Is the Extended Warranty permissible in Islam?

[MasoomBoy]

Salaam Alaikum Sheikh,
I would like to know if Extended Warranty on products is permissible in Islam?

Jazak Allah khair

Brother in Islam

[Aslam AbuIsmaeel]

Wa alaikumussalaam wa rahmatullah

Extended warranty on a purchased item in exchange for money is not permissible due to it being a payment of money for a return benefit that may or may not be acquired - this is the risk that is forbidden in Shariah as with gambling prohibition. 

As for the company being prepared to repair it if it was faulty for the extended period of time, that should be like the basic warranty or else it would be risk type gambling and thus haraam.

As for the basic warranty, the reason it is halaal is that the company produced this item to a degree of quality that the item will be sound and functional for such a period of time.  That is what the person is paying money for and if the item does not perform to what it was made for and paid for, then it is the fault of the company and thus repaired.   This is the basic period of warranty.  As for the extended one, had that item been made to stay that long, the price should not change as the price is paid for what is the reasonable expected time of functionality from such an item.

Thus the basic period of warranty is permissible where as the extended warranty in exchange for additional charge is not - and Allah knows best.

Wassalamu alaikum

[Curious George]

Salaam,

What about for things that last a lot longer than their warranty period?  For example, a new house may come with a 7 year warranty, with the option of upgrading to a 10 or 15 yr warranty at an additional cost.  Now everyone knows that most houses (99.999%) last for at LEAST 20+ yrs (excluding natural disasters, terrorism etc.)...with many houses still remaining functional after 50 years.  Is there a harm in getting the extended warranty then for peace of mind?  I'm not talking about items that breakdown through normal usage, as that would be a maintenance issue.  But if like randomly after 10 yrs a wooden stud just decided to give way, randomly....couldnt you take the extended warranty to cover once-in-a-blue-moon incidences like that?  Or what if the problem is there from the start, but only becomes noticeable after the basic warranty period is over (as is the case a lot of the time).  As I understand it some manufacturers provide the warranty to help increase the sale of the product/provide the customer with some sense of security and not so much to provide an accurate estimate of how long the product itself should last.

I apologize if you've already answered this in your last message and I didnt quite understand it :$