When a customer buys an AC, refrigerator, washing machine, or laptop, the standard manufacturer warranty lasts just 1 year. Extended Warranty Insurance is the insurance-backed product that lets you offer your customers 1, 2, 3, or more additional years of warranty protection — covering repair or replacement costs arising from manufacturing defects after the original warranty expires. A powerful product differentiation tool for manufacturers, distributors, and retailers.
Property Insurance · Extended Warranty · Manufacturers · Distributors · Retailers
Extended Warranty Insurance is an insurance-backed product warranty that extends the protection offered by the Original Manufacturer’s Warranty (OMW) for an additional period — typically 1 to 5 years — beyond the standard warranty expiry. It covers the cost of repair or replacement of insured products that fail due to manufacturing defects during the extended warranty period, providing the customer with the same warranty experience they enjoyed during the original manufacturer’s warranty.
Covers repair or replacement of the insured product when failure is caused by a manufacturing defect — the same cause covered by the original warranty, extended for additional years.
CORE COVERFlexible extension periods of 1, 2, 3, 4, or 5 years beyond the OMW expiry date. The extension period begins exactly where the original manufacturer's warranty ends.
FLEXIBLE TERMACs, refrigerators, washing machines, microwave ovens, water purifiers, and all major home appliances — any new consumer durable purchased from an authorised dealer.
APPLIANCESLaptops, tablets, televisions, smartphones, home theatre systems, cameras, and all new consumer electronic products with an Original Manufacturer's Warranty.
ELECTRONICSIssued to the manufacturer, distributor, or retailer (not directly to the end consumer) — enabling businesses to offer branded extended warranty programmes backed by a regulated insurer.
B2B POLICYSum insured = the product's invoice value. The policy does not depreciate the asset — the full invoice value is available for repair or replacement during the extended warranty period.
INVOICE VALUECoverage — What the Extended Warranty Insurance Pays For
The Extended Warranty Insurance Policy covers a single, clearly defined risk: manufacturing defect failures during the extended warranty period. Understanding exactly what this means — and what it does not cover — is essential for both the manufacturer and the end consumer.
Extended Warranty Insurance covers manufacturing defects only — failures caused by something wrong with the product at the time it left the factory. It does NOT cover accidents (drops, spills, impact) or breakdowns from external causes. This is the same scope as the Original Manufacturer’s Warranty it extends. If a customer needs cover for accidental damage in addition to manufacturing defects, they should consider the All Risk / Portable Equipment Insurance policy which covers both manufacturing defects AND accidental damage, theft, and natural calamities.
The Extended Warranty Insurance Mechanism — From Sale to Claim
Extended Warranty Insurance operates on a B2B model — the policy is issued to the manufacturer, distributor, or retailer, not directly to the end consumer. Here is how the complete ecosystem works.
The manufacturer, distributor, or retailer enters into an agreement with the insurer (through Probitas as the broker) to offer Extended Warranty Insurance as a value-added product with their products. The master policy defines the eligible products, coverage terms, extension periods available, premium structure, and claims process. The insurer issues the master policy to the manufacturer or retailer as the policyholder.
When the manufacturer or retailer sells a product to an end consumer, they offer the Extended Warranty as an add-on to the sale — either bundled in the product price or offered at an additional charge. The product qualifies if it is: (a) a new consumer durable or electronic appliance, (b) purchased from an authorised dealer/retailer, and (c) comes with an Original Manufacturer’s Warranty. The consumer pays the Extended Warranty fee; the manufacturer/retailer pays the corresponding premium to the insurer.
An Extended Warranty Certificate is issued to the end consumer, documenting the product details (make, model, serial number, invoice value), the Original Manufacturer’s Warranty expiry date, and the Extended Warranty coverage period (start and end dates). The certificate confirms the insurance backing and the claims process. The consumer retains this certificate along with the purchase invoice for the product.
The Extended Warranty Insurance policy period commences exactly on the date the Original Manufacturer’s Warranty expires. During the OMW period, the manufacturer handles all warranty claims directly. Once the OMW expires, the Extended Warranty Insurance takes over — any manufacturing defect failure from this point is a claim under the insurance policy.
If the product fails due to a manufacturing defect during the extended warranty period, the consumer contacts the manufacturer’s / retailer’s service centre (or the insurer’s designated service network). The defect is assessed by an authorised service engineer. If confirmed as a manufacturing defect, the repair or replacement is authorised and either done cashlessly through the service network or reimbursed to the consumer after service.
