Homeowners insurance covers personal property — including your home appliances — if they’re damaged by a covered peril, like fire or lightning strikes. But homeowners insurance does not cover home appliances that are damaged due to electrical or mechanical breakdown and problems related to age or maintenance — like if your dishwasher breaks down after years of use. You may be able to add an equipment breakdown coverage endorsement to your policy to supplement that gap in coverage.
When does homeowners insurance cover appliances?
Homeowners insurance covers home appliances — like your oven and microwave, personal computer, and AC unit — if they are damaged by a peril outlined in your homeowners policy. That means if your washing machine was destroyed during a fire, your homeowners insurance personal property coverage can help pay to replace it. Built-in appliances — like a furnace or water heater — are covered by the dwelling coverage component of your homeowners policy if they’re damaged by a covered peril.
Homeowners insurance does cover your appliances from several causes of damage and loss, including:
Fire
Lightning strikes
Vandalism
Accidental discharge or overflow of water or steam (though not the damage to the appliance itself that produced the discharge)
Homeowners insurance also covers what is called sudden, accidental damage from artificially generated electrical currents, which is kind of a roundabout way of saying power surge. However, some insurance companies do not cover the loss of tubes, transistors, and other components that make electronics work, which would exclude most home appliances — like refrigerators and stoves — if they were to be damaged by an artificially generated current, like a power surge. Check with your insurer to see if they cover short-circuit damage.
What is equipment breakdown coverage?
Equipment breakdown coverage is an endorsement you can add to your homeowners insurance policy to enhance coverage for your appliances. Equipment breakdown coverage offers protection for a variety of appliances — from your TVs to your wine fridge to your dishwasher.
Equipment breakdown coverage can also protect your appliances if they are damaged or destroyed due to:
Mechanical breakdown, including rupture or bursting that’s caused by a centrifugal force
Pressure systems breakdown
Short-circuits
Improper installation
Power surge
How much does equipment breakdown coverage cost?
Equipment breakdown coverage offers a great amount of value and generally only costs around $25 to $50 a year. By adding equipment breakdown coverage to your home policy you could end up saving yourself tens of thousands of dollars in the event that you need your appliances replaced or repaired. Many insurance companies also offer high-efficiency replacements for appliances, like Energy Star water heaters, HVAC systems, and refrigerators if yours breaks down.
→ Learn more about equipment breakdown coverage
Are home warranties worth it for appliances?
Since homeowners insurance doesn’t cover the general breakdown of appliances, home warranties are meant to fill that gap. They’re basically service contracts that pay for the repairs or replacement of appliances, plumbing, and built-in appliances if they break down and go kaput.
Though a home warranty might sound enticing, you should be wary of the fine print. Here’s what you should keep in mind about home warranties.
Home warranties typically aren’t straightforward. Home warranty policies are particular about exactly which appliances they cover and under what circumstances. You should read the terms and conditions of your home warranty closely as certain items, like your refrigerator or furnace, may only be covered due to specific events.
There may be hidden fees. There may be hidden fees that you aren’t aware of if you didn’t read your warranty closely, like co-payments to a contractor or limits on how much your home warranty company will pay out for repairs, meaning you could be on the hook for any remaining balance. A standard warranty typically costs $250 to $500 and an enhanced warranty can be closer to $1,000 — so you’ll want to be wary of hidden fees on top of your annual costs.
Most new appliances come with their own product warranties already. Since most new appliances come with their own product warranties, it’s not always worth it to buy a home warranty.
All that said, if your insurance company does not sell equipment breakdown coverage, and your appliances don’t come with their own warranty, a home warranty may be an option to look into.
