Appliance Warranty Insurance

Insurance Backing for a Manufacturer's Limited Warranty for Appliances

Expanded Limited Warranty with Balance Sheet Relief and Risk Transfer

Most appliance manufacturers offer a one-year limited warranty on their products.  The manufacturer backs this one-year limited warranty and maintains appropriate balance sheet reserves.   In addition, the manufacturer manages the customer experience if the consumer has a claim.

If a manufacturer wants to offer a longer limited warranty but does not wish to manage the accounting and reserves for the longer term, they can use Appliance Warranty Insurance.   Appliance Warranty Insurance generally utilizes a contractual liability insurance policy from insurance carriers to take over a portion of the risk from the manufacturer.   Often, the manufacturer retains the original one (1) year warranty and transfers an additional one (1) to (4) four years to offer their customer a two (2) year to five (5) year limited warranty.

The entire experience is transparent to the end customer if the manufacturer continues to manage the customer claim experience.   A manufacturer does not need a third-party administrator (TPA) for claims administration unless they want to outsource admin during the extended term and pay for it.   A manufacturer doesn't need to go through a TPA to obtain this coverage.

The manufacturer sends a new sales file to the carrier and a claims file (if the manufacturer retains the claims administration) every month.   The manufacturer can often offset new sales with existing claims to allow for net premium remittance.   When the program ends, the manufacturer submits valid claims to the carrier each month.

The process is straightforward, and coverage is available on a one-time cost-per-unit basis.   For the one-time cost, the manufacturer can offer a differentiated limited warranty and not have to deal with reserves or balance sheet issues.   The manufacturer has no contingent liability from the extended period of the limited warranty.

  • This program helps create confidence in Appliances from a Manufacturer
  • Helps to differentiate you from your competitors
  • Can be used on a product-by-product basis
  • The Manufacturer may continue to perform the claims administration or outsource it for a cost

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Contact Meramec Secure. Inc. for more information.