A home appliance insurance policy, also known as a home warranty, is a type of insurance that covers the repair or replacement of home appliances. Home appliance insurance policies can be bought from either an insurance company or a home warranty company.
These policies usually cover major appliances such as refrigerators, ovens, and washing machines. Some policies go a step further and cover critical home systems such as plumbing, electrical, HVAC, and more. Home appliance insurance policies vary in terms of what they cover. Some policies only cover repairs, while others cover both repairs and replacements.
Home warranties have many advantages and are becoming more popular among homeowners. According to a study by Allied Market Research, the home warranty service market was worth $7.3 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 6.3 percent from 2021 through 2030.
In this article, we’ll discuss everything you need to know about home appliance insurance, including how it works, what it covers, whether it’s worth it, and what to look for in a great home appliance insurance policy.
How Home Appliance Insurance Works
Home appliance insurance policies vary, but most follow a similar model. When you purchase a policy, you pay an annual or monthly fee. In exchange for this fee, the home appliance insurance company agrees to cover the repair or replacement of your covered appliances.
Most policies have a deductible, which is the amount you have to pay out of pocket before the policy kicks in. For example, if your refrigerator breaks and it costs $500 to repair, but your deductible is $100, the home appliance insurance company will pay $400. It’s important to note that home appliance insurance policies only cover repairs or replacements. They do not cover the cost of regular maintenance, such as changing the air filter in your HVAC system.
Home appliance insurance policies also have a limit on how much they will pay out per appliance. For example, a policy might have a $500 limit for refrigerator repairs. This means that if the repair costs more than $500, you would have to pay the difference. Lastly, home appliance insurance policies usually have a waiting period. This is the amount of time you have to wait after buying the policy before it goes into effect. The waiting period is typically 30 days, but it can be longer for some policies.
Now that we’ve covered how home appliance insurance works, let’s take a look at what these policies cover.
What Home Appliance Insurance Covers
As we mentioned earlier, home appliance insurance policies vary in terms of what they cover. Some policies only cover major appliances, while others cover critical home systems as well. The most common appliances and systems that are covered by home appliance insurance policies include:
Home Appliances:
- Refrigerators
- Ovens
- Washing machines
- Dishwashers
- Dryers
- etc.
Home Systems:
- Plumbing
- Electrical
- HVAC
- etc.
Some home appliance insurance policies also cover additional items, such as pools, spas, and guest houses. However, these policies are less common and usually cost more. As you can see, there is a lot of variation in terms of what home appliance insurance policies cover. When shopping for a policy, it’s important to make sure that it covers the appliances and systems that are most important to you.
What Home Appliance Insurance Doesn’t Cover
In addition to understanding what home appliance insurance policies cover, it’s also important to know what they don’t cover. As we mentioned earlier, home appliance insurance policies do not cover the cost of regular maintenance, such as changing the air filter in your HVAC system.
Other home appliance insurance limitations include:
- Any structural problems, walls, foundations, flooring, or anything else.
- Any problems with corrosion, rust, or sediment.
- Solar systems and associated components (which are regarded as a part of the home’s structure).
- Any past repairs that aren’t covered by the house warranty are your responsibility.
- Any components not crucial for the function of the covered item (oven racks, remote controls, clocks, timers, etc.)
- Services that fix building and zoning code violations.
- The detection, identification, and removal of any hazardous substances from your home or office (mold, asbestos, radon gas, etc.)
Now that we’ve discussed what home appliance insurance covers and doesn’t cover, let’s take a look at whether these policies are worth it.
Are Home Appliance Insurance Policies Worth It?
Home appliance insurance policies have both advantages and disadvantages. These policies can be a great way to protect your budget from unexpected repairs, but they also have some downsides that you should be aware of.
Some of the advantages of home appliance insurance policies include:
- Peace of mind: Home appliance insurance can give you peace of mind knowing that you won’t have to pay for expensive repairs out of pocket.
