a claim for a fixed period - usually five years. If you have bought this type of warranty and do not make a claim, it is your responsibility to take steps to recover the premium when the time is up. Make sure you read the terms very carefully. You may only be given a short time in which to register your cashback status after signing the warranty, and you are only allowed a few weeks in which to ask for return of the premium after the five years have passed. Of course you have to remember to do this, and keep the documents safe in the meantime.
- Remember - cashback schemes are only as good as the company providing them. If the company goes out of business, you may not receive any cashback.
- Check the wording carefully to see what the warranty does and does not cover.
- Check the procedures for making a claim. Will the warranty pay for repairs up front or will you have to pay first and then claim the money back afterwards?
- Always keep details of any guarantee or warranty with your original receipt and any service or repair documents. Make a note of serial numbers for future reference.
Some traders might try to escape their responsibilities under contracts by using exclusion clauses, for instance by saying that they accept no liability for loss or damage. If an exclusion clause is unfair it is legally void and cannot be used against you.
Generally, only a court can decide if a contract term is unfair. But any exclusion of liability, whether in a contract term or on a notice, is always void if it is used for the purpose of evading liability for death or personal injury caused by negligence. Also, a trader selling goods cannot exclude liability for a breach of your statutory rights - for instance by displaying a sign saying: 'no refunds given.' An attempt to do this is an offence.
Similar statements about services - for example: 'no responsibility for loss or damage to garments, however caused' on the back of a dry cleaning ticket - are not illegal. But such terms are not enforceable if a court finds them unfair. We have more information about Unfair terms in contracts.
Extended warranties on domestic electrical goods
On line, store and catalogue suppliers of domestic electrical goods which also sell extended warranties must do the following show the price and duration of at least one applicable EW clearly and legibly next to the price of the goods and make clear that the purchase of an extended warranty is optional.
On a website, in directories, catalogues and in stores they must bring to your attention:
- your statutory rights relating to the purchase of domestic electrical goods and where you can get information on this
- that extended warranties can be obtained elsewhere
- that household insurance may be relevant to the purchase
- any cancellation and termination rights
- the financial protection you have if the provider of the extended warranty goes out of business
- information on financial protection of the extended warranty
- whether or not the extended warranty will be ended if a claim is made
If the warranty costs over £20 (including VAT), in store you can get a written price quote and you have at least 30 days to decide whether to accept. The quote must prominently state:
- that extended warranties may be available elsewhere
- that the extended warranty does not have to be bought at the same time as the goods
- your cancellation and termination rights (see below)
- whether or not the extended warranty will come to an end if a claim is made.
As a general rule, in newspaper and magazine advertisements, suppliers’ advertisements must show prices for at least one applicable extended warranty clearly and legibly next to displayed prices of domestic electric goods.
If the extended warranty lasts over one year, you can:
- cancel it within 45 days of buying it and get a full refund where no claims have been made; or
- get a pro rata refund if you want to cancel the extended warranty after 45 days, even if a claim has been made
- and, if the extended warranty cost over £20 (including VAT), the supplier must notify these rights in writing to you no more than 24 days after you bought the domestic electrical goods.
