Home appliance insurance, also known as a home warranty, is a type of insurance that covers the repair or replacement of home appliances. It can be a great option for many homeowners, but there are also some potential drawbacks to consider before deciding if it’s right for you.
Home warranties offer various benefits and have been gaining popularity among homeowners. According to a study by Allied Market Research, the global home warranty service market was worth $7.3 billion in 2020 and is projected to reach $13.6 billion by 2030; this indicates a compound annual growth rate (CAGR) of 6.3 percent from 2021 to 2030.
Home appliance insurance protects your home’s appliances and systems from breaking down due to normal wear and tear. If something does go wrong, you can get it repaired or replaced without spending a lot of money.
Most home warranty plans will cover big appliances like your HVAC and washing machine, but it’s also useful to know that they often come with minor appliance coverage as well. This add-on protection might include items such as microwaves, trash compactors, septic systems, sprinkler systems, refrigerators, or freestanding ice makers–the list goes on. If you want even more comprehensive coverage for your home necessities, many of these additional services can be tacked onto your initial plan.
In this article, we will discuss what home appliance insurance covers and doesn’t cover, as well as the pros and cons of this type of coverage.
Are Home Appliance Insurance Policies Worth It?
As a homeowner, you want to do everything possible to protect your home. One way you can do this is by purchasing home appliance insurance. But is this type of insurance policy worth the cost? Let’s take a look at what home appliance insurance covers and doesn’t cover, as well as the pros and cons of this type of coverage.
Home appliance insurance policies vary, but in general, they will cover big appliances like your HVAC system and washing machine. Some policies also offer coverage for minor appliances such as microwaves, trash compactors, septic systems, sprinkler systems, refrigerators, or freestanding ice makers. If you want even more comprehensive coverage for your home necessities, many of these additional services can be tacked onto your initial plan.
What Are The Pros of Home Appliance Insurance?
There are several pros to having home appliance insurance. Among these, we can include the following:
- Unforeseen Expense Coverage: One of the biggest pros is that home appliance insurance can cover unforeseen expenses. If your washing machine breaks down and needs to be replaced, for example, you won’t have to pay out of pocket for a new one.
- Flexible Coverage: Home appliance insurance policies are often flexible, which means you can tailor them to fit your specific needs.
- Protection Against Depreciation: Another big pro is that home appliance insurance can protect you against the depreciation of your appliances. If you need to replace an appliance, the insurance policy will cover the cost of a new one, minus any depreciation.
- Convenience: Home appliance insurance can be a big-time saver. If something goes wrong with your appliances, you can simply call the insurance company, and they will send someone to repair or replace the item.
- Peace of Mind: Perhaps the biggest pro of all is that home appliance insurance can give you peace of mind. Knowing that your appliances are covered can take a lot of stress from owning a home.
- Great Addition To Your Homeowner’s Insurance: Home appliance insurance can be a great addition to your homeowner’s insurance policy. Many homeowner’s insurance policies do not cover the cost of repairing or replacing appliances, so having both can give you peace of mind knowing that all of your bases are covered.
- Continuation of a Manufacturer Warranty: In some cases, home appliance insurance can act as a continuation of a manufacturer warranty. If your washing machine is no longer covered by the manufacturer’s warranty and it breaks down, the home appliance insurance will cover the cost of repairs or replacement.
- Increased Home Value: Some home appliance insurance policies will actually increase the value of your home. If you have a policy that covers major appliances, for example, this can be a selling point if you ever decide to put your home on the market.
- Affordable Home Appliance Insurance Coverage: Home appliance insurance is often more affordable than you might think. In many cases, it will only cost a few dollars per month to add this type of coverage to your homeowner’s insurance policy.
As you can see, there are several pros to having home appliance insurance. However, there are also some potential drawbacks that you should be aware of before making a decision.
What Are The Cons of Home Appliance Insurance?
There are also several potential drawbacks to home appliance insurance that you should consider before making a decision. These can include the following:
- Potential for Fraud: One of the biggest potential drawbacks is that home appliance insurance can be susceptible to fraud. Some unscrupulous companies may try to take advantage of customers by overcharging for repairs or replacements. It’s important to do your research and only purchase home appliance insurance from a reputable company.
- May Not Cover Everything: Another potential drawback is that home appliance insurance may not cover everything in your home. Some policies only cover major appliances, while others may exclude certain items like electronics. Be sure to read the fine print of any policy you’re considering to know exactly what’s covered.
- Deductibles: Home appliance insurance policies often have deductibles, which means you will have to pay a certain amount out of pocket before the insurance company will cover repairs or replacements. The size of the deductible can vary, so be sure to compare policies before making a decision.
As you can see, there are some potential drawbacks to home appliance insurance that you should be aware of before making a decision.
So, is home appliance insurance worth it? Ultimately, the decision comes down to personal preference. If you’re the type of person who likes to have peace of mind knowing that your appliances are covered, then home appliance insurance may be a good choice for you. However, if you’re willing to take on the risk of repairs or replacements, you may not need this type of coverage. Carefully consider your needs and budget before making a decision.
Purchasing home appliance insurance can give you peace of mind in knowing that your appliances are covered in case something goes wrong. However, there are also some potential drawbacks to consider before making a decision. These can include the potential for fraud, deductibles, and the fact that not everything may be covered by the policy. Ultimately, the decision comes down to personal preference and your needs. Carefully consider all of the pros and cons before making a decision.
Within the home appliance insurance industry, First Premier Home Warranty offers some of the lowest-cost options without compromising quality comprehensive protection. For more than 30 years, our team of experts has been helping families resume their everyday lives as soon after an interruption as possible. Our skilled and certified specialists will quickly identify your problem and resolve it with minimal disruption to your routine. You can be confident that the systems that keep your family running are secure. Get a free home warranty quote from First Premier Home Warranty today!