Home appliance insurance, also known as a home warranty, is a type of insurance that covers home systems and appliances in the home. A home warranty covers the repair, replacement, or maintenance of your major residential systems and appliances. It provides a financial backstop in the event that a high-ticket item needs servicing, as well as an extension to manufacturer warranties.
The warranty company connects you with its affiliated contractors, so you can make one call for any covered appliances or systems and don’t have to look for individual contractors on your own. A home warranty may also reimburse you for replacement goods. So, how does home appliance insurance work? What does it cover? And how long does it last? Keep reading to find out!
What Is Home Appliance Insurance?
Home appliance insurance is a consumer convenience product that protects you against the risk of incurring significant out-of-pocket expenses if an appliance or system breaks down. A home warranty isn’t the same as homeowners insurance, which has a different function. In general, homeowners insurance covers property damage caused by calamities such as fire, theft, hail, wind, and vandalism. It also covers liability for visitors’ injuries while on the policyholder’s premises.
A house appliance insurance, on the other hand, covers appliances and systems that break down and aren’t covered by homeowners insurance or a manufacturer’s warranty. A home warranty may be purchased at any time, regardless of the age of your home or its condition. However, most often, home warranties are acquired during a real estate transaction either by the seller as an inducement to close the deal or by the buyer for protection against future problems.
If a problem arises with an appliance or system covered by the contract, you can submit a service request, and the home warranty company will send out a specialist to inspect, diagnose, and repair it. You’ll pay between $60 and $150 in service fees. The warranty company has the option of replacing the item with a comparable replacement or giving a cash settlement based on its charging policies.
A home appliance insurance only covers the items listed in the contract. Some home warranties cover appliances, while others cover more complex systems like heating and air conditioning. More comprehensive warranties may be purchased to cover both. To cover smaller components such as a sump pump, well pump, or septic tank, you can add ons to your home insurance policy. In the end, the ideal house insurance is one that best fits your coverage needs based on the age and state of your appliances and systems.
What Does a Home Appliance Insurance Cover?
A home appliance insurance typically covers the repair or replacement of major appliances and systems in your home, such as air conditioners, refrigerators, ovens, dishwashers, washers/dryers, and water heaters. Most policies exclude coverage for light bulbs, smoke detectors, faucets, filters (air and water), paint touch-ups, weather stripping — essentially any maintenance item.
If you have a problem with an appliance or system covered by your contract during the policy period — usually one year — you can submit a service request to the home warranty company. After you pay a service fee (between $60 and $150), a specialist will be sent out to inspect the item. The specialist will diagnose the problem and, if possible, make the necessary repairs. If the item can’t be repaired or if it would cost more to repair than replace it, the home warranty company will provide a replacement. The replacement may not be identical to the original item but will be comparable in function and quality.
Some home warranty companies also offer coverage for ancillary items such as pools, spas, solar panels, guest houses/cottages, well pumps, and septic tanks. You can either purchase this additional coverage as part of your policy or as an add-on.
What Doesn’t a Home Appliance Insurance Cover?
It’s important to read your home appliance insurance policy carefully so that you understand what’s covered and what isn’t. In general, there are three types of exclusions:
- Pre-existing Conditions: Most home warranty companies exclude coverage for any appliance or system that was not functioning properly at the time the policy was purchased.
- Improper Maintenance: Home warranty companies typically require you to maintain your appliances and systems in accordance with the manufacturer’s instructions. If you don’t, any resulting damage may not be covered by your policy.
- Improper Installation: Many home warranty companies will not cover damage caused by improper installation. For example, if an air conditioner is not installed according to the manufacturer’s instructions and subsequently breaks down, the home warranty company may refuse to pay for the repairs.
- Items under the Manufacturer’s Warranty: Most home warranty policies exclude coverage for items that are still under the manufacturer’s warranty.
- Damage done by Pets: Home warranty companies typically exclude coverage for any damage done by pets.
- Cosmetic Defects: Home warranty policies also exclude coverage for cosmetic defects such as scratches, dents, and stains.
- Changes to New Equipment: Some home warranty companies exclude coverage for any changes made to an appliance or system after it’s installed. For example, if you add a new component to your air conditioning system, it may no longer be covered by your policy.
- Secondary Damages: Home warranty companies typically exclude coverage for any secondary damages caused by a covered appliance or system. For example, if your washing machine leaks and causes water damage to your floor, the home warranty company will only pay to repair or replace the washing machine. The cost of repairing the floor would be excluded.
It’s also important to know that home appliance insurance policies have a limit on the amount they’ll pay out for each repair or replacement. This limit is called the “per occurrence” limit, and it’s usually between $500 and $2000. So if the cost of repairing or replacing an item exceeds the per occurrence limit, you’ll have to pay the difference yourself.
Home appliance insurance policies also have a maximum coverage limit, which is the total amount the policy will pay out during the policy period. This limit is usually between $2000 and $5000. Once you reach the maximum coverage limit, the home appliance insurance policy will no longer pay for any repairs or replacements.
Home appliance insurance is a good way to protect your property while also cutting costs on repairs. If you’re thinking about investing in a house warranty, do your homework and shop around. Make sure you know what’s covered and prohibited under each plan before deciding which one to use. First Premier Home Warranty provides repair and service options for a variety of home appliances. Get in contact with us immediately or get a free quote to learn more about purchasing breakdown coverage for home equipment and lowering your electricity costs.