Equipment breakdown coverage: What it is & who needs it

Equipment breakdown coverage covers household systems and appliances if they're damaged because of a mechanical or electrical failure.

Pat Howard 1600

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Pat Howard

Pat Howard

Managing Editor & Licensed Home Insurance Expert

Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

Updated|2 min read

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What is equipment breakdown coverage?

Equipment breakdown coverage is a homeowners insurance endorsement that helps pay for appliance damage caused by an electrical or mechanical failure. A standard home insurance policy covers home appliances when they're damaged by a covered peril, but it won't cover mechanical or electrical breakdown — or anything else that's considered a maintenance issue.

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Key takeaways

  • Equipment breakdown coverage covers your household appliances when they're damaged because of an electrical or mechanical failure.

  • Covered systems and appliances include HVAC systems, water heaters, kitchen appliances, and personal computers.

  • While not included in most homeowners policies, most insurance providers offer equipment breakdown coverage as an optional add-on.

  • Equipment breakdown coverage generally won't cover appliances that break down due to normal wear and tear.

What does equipment breakdown insurance cover?

Equipment breakdown coverage covers household systems and appliances if they're damaged or break down due to an electrical or mechanical failure. Most insurance providers offer this coverage as an endorsement that you can add to your homeowners insurance policy for a small additional premium.

Equipment breakdown coverage protects a variety of different appliances and devices in your home when they break down because of a covered incident. Here are some examples of covered appliances and losses:

Depending on your provider, you may be able to add up to $50,000 in equipment breakdown coverage that you can use for any single 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.

What does equipment breakdown coverage not cover?

Equipment breakdown coverage won't coverage appliance replacement or repairs if the damage or loss is the result of normal wear and tear, including rust or corrosion, deterioration, any defects, mold, cracking, shrinking or expanding, or pest damage.

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How much does equipment breakdown coverage cost?

It costs anywhere from $25 to $50 a year to add equipment breakdown coverage to your homeowners insurance policy. Though keep in mind you'll also have to pay a separate deductible if you file a claim for appliance breakdown.

These deductibles are anywhere from a $250 to $500, meaning you'll have to pay that amount before your insurance provider will cover the remainder of the loss

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

Equipment breakdown coverage vs. a home warranty

A home warranty is a separate product that’s typically sold by a home warranty company, while equipment breakdown coverage is an additional coverage for your homeowners insurance policy.

Home warranties are more expensive than equipment breakdown coverage, costing anywhere from a couple hundred to a thousand dollars a year. Home warranties also only cover appliances that are specifically listed on your warranty. With an equipment breakdown endorsement, coverage extends to all applicable property in your home.

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

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Frequently asked questions

Is equipment breakdown coverage worth it?

An equipment breakdown endorsement is a great value for the amount of coverage you’re getting. This coverage also comes with excellent perks, as many carriers now offer high-efficiency replacements for appliances, like Energy Star water heaters, HVAC systems, and refrigerators. If you live in an older home or recently moved into a house with aging systems and appliances, adding equipment breakdown coverage is a smart decision.

What is an example of equipment breakdown coverage?

A power surge frying your electronics, a boiler cracking due to low water conditions, and short-circuit damage to your appliances are all examples of electrical or mechanical breakdown that would be covered by equipment breakdown coverage.

What is the difference between a home warranty and equipment breakdown coverage?

Equipment breakdown coverage functions similarly to a home warranty, covering everything from your refrigerator to your furnace and home entertainment systems. The main difference is equipment breakdown coverage is purchased through insurance companies, whereas home warranties are purchased through specialized home warranty companies. While equipment breakdown coverage is significantly more affordable than home warranty plans, it typically doesn't cover appliances that break down due to normal wear and tear.

Author

Managing Editor & Licensed Home Insurance Expert

Pat Howard

Managing Editor & Licensed Home Insurance Expert

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Pat Howard is a managing editor and licensed home insurance expert at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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