When a retailer offers an extended warranty funded from their own balance sheet, the customer’s warranty protection is only as good as the retailer’s continued financial health. If the retailer closes down in year 3 of a 5-year extended warranty, the customer has no recourse. Insurance-backed extended warranties are different: the insurer (a regulated entity under IRDAI supervision) is the ultimate payer of claims, and their obligation to honour valid claims persists regardless of what happens to the retailer. This is the single most important argument for insurance-backed extended warranty over self-funded programmes.
Which Products Can Be Covered Under Extended Warranty Insurance
Extended Warranty Insurance is available for new consumer durable and electronic products purchased from authorised dealers or retailers, provided they carry a valid Original Manufacturer’s Warranty at the time of purchase.
For a product to be eligible for Extended Warranty Insurance: (1) it must be a new consumer durable or electronic appliance — not second-hand, refurbished, or pre-owned; (2) it must be purchased from an authorised dealer or retailer — not from an unverified marketplace or grey-market channel; (3) it must carry a valid Original Manufacturer’s Warranty at the time of purchase; and (4) the Extended Warranty must typically be purchased at or near the time of product purchase — most insurers do not allow Extended Warranty to be added to a product mid-way through its OMW period without inspection. The product’s serial number and invoice details are recorded in the Extended Warranty Certificate at the time of issuance.
Key Policy Parameters — Duration, Sum Insured, Premium, and Excess
Understanding the four key policy parameters helps manufacturers and retailers structure their Extended Warranty programmes correctly and price them competitively.
The Extended Warranty Insurance policy period commences on the date of expiry of the Original Manufacturer’s Warranty and remains in force for the period chosen for the extension. Example: A product with a 1-year OMW from date of purchase, with a 2-year Extended Warranty, would have EW Insurance coverage from Year 2 to Year 3 of the product’s life. The EW Insurance certificate specifies the exact start date (OMW expiry) and end date (OMW expiry + extension period). No claims arising during the OMW period can be made under the EW Insurance policy — those are the manufacturer’s own warranty responsibility.
The sum insured under the Extended Warranty Insurance policy is the invoice value of the insured product — the price actually paid by the consumer as per the purchase invoice. There is no depreciation applied to the sum insured. If the product is declared BER (Beyond Economic Repair) during the extended warranty period, the insurer pays the replacement cost up to the invoice value sum insured. For products where current replacement cost may have changed significantly from the original invoice value, replacement may be with a product of equivalent specification rather than an identical product if the original model is discontinued.
The premium for Extended Warranty Insurance depends on four variables:
• Type of asset: Product category (AC, refrigerator, laptop, TV) and brand — different product types have different historical failure rates.
• Invoice value: The product’s purchase price — higher-value products require higher premium to cover potential replacement cost.
• Failure rate: The actuarially assessed manufacturing defect failure rate for the specific product type — derived from insurer’s historical claims experience.
• Extension period opted: A 3-year extension carries higher premium than a 1-year extension, as the probability of failure accumulates over time.
Premium is typically expressed as a percentage of the product’s invoice value per year of extension. The overall Extended Warranty premium is modest relative to the product’s invoice value — typically 2%–6% of invoice value per year of extension, varying significantly by product type.
The applicability of excess (deductible) under the Extended Warranty Insurance policy is determined on a case-by-case basis depending on the product type, manufacturer’s preference, and the insurer’s underwriting terms. For consumer-facing extended warranty programmes where a seamless, zero-deductible customer experience is important, policies are often structured with no excess. For commercial or B2B extended warranty programmes, a modest excess may be applied to discourage frivolous claims. The excess structure (if any) is declared in the policy schedule and communicated to the end consumer at the time of Extended Warranty Certificate issuance.
| Feature | Original Manufacturer Warranty (OMW) | Extended Warranty Insurance | All Risk Policy |
|---|---|---|---|
| Covers manufacturing defects | ✓ Yes | ✓ Yes | ✓ Yes |
| Covers accidental damage | ❌ No | ❌ No | ✓ Yes |
| Covers theft | ❌ No | ❌ No | ✓ Yes |
| Coverage period | 1 year (standard) | 1–5 years (post OMW) | Annual, renewable |
| Insurance backing | Manufacturer’s own funds | Regulated insurer | Regulated insurer |
| Primary audience | End consumer | Manufacturer / retailer (B2B) | End consumer (direct) |
How to Process an Extended Warranty Claim
The claims process under Extended Warranty Insurance is designed to mirror the manufacturer’s warranty experience for the end consumer — quick, authorised service centre-based, and cashless wherever possible.
