Appliance protection plans vs. the manufacturer's warranty: what the FTC says to compare

When you buy an appliance, the seller may offer a protection plan. The Federal Trade Commission (FTC), the federal consumer protection agency, calls this an "extended warranty or service contract." This page sets out how the FTC describes it next to the warranty that may come with the product, and the questions the FTC lists. It does not tell you whether to buy a plan.

The short answer

Different things: the FTC says an extended warranty or service contract "costs extra and is sold separately from a product," and is "different from the warranty that may automatically come with a product."¹
They can overlap: the FTC says these contracts cover repairs and/or maintenance for a set time, "but your warranty may cover the same repairs for the same time."¹
Limits apply to both: the FTC says a warranty "won't necessarily cover all situations or repairs," and an extended warranty or service contract "won't cover all situations or repairs." For a service contract, "If it isn't listed in the contract, assume that it's not covered."¹²
Cancellation and refunds: the FTC pages we used do not describe them. One state's example, Texas, is below.

Two words, and what sellers call them

A warranty is a promise to stand behind a product. The FTC says "Manufacturers or sellers often include a warranty."¹ A service contract is a separate agreement you pay extra for. The FTC uses "extended warranty" and "service contract" together.² Texas's regulator says service contracts are quite often called "extended warranties, extended services, extended service agreements and protection plans." It adds that a consumer has the same protection under the Texas statute no matter what the contract is called.³

Side by side, as the FTC describes them

The warranty that may come with an appliance and an extended warranty or service contract, as the FTC describes them
Topic	Warranty that comes with the product	Extended warranty or service contract
How you get it	The FTC says it "may automatically come with a product."¹	It "costs extra and is sold separately from a product."¹
Who stands behind it	The FTC says "Manufacturers or sellers often include a warranty."¹	The FTC says it is "not necessarily the manufacturer and might be a company you don't know." It says to find out who is offering it and how long the company has been in business.²
Reading it before you buy	The FTC says "Whenever there's a warranty, the law says it must be available for you to read before you buy," in person or online.¹	The FTC says to read the details of the contract.² Its pages do not describe a federal pre-sale rule for these contracts.
What to check on coverage	Are specific parts or repairs not listed? What will the company do if the product fails: repair, replace or refund? Does it cover problems if you change how the product works or misuse it, or only if you maintain it as directed?¹	Does it cover accidental damage? Can the company deny coverage if you do not follow its instructions for routine maintenance? Does it cover only specific parts or repairs?²
Claims and repairs	Do you contact the manufacturer or go back to the original seller? Do you pay for labor or for shipping the product back?¹	How do you make a claim? Who takes care of repairs? Do you need to return the item to the store where you bought it?²
Costs to look for	Labor and shipping for repairs (see the row above).¹	The initial cost, plus deductibles or fees each time the product is serviced, shipping to a repair center, a fee to transfer the contract, and limits on reimbursement amounts.²
Tie-in rule	The FTC says federal law bars a manufacturer from requiring specific parts or services to keep warranty coverage, unless it provides them free or gets an FTC waiver.¹	The FTC pages we used do not describe a similar rule for service contracts.
Cancelling and refunds	The FTC page does not describe this.	The FTC pages do not describe it. See the Texas example below.

Implied warranties: a third protection

The FTC says "Laws in every state create implied warranties - unspoken promises - that cover almost everything you buy." Two examples are a warranty of merchantability, where the seller promises a product will do what it is supposed to do, and a warranty of fitness for a particular purpose.¹ It says implied warranties cover products even without a written warranty, "unless the seller gives a written notice that there's no warranty, or marks the product 'as is,' if your state law allows that." It also says implied warranties "might cover problems a written warranty doesn't" and "last as long as four years in some states."¹ The FTC advises contacting a lawyer or a state consumer protection office for your state.¹

One state's cancellation example: Texas

This is one state's rule, not a national one. Texas's regulator, TDLR, says a service contract holder who bought on or after January 1, 2012 "may cancel the service contract at any time, even if you have made a claim." If you cancel before the 31st day after purchase, the provider must refund the full purchase price, decreased by claims paid, and may not impose a cancellation fee. On or after the 31st day, it must refund a prorated price, decreased by claims paid, and may impose a reasonable fee not to exceed $50.³ TDLR says your contract "should state the terms and requirements for cancelling your contract and obtaining a refund."³ Rules in other states differ. See home warranty cancellation and refund rights and vehicle service contract cancellation for more states.

If there is a problem

For a product problem, the FTC says to contact the seller first. If the seller does not resolve it, write to the manufacturer. Sending the letter by certified mail with a return receipt proves the company received it.¹ The FTC says "a company may have the right to fix the product before it refunds your money," and that if you report a defect during the warranty period and it is not fixed properly, the company must correct it "even if your warranty expires before the product is fixed."¹ For an extended warranty or service contract, the FTC says to report problems at ReportFraud.ftc.gov or to your state attorney general.²

Where this fits our standard

Point 1 of our standard asks whether contract terms and exclusions are disclosed in plain language before purchase. The questions above are a way to check that yourself.

How to verify this yourself

Open the two FTC pages (references 1 and 2). Every FTC statement above comes from them.¹²
Open the TDLR FAQ (reference 3) for the Texas example, and find the question "I bought a service contract, but I have changed my mind."³
Read your own warranty and any plan side by side. Mark the covered parts, the exclusions, how to claim, any fees and how to cancel.

What this page is not

This is general information, not legal or financial advice. It does not say whether you need a protection plan, whether any plan is worth its price, or whether any seller or provider is reliable. It covers warranty education only. The FTC pages are general consumer information. Rules and refund rights differ by state and by contract.

What to do next

Put your appliance warranty and any plan in front of you and answer the questions in the table from the documents themselves. Then read how appliance warranties work and extended warranty vs. manufacturer warranty. Start from the other warranties and protection plans hub.

Last reviewed 3 October 2026. General information from the cited primary sources; not legal advice.