How to Set Up a Warranty Program

Last updated October 5, 2026 · Reviewed by Michael Schroeder, Co-Founder & CEO at WarrantyHub

A customer needs to know what is covered and how to get help. Your service team needs clear rules for claims. Use this checklist to work through coverage, cost, service, and legal review before launch.

Warranty program setup checklist

Step 1: Decide what the warranty covers and for how long

List the products and serial number ranges this warranty will cover. Name the parts and failures covered, what you will do about a valid claim (repair, replace, or refund), and when coverage begins. A motor and a control board may need different coverage periods.

Expected product life and your own failure data are good starting points. Also check what your service team can handle and what similar products offer. The ranges below are rough context; confirm current terms before you settle on yours.

Step 2: Set the exclusions

Give your claims team a clear answer for damage outside the warranty. Exclusions depend on the product, but common ones include:

• Damage caused by misuse, abuse, or neglect
• Unauthorized modifications or repairs
• Normal wear and tear
• Consumable parts such as filters, batteries, or blades
• Damage from power surges, natural disasters, or accidents
• Commercial use of a consumer product
• Failure to follow installation or maintenance instructions

Write each exclusion so a customer can tell what it means. Have counsel check the wording against the products and markets you serve.

Step 3: Estimate claim costs and plan the reserve

Before launch, ask finance to put a number on likely claims. Start with your own claim history. For a new product, write down your assumptions and update the forecast as claims come in.

1. Estimate the claims rate: What share of units sold may generate a claim during the coverage period?
2. Estimate cost per claim: Include parts, labor, shipping, and administrative work.
3. Project claims: Apply the expected rate and timing to units sold or forecast sales.
4. Plan the reserve: Multiply projected claim count by average cost per claim. Finance can then decide how to account for the expected cost.

According to Warranty Week's 23rd Annual Product Warranty Report, claims among U.S.-based manufacturers averaged 1.3% of product sales in 2025. Treat that as background, not a reserve target for your product. Our warranty reserve and accrual guide covers the forecast and the accounting steps that follow.

Step 4: Set up product registration

Keep registration short: product, serial number, purchase date, and contact details. A QR code on the packaging can open the form on a phone. Plan for customers who never register; they may still have proof of purchase.

Product registration can speed up claim checks and give you a record of products in use for recalls and updates. Link registration to claims to spot failures by batch or supplier. If you offer optional extended service contracts, keep those offers separate from the base warranty and make the choice clear.

Step 5: Build the claims process

Run a test claim before launch, including one with no registration record. The path should be clear from first contact to repair, replacement, or refund.

1. Intake: Offer a clear online, phone, email, or dealer path. Structured forms can collect serial numbers, photos, and a description of the failure.
2. Validation: Check coverage and purchase records before sending the claim to a reviewer.
3. Evaluation and routing: Define decision criteria and send the case to the right team, technician, or service center.
4. Resolution: Plan parts, field service, replacement, or return merchandise authorization (RMA) work.
5. Status updates: Tell customers what happens next and let them check progress without calling for every update.

Rules for intake and routing can save your team handoffs, but they need an exception path. Try missing purchase records, disputed exclusions, unavailable parts, and repeat repairs. If those steps live in separate inboxes and spreadsheets, claims management software can keep the claim record, handoffs, and updates together.

Step 6: Have counsel review the written terms

Put the coverage, exclusions, time period, remedies, and service steps in one document. Have a service lead read it against a real claim: would the team make the decision the terms promise? Then ask qualified counsel to review the language and where customers see it before purchase. Our warranty policy guide lists topics to bring to that review.

Step 7: Track claims and adjust the program

Track what actually happens: claim rate, average claim cost, time to close, and repeat failures. Sort the results by model, batch, and supplier. When you see a pattern, send it to product and quality, update the cost forecast, and change the service process or future coverage if needed. Use the same warranty KPIs from month to month. As claim volume grows, warranty tracking software can help you trace a spike in costs or repeat failures back to individual cases.

"Access to important metrics that improve product quality" — WarrantyHub Customer

Types of Product Warranties

An express warranty is a specific promise about a product. An implied warranty may apply under law even without a written promise, and its scope varies by jurisdiction. For U.S. consumer products, a written warranty may carry the legal label full or limited under the Magnuson-Moss Warranty Act. Ask counsel which designation fits your terms.

An optional extended warranty or service contract has its own price, terms, and claims process. Some are sold as aftermarket warranties through dealers or third parties. Decide when the extra coverage starts and how claims move from the base warranty to that contract.

What to check under Magnuson-Moss

The Magnuson-Moss Warranty Act sets federal rules for written warranties on U.S. consumer products. For covered products over $15, FTC rules specify what a written warranty must disclose and how customers can read it before buying. The rules for labeling a warranty full or limited have a different threshold. The Act also restricts disclaimers of implied warranties and requirements to use a particular brand of parts or service. Ask counsel how these rules apply to your product.

Read our Magnuson-Moss Warranty Act guide alongside the FTC's business guidance, then have qualified counsel review your warranty before publication.

This guide is general information, not legal advice; have qualified counsel review your warranty terms.

Managing the program as volume grows

Claims that fit in an inbox at low volume get harder to assign and track as sales grow. Watch for slow resolutions, missed supplier recoveries, and claim records that do not match registration records. If your team has to search email and spreadsheets to answer a basic cost question, bring those records together.

"Reduced overhead and increased NPS across the board." — WarrantyHub Customer

Choosing warranty management software

If manual handoffs are slowing the program, evaluate manufacturer warranty management software against the steps above. Ask vendors to show the path for a registered product, one with only a receipt, and a claim outside coverage. Check:

• Claims management: Intake, coverage checks, approvals, routing, resolution, and an audit trail.
• Product registration: QR code registration, serial number lookup, and a record of products in use.
• Policy management: Warranty policy configuration for products, components, terms, and coverage periods.
• Customer portal: A place to register, submit a claim, and check status.
• Reporting: Warranty analytics for claim rates, cost, cycle time, and defect patterns.
• Supplier recovery and returns: Records for recovering costs from suppliers and handling RMAs.

Ask for an implementation plan that covers data imports, policy setup, integrations, and training for your team.

"The deployment was painless." — WarrantyHub Customer