UK: Home appliance cover warrants a second look

Norwich Union Direct has re-launched its multi-appliance breakdown product, designed to cover the main appliances in the home.

‘Home Appliance Cover’, which replaces ‘Appliance Breakdown Cover’, covers most home appliances against mechanical or electrical breakdown. As well as covering the usual mod cons, ‘Home Appliance Cover’ also covers DVD players, digital TVs and cooker hoods.

Some of the key features of ‘Home Appliance Cover’ include:

• Option to cover appliances up to five or eight years old
• Cover starts from Ł8.99 per month (Ł7.99 for existing customers)¹
• Covers an unlimited number of main home appliances under one policy – for example, a customer could have three televisions covered at no extra charge²
• Quick and easy to get cover – with no need to give details of appliances
• New for old replacement on appliances under five years old, which are beyond economical repair³
• Option to buy over the phone or on the internet
• No policy excess

Commenting on the updated product, Frankie Nicholson, product development manager at Norwich Union, said: “Many homeowners take out extended warranties when buying their appliances from electrical retailers, but a recent Office of Fair Trading report suggested that these policies can add around 50 per cent to the cost of goods. Most extended warranties also only cover one appliance, so the cost of covering all electrical goods can really add up.

“Because our policy covers a number of household appliances, it offers real value for money – particularly for families who have more than one TV, hi-fi or video recorder, as well as washing machines and cookers. Customers can also benefit from the convenience of having one policy for all their appliances - up to eight years old.”

If an appliance breaks down, Norwich Union Direct will appoint an engineer to call the customer and arrange a time for repair. The policy covers the cost of the call-out charge, parts and labour.

For more information about ‘Home Appliance Cover’, customers should call Norwich Union Direct on 0800 096 4717 or visit www.norwichuniondirect.co.uk.

Media contact: Liz Kennett/Lucy Haughey at Norwich Union on 08703 66 68 63

Notes to editors:

¹ Ł7.99 for existing Norwich Union Direct customers with a motor or household policy
² The appliances covered by Home Appliance Cover are:

• Washing machine/washer dryer
• Tumble dryer
• Dishwasher
• Cooker, oven or hob
• Cooker hood or extractor
• Microwave oven
• Fridge, freezer or fridge/freezer
• Television (includes digital and integrated TVs) and satellite receiver
• DVD Player
• Video recorder - non-portable
• Non-portable audio system

³ With the 8 year option, if an appliance is 5 years old or more and is uneconomic to repair, Norwich Union Direct will contribute 25% towards the cost of a new item, provided it is replaced through its network of approved suppliers.

To help keep down the cost and avoid duplication of cover, accidental damage and other cover provided by household policies are not included.

The brown and white goods extended warranty market was worth Ł828 million in 2001 (source: Datamonitor UK Extended Warranty report 2002).

The Office of Fair Trading released a report on the extended warranty market in July 2002, the outcome of which was a referral to the Competition Commission. The results of the Competition Commission’s investigation are due in Summer 2003.

Comparison of the cost of some extended warranty policies available in the market:

• Comet’s 5 year extended warranty on Ł380 washing machine - Ł164.99
• Dixon’s 5 year extended warranty on Ł550 television - Ł195.00
• Curry’s 5 year extended warranty on Ł500 gas cooker - Ł109.00
• Totals Ł468.99 for just 3 appliances
• The cost of Home Appliance Cover for 5 years on an unlimited number of most home appliances over a 4 year period (excluding the 1 year manufacturer’s standard guarantee), starts from Ł431.22.
• Source: from various websites

• Norwich Union is the UK’s largest insurer. In general insurance it is more than 1.5 times the size of its nearest competitor, and has a 19 per cent share of the market.
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  • one in five motor vehicles
  • more than 700,000 businesses
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