By Simon Fletcher, QBE Insurance Europe
Back in November, AM asked “Are warranties worth the paper they are written on?” after some consumer research revealed a lot of dissatisfaction.
Over the years, warranty has received a mixed press. The bad press reveals horror stories of claims not being paid, customers not being informed of all the facts, or being misinformed. There have also been cases where whole warranty programmes have disappeared when providers go into receivership, rendering the policies useless.
But warranties have been around for many years. They have paid out on hundreds of millions of pounds-worth of claims. If they really aren’t worth the paper they are written on, why is it that so many are sold?
The right warranty product provides a high value, relatively low cost proposition for retail customers and dealers. They offer multi-point income streams for dealers, enhanced customer satisfaction and improved customer retention.
In addition they provide a mechanism for customers to protect their investment and assist in their financial planning during the ownership period. Ultimately they provide peace of mind.
The key to this product is in the quality of the provider and its offerings. It doesn’t just stop with providing a piece of paper and an administration service.
Providers have a responsibility to ensure that products are marketed in the correct manner. Their duty of care starts with an education process that includes product coverage, accurate qualification, legislation and best practices.
Sales people will make informed recommendations, the customer gets the right product and their view of the warranty sector will improve.
Email your views to email@example.com – tell us if you agree.