More on Home Insurance
More on Home Insurance
Updated January 14, 2021
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If your household appliances are damaged in a fire or weather event, your homeowners insurance can reimburse you for the loss. Appliances that break down due to electrical and mechanical failure typically aren’t covered by home insurance, but some insurers give you the option of supplementing that gap in coverage by adding equipment breakdown coverage to your policy for an additional premium.
Equipment breakdown coverage is 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 coverage endorsement.
Equipment breakdown coverage is a homeowners insurance policy endorsement that covers electrical and mechanical breakdown
Equipment breakdown coverage protects most equipment and built-in systems in your home, including your HVAC, water heater, and personal computers
Property that breaks down due to normal wear and tear typically isn’t covered by equipment breakdown coverage
Equipment breakdown covers damage to household systems, appliances, and electronic equipment that is caused by mechanical or electrical failure. Many insurance companies now offer equipment breakdown coverage as an add-on to your homeowners insurance for as little as $2 a month.
Equipment breakdown coverage can help cover the cost of physical loss or damage resulting from the following:
Mechanical breakdown, like if your water heater ruptures
Electrical breakdown from a power surge
Breakdown due to improper installation
Pressure systems breakdown
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.
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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:
Computers and computer equipment
Refrigerators and freezers
Washers and dryers
Ovens and microwaves
Boilers and furnaces
Home entertainment systems
Home gym equipment like a treadmill
Electrical power panels
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
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. If you live in an older home or recently moved into a house with aging systems and appliances, adding equipment breakdown coverage to your policy is a no-brainer.
No. A 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 you can choose to add to 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.
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.
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