When the insured product fails due to what appears to be a manufacturing defect after the Original Manufacturer’s Warranty has expired, the consumer should first confirm that their Extended Warranty Insurance is active (the EW certificate end date has not passed). The consumer contacts the manufacturer’s authorised service centre or the dedicated Extended Warranty helpline number (as specified in the EW Certificate) to report the fault.
An authorised service engineer inspects the product to assess the nature of the failure. The engineer determines whether the failure is: (a) a manufacturing defect — covered under Extended Warranty Insurance; or (b) accidental damage, wear and tear, or another excluded cause — not covered under EW Insurance. A service report is prepared documenting the defect, its likely cause, and the recommended repair or replacement action. This report is the primary document for the insurance claim.
If the defect is confirmed as a manufacturing defect, the service centre or the manufacturer/retailer (as policyholder) notifies the insurer through Probitas Insurance Brokers. The claim intimation includes: Extended Warranty Certificate number, product details (make, model, serial number), invoice copy, service engineer’s report, and repair estimate or replacement recommendation. Probitas registers the claim and obtains a claim reference number from the insurer.
The insurer reviews the service report and claim documents. For straightforward manufacturing defect claims with a clear diagnosis, authorisation is typically fast — within 1–3 business days. Once authorised, the repair is carried out cashlessly at the authorised service centre (insurer pays the service centre directly) or the replacement product is arranged. For BER cases, the insurer settles the replacement cost up to the invoice value sum insured. The consumer receives a repaired or replaced product at no out-of-pocket cost for the manufacturing defect repair.
What Is NOT Covered Under Extended Warranty Insurance
Extended Warranty Insurance is intentionally narrow in scope — it covers manufacturing defects only, mirroring the OMW. All other causes of product failure are excluded.
Physical damage from accidental drops, impacts, liquid spills, or any external force. Extended Warranty covers manufacturing defects only — accidental damage requires a separate All Risk policy.
Gradual deterioration of the product from regular use over time. Wear and tear is an expected consequence of use, not a manufacturing defect, and is excluded from coverage.
Scratches, dents, surface marks, broken plastic panels, and any appearance-related damage that does not affect the product’s functional operation is excluded.
The cost of diagnosing or assessing the product fault is not covered under the Extended Warranty Insurance policy. Only the repair or replacement cost itself is covered.
Batteries, filters, water purifier membranes, printer ink cartridges, bulbs, and any other items designed for periodic replacement as part of normal product use are excluded.
Scheduled maintenance, annual servicing, cleaning, descaling, and routine service costs are excluded. These are normal ownership costs, not insurance claims.
Loss or damage caused by fire, theft, burglary, flood, lightning, or any natural calamity is excluded. These risks are covered under home insurance or All Risk (portable equipment) policies.
Damage occurring during delivery from the shop, installation at the consumer’s premises, or subsequent relocation of the product is excluded from Extended Warranty coverage.
Failure, corruption, or loss of software, firmware, or digital data stored on the insured device is excluded. The policy covers the hardware only, not the software or data component.
Any indirect financial loss resulting from the product failure — food spoilage from refrigerator breakdown, lost business from laptop failure — is excluded. Only the direct repair/replacement cost is covered.
The information and product comparisons displayed on this platform are intended solely for general informational and evaluation purposes, and do not constitute a legal offer or binding insurance contract. Specific policy features, premium rates, riders, and underwriting guidelines are determined exclusively by the respective general insurance carriers and may vary significantly based on the insurer, product tier, and location across multiple Indian states. All quotes and premium calculations generated on this website are indicative estimates based on preliminary data and do not guarantee final underwriting approval or policy issuance by the insurer. For comprehensive details regarding specific coverage terms, limits, and permanent exclusions, please refer directly to the official sales brochure and policy wording issued by the respective insurance company, which will take absolute legal precedence in the event of any discrepancy or dispute.
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By submitting you agree to our Privacy Policy and Terms & Conditions. Extended Warranty Insurance is a commercial B2B product subject to insurer underwriting and acceptance. Premium and coverage terms vary by product type, volume, and extension period. Information provided is indicative. Probitas Insurance Brokers Pvt. Ltd. · IRDAI Lic. No. 528.