- Save money: Home appliance insurance can save you money in the long run by protecting you from expensive repairs.
- Coverage: Home appliance insurance policies can cover a wide range of appliances and systems, giving you comprehensive protection.
- Flexibility: Home appliance insurance policies are typically very flexible, allowing you to choose the coverage that’s right for you.
- Convenience: Home appliance insurance policies can be a great way to save time and hassle by taking care of repairs for you.
- Great Addition To Homeowners Insurance: Home appliance insurance policies are a great addition to homeowner’s insurance, providing additional protection.
- Excellent Continuation of a Manufacturer’s Warranty: Home appliance insurance policies can be an excellent continuation of a manufacturer’s warranty, giving you extra protection.
- Increased Home Value: Home appliance insurance policies aren’t just for protecting your belongings–they can also raise the value of your home. If you have a policy that, say, covers big appliances, it’s something potential buyers will be interested in if you ever decide to sell.
- Affordable Home Appliance Insurance Coverage: Home appliance insurance protects your appliances in case of breakage or damage. It is often more affordable than you think, costing only a few extra dollars per month when added to your homeowner’s insurance policy.
Some of the disadvantages of home appliance insurance policies include:
- Cost: Home appliance insurance policies can be expensive, especially if you have a lot of appliances or systems that you want to insure.
- Exclusions: As we mentioned earlier, home appliance insurance policies have a lot of exclusions. This means that there are many things that these policies do not cover.
- Waiting period: Most home appliance insurance policies have a waiting period before they go into effect. This means that you may have to pay for repairs out of pocket during this time.
What Is The Best Home Appliance Insurance?
Now that we’ve looked at both the advantages and disadvantages of home appliance insurance policies, let’s take a look at what makes a great home appliance insurance policy. A great home appliance insurance policy should have the following features:
- Coverage: The policy should cover a wide range of appliances and systems. This will give you the most protection.
- Affordability: The policy should be affordable and provide good value for your money. This means that it should be priced reasonably and offer a good level of coverage.
- Flexibility: The policy should be flexible and allow you to customize your coverage. This will ensure that you’re only paying for the coverage that you need.
- Convenience: The policy should be convenient and easy to use. This means that it should be easy to file a claim and get repairs done.
- Exclusions: The policy should have few exclusions so that you are not left unprotected in the event of an unexpected repair.
- Waiting Period: The policy should have a short waiting period so that you can get coverage as soon as possible. When shopping for home appliance insurance, be sure to keep these features in mind.
- Great Customer Service: One of the most important things to look for in a home appliance insurance policy is great customer service. This means that the company should be easy to work with and quick to respond to claims.
A home appliance insurance policy is a great way to protect your appliances and save money in the long run. Be sure to keep the above features in mind when shopping for a policy so that you can find the best one for your needs.
Home Appliance Insurance Red Flags
In addition to the above features, there are a few red flags that you should be aware of when shopping for home appliance insurance. These red flags include:
- High Deductibles: A high deductible means that you will have to pay more out of pocket in the event of a claim. Be sure to check the deductibles on any policy that you’re considering so that you know how much you would have to pay.
- Exclusions: As we mentioned earlier, home appliance insurance policies have a lot of exclusions. This means that there are many things that these policies do not cover. Be sure to read the fine print on any policy that you’re considering so that you know what is and is not covered.
- Poor Customer Service: Poor customer service is a red flag because it means that the company may be difficult to work with in the event of a claim. Be sure to read reviews of any company that you’re considering so that you know what their customer service is like.
Conclusion
Home appliance insurance is a great way to protect your appliances and save money in the long run. Be sure to keep the above features in mind when shopping for a policy so that you can find the best one for your needs.
The First Premier Home Warranty was chosen among the Top 3 Best Home Warranty Companies in Investopedia’s 2022 list. First Premier Home Warranty covers numerous home appliances under repair and service options. To learn more about purchasing breakdown coverage for home equipment and reducing electricity expenses, contact us now or get a free quotation.
