What is complimentary extended warranty insurance?
Many Australian credit cards, especially the more premium cards with high annual fees, offer complimentary insurance cover. Sometimes this includes extended warranty cover.
This complimentary credit card insurance cover gives you an extra period of protection after the manufacturer's warranty on an item expires.
You need to purchase the item with the credit card to be eligible.
Many Australian credit cards offer extended warranties
There are over 200 credit cards in Finder's database of Australian credit cards. And 80 of them offer some form of complimentary extended warranty cover. That's 40% of the market. The majority offer up to 12 months of extra warranty, but some go as high as 24 months.
Source:Finder's credit card database
How does credit card extended warranty work?
The extended warranty cover started from when the original warranty ends.
You are only covered if the product you've purchased has a manufacturer's warranty.
The extended warranty period will match the period of the manufacturer's warranty, so if there's a 12-month warranty you get an additional 12 months.
There is often a maximum of 12 months' additional warranty, but some providers may offer up to 24 months.
Extended warranty does not apply if the item already has a warranty of 5 or more years. This is also dependent on the provider; for example, Westpac does not offer buyer's advantage cover for existing warranties of more than 5 years.
Extended warranty periods
If the manufacturer warranty period is:
You'll be covered for an additional:
30 days
30 days
90 days
90 days
6 months
6 months
1 to 5 years
1 year
Over 5 years
No cover
Example: purchasing a television with extended warranty cover
You purchase a brand new TV from an Australian store using your credit card. The manufacturer (the company that makes the TV) has a 12 month manufacturer's warranty.
Your credit card's extended warranty cover gives you an extra 12 months of cover. This starts as soon as the original warranty finishes.
After owning the TV for 15 months it stops working completely. You're outside the manufacturer's warranty but you're covered by your credit card's extended warranty policy.
You pay for the repair costs and then make a claim via the insurer (not your bank or card company).
Reading the fine print
If you are eligible, the extended warranty from your credit card will begin after the manufacturer's warranty ends. This may take place automatically, but you may also need to register your purchase with the card provider.
There are other factors to consider:
There is often an excess for each claim you make under the extended warranty.
The item must have been purchased with your credit card.
You will need to show proof of purchase and your credit card receipt proving you used your card to pay for the item.
If you purchased additional coverage, you need to show proof of that as well as the manufacturer's warranty.
If you cancel the credit card you used to make the purchase, you'll lose the extended warranty.
How to compare extended warranties
Excess. You will need to pay a certain amount for each extended warranty insurance claim. This is called excess. It's around $100 to $300 depending on the policy.
Claim process. Insurers have similar processes for claiming extended warranty insurance, but some may be more complicated than others. When you apply for your credit card you can enquire with the provider about the steps involved with its extended warranty insurer.
Limits. The liabilities for claims usually have a limit on the amount you claim within a year, or it has to match the purchase price of the personal goods that were purchased with your credit card.
Pros and cons of extended warranty
Pros
Peace of mind. You don't have to worry about buying a separate extended warranty on big items.
Easy to access. Many rewards credit cards and store cards now come with complimentary extended warranty on eligible purchases.
Cons
Only applies to Australian purchases. In most cases, the warranty will only apply when you buy an Australian-manufactured product. This means that if you try to shop overseas or online the warranty won't apply.
Excess. Typically, you will need to pay an excess for each claim. This can be from a low of $100 up to $300.
Depreciation. Insurers may factor in item depreciation (loss of value over time) when calculating the amount you're owed.
Frequently asked questions
Credit card providers will typically have a maximum amount they will pay back in a 12-month period as part of their extended warranty. You will need to check the terms and conditions for not only your credit card company but also the exact credit card you have. For example, NAB's original warranty is up to 12 months.
While extended warranty itself might not cost you anything, there can be an excess fee if you make a claim. This varies depending on the bank, but is usually between $100 and $300 per person per claim. It will be taken out of the cost given back to you. Depending on the original cost of the item you are claiming against, you will need to consider if the claim is worth lodging.
While extended warranty protection is offered through your bank or credit card company, the insurance is provided by a separate insurer like Allianz or Zurich.
This depends on the terms and conditions of your extended warranty insurance. Some providers, like Westpac and its subsidiaries, do offer 24 months' extended warranty, as long as your existing warranty is for less than 5 years.
It is common for high annual fee and reward credit cards to have both travel insurance and extended warranty insurance. To check, please read our review on the particular credit card you're interested in.
You can contact the American Express concierge, or Chubb Insurance to request this.
You can contact the insurer of your credit card provider to request this.
Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines.
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