What is equipment breakdown coverage?

Equipment breakdown coverage functions similarly to a home warranty, protecting your appliances if they break down because of a mechanical or electrical failure.

Pat Howard 1600

Pat Howard

Published March 29, 2019

If a household appliance is damaged by a covered loss like a bad storm or fire, your homeowners insurance company will typically reimburse you for the loss. But if your appliance stops working because of an electrical or mechanical failure, you’ll need equipment breakdown coverage in order to be covered.

Equipment breakdown coverage functions similarly to a home warranty, covering everything from refrigerators to furnaces to home entertainment systems if they break down. The difference is that you can add equipment breakdown coverage to your home insurance policy as an endorsement; a home warranty is typically a separate product that you buy through a separate entity.

Equipment breakdown coverage is also a pretty cheap add, typically costing anywhere from $25 to $50 annually for $50,000 of coverage. Check out what kind of additional coverages your insurance company offers. If you want additional protection for your home appliances, you should consider an equipment breakdown endorsement.

What does equipment breakdown insurance cover?

Equipment breakdown coverage protects a variety of different appliances and devices in your home when they break down because of a covered incident. It may even cover certain residual losses like food spoilage.

Here are some examples of covered equipment:

  • Heating and air conditioning systems
  • Computers and computer equipment
  • Data restoration
  • Refrigerators and freezers
  • Food spoilage
  • Washers and dryers
  • Ovens and microwaves
  • Boilers and furnaces
  • Water heaters
  • Back-up generators
  • Home entertainment systems
  • Sump pumps
  • Home gym equipment like a treadmill
  • Jacuzzis
  • Electrical power panels
  • Home security systems

A typical equipment breakdown endorsement will give you around $50,000 in coverage for damaged appliances per occurrence. An occurrence could be a single power surge that destroys multiple appliances in your home, or something smaller like your refrigerator breaking down and the resulting food spoilage.

With equipment breakdown coverage, you typically have to pay anywhere from a $250 to $500 deductible before coverage kicks in, meaning your insurance company will only reimburse you after you pay that amount.

Once you pay your deductible your insurer may reimburse you for the following:

  • Any temporary repairs you already made
  • Cost of expediting permanent repairs or replacement
  • Cost of any spoilage that resulted from a covered occurrence
  • Additional living expenses resulting from a covered occurrence

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When are you covered by equipment breakdown coverage?

As we went over previously, equipment breakdown coverage essentially picks up where you home insurance policy left off, covering mechanical or electrical damage to your appliances. However, this endorsement also has a couple exclusions which we’ll go over shortly.

When your equipment is covered

Your equipment breakdown coverage endorsement will reimburse you for physical loss or damage resulting from:

  • Mechanical breakdown, including rupture or bursting that’s caused by a centrifugal force
  • Accidental breakdown caused by improper installation
  • An artificial electrical current, like electric arcing
  • Pressure systems breakdown

When your equipment is not covered

You won’t be reimbursed for appliance repairs or replacement if the damage or loss is caused by wear and tear, including rust or corrosion, deterioration, any defects, mold, cracking, shrinking or expanding, or pest damage.

Like homeowners insurance, equipment breakdown coverage won’t reimburse you for something that breaks down because it’s old, corroded, or just poorly taken care of. If you have old appliances, you may need to self-insure for their replacement.

Is equipment breakdown coverage worth it?

An equipment breakdown endorsement is a tremendous value for the amount of coverage you’re getting. At $25 to $50 a year, you’re essentially getting protection for pennies a day.

Many carriers also now offer high-efficiency replacements for appliances, like Energy Star water heaters, HVAC systems, and refrigerators if yours go kaput.

Is equipment breakdown coverage the same as a home warranty?

No. Your home warranty is a separate product that’s typically sold by a home warranty company, not a property insurance company. Equipment breakdown coverage is simply an upgrade for your homeowners insurance policy.

Home warranties are also more expensive than equipment breakdown coverage, costing anywhere from a couple hundred to a thousand dollars a year, and you’re typically only covered for equipment that’s specifically listed in your warranty. With an equipment breakdown endorsement, your coverage is for all applicable property in your home.

Additionally, home warranties are typically bound by a contract — typically up to a year — whereas equipment breakdown coverage lasts as long as your home insurance policy is in force.

Curious about the best insurance companies for equipment breakdown insurance and other types of additional coverages? Look no further than a licensed agent at Policygenius who can help you find that extra bit of coverage for your home.

Insurance Expert

Pat Howard

Insurance Expert

Pat Howard is an Insurance Editor at Policygenius in New York City, specializing in homeowners insurance. He has been featured on Property Casualty 360, MSN, and more. Pat has a B.A. in journalism from Michigan State University.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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