Homeowners insurance exists to protect your home from all unpredictable dangers such as natural disasters, break-ins, and other accidents. Most homeowners insurance policies include a clause for personal property protection that covers appliances in the home. Most new appliances break down within the first 5 years of use, which is why you want to make sure they’re protected. If your appliance warranty does not cover a repair/replacement on the appliance, your last resort is insurance. Whether or not your home insurance will pay for an appliance depends on how the appliance was damaged. This guide will focus on appliances and when homeowners insurance can help.
Does homeowners insurance cover appliances? Yes, homeowners insurance covers appliances in the home as long as they were damaged by a covered peril in the policy. This includes natural accidents, theft, vandalism, and more. If the appliance broke down as a result of maintenance and wear and tear, insurance will not pay for it. There are special equipment breakdown policies available as an add-on on most HO-3 policies. The warranty on your appliance can also help get it fixed if it malfunctioned and it wasn’t your fault.
When Homeowners Insurance Covers Appliances
Most households in the United States have an HO-3 policy or HO-5 policy. These policies have similarly named perils that apply to appliances in the home such as the fridge, dishwasher, dryer, microwave, boiler, and more. Whether or not the insurance company will pay out for the appliance depends on how it broke down. The following are situations in which insurance companies will definitely pay out:
Acts Of God
The insurance company classifies natural disasters as “Acts of God” that are unpredictable. This includes natural disasters such as wildfires, hurricanes, hail storms, lightning strikes, sand storms, and others. If your appliance is damaged due to one of these natural disasters, it will be covered for a replacement. The only exceptions are earthquakes and floods. Certain high-risk states require special endorsements.
Storm Aftermath
Many times the real damage is done after the storm. The weight of ice and snow can collapse a roof. If your area received large snowfall over multiple days and it piled up on your roof, this could put serious strain on your roof and cause it to collapse. If any of your appliances are damaged like this, they will be covered.
The same applies to floods as a result of a storm. If there’s an accidental water discharge or a stream of water coming your way, this can lead to serious damage in the home. Most waterfront homes in coastal states are prone to this when there’s a storm and the sea levels rise.
Vandalism
If your home is intentionally vandalized and your appliances are damaged, you will be covered by homeowners insurance. Vandalism is common during break-ins because burglars vandalize property as they’re looking for valuables. The same applies if your home ends up damaged in a riot or a civil commotion.
Extreme Temperatures
Extreme temperatures such as freezing temperatures can have an impact on your appliances that is beyond your control. For instance, freezing temperatures can affect the water flow in your home and cause pipes to burst once they’re covered in ice. Extreme temperatures can also affect your HVAC system and sprinklers.
Explosions
Insurance will cover all damage caused by explosions. This doesn’t only refer to large violent explosions but smaller pipe explosions that are caused by internal and external forces and can lead to gas or water leaks. If explosions cause damage to your appliances, you will generally be covered.
When Homeowners Insurance Will NOT Cover Appliances
There are equally as many instances when homeowners insurance will not cover your appliances. The most common reason for rejection is a lack of maintenance and wear and tear. If your appliance malfunctioned due to age and maintenance issues, it’s on you to get it fixed because insurance only protects you against unpredictable events. An investigator will quickly find out if the appliance broke down as a result of a named peril or lack of maintenance.
Another reason why insurance companies reject appliance claims is avoidable accidents. For instance, if children put plastic in the oven then the damage won’t be covered. Minor cosmetic damage is usually not covered. If your appliances are only scuffed in a storm, you won’t be able to get a payout. Moreover, the deductible to file a claim on an appliance might cost more than the appliance itself. Make sure your deductible is lower than the cost of replacement if you want to file a claim.
Pro Tip: Check your manufacturer’s warranty to see if your product is still covered. If you have the coverage you won’t have to file a claim with the insurance company.
Why You Need Equipment Breakdown Coverage
Equipment breakdown coverage is an optional policy that can be added to your homeowners insurance for less than $50/year. This will provide an extra degree of protection for all appliances in the home and serve as a second warranty. This coverage extends to all appliances in the home from the dishwasher to the furnace, and it covers areas that standard homeowners insurance leaves out.
The following will be covered under equipment breakdown coverage:
- Mechanical breakdown. If the appliance breaks down to a centrifugal force or a pressure system, you will be covered. This is the most common reason why appliances fail aside from maintenance issues.
- Power surges. Electric power surges can damage dozens of appliances in the home simultaneously. An electric power surge can come during a storm and damage very expensive appliances in your household. Make sure to consult your agent to find out if you’re covered for power surges because they might require an additional rider.
Home Appliance Insurance
There is a way, however, to make sure your appliances are covered. With home appliance insurance, or a “home appliance warranty plan” the cost of appliance maintenance and replacement will be covered in many circumstances. This includes appliances like refrigerators, microwaves, and dishwashers. Most appliance insurance doesn’t cover what homeowners insurance does. It covers the wear and tear damage that comes with time and deterioration. Refrigerators are often included in these plans. Often, warranty plans may split the coverage between systems and appliances. Systems are what’s spread throughout the home like plumbing, where appliances are items like refrigerators. Appliances like refrigerators may be covered at a higher cost.
The cost of home appliance insurance can range between $400-$1100 per year. Keep in mind, the cost of a single refrigerator repair averages at around $500. This price point all depends on what is needed by the homeowner. The average cost, however, is $400-$550 per year. Sometimes, regardless of the damage or its cause, if an appliance breaks down and a contractor comes to fix it, you may have to pay a set service fee. Appliance insurance companies will work with the contractors directly. Those service fees usually are around the $50-$100 range.
It’s also important to note that many insurance companies will only cover items up to a certain price point. If you have a very pricy fridge with a high replacement cost or repair cost, you may not be fully covered. American Home Shield, for instance, will cover your refrigerator for up to 3,000 dollars of repair costs. Homeowners insurance does not cover these sorts of repairs for the most part. Prices can also vary depending on where you live. In Ohio, American Home Shield has a full coverage plan for $480. However, a homeowner in Westchester, N.Y, where appliances are more expensive and homes are older, may have to pay around $800 to $900.
Extended Warranty for Your Appliances
Often, if you buy an appliance like a refrigerator at stores like Best Buy or Sears, you can get it with a warranty plan. These plans and home warranty plans are different. The most notable difference between these plans is that purchasing a warranty plan at a store won’t cover any of your other appliances or anything else in your home. If you just need coverage for a refrigerator but don’t necessarily need a full-coverage plan of all your appliances, it’s a safe bet to look at warranty plans for individual items instead of predetermined packages.
It’s inevitable that at some point, your fridge or other appliances will need repair. This is especially true if you have older appliances. Taking proper maintenance steps with your appliances is valuable in reducing the number of repairs needed. Home appliance insurance makes sense for people who want the security of knowing that when things need fixing, they’ll be able to afford it. Before purchasing insurance, make sure to be exactly aware of what your plan covers. Some companies will refuse to cover the damages because it was clear that the appliances had poor maintenance by the homeowner.
Citations:
Consumer Reports. “What to Know About Buying a Home Warranty.” Consumer Reports, www.consumerreports.org/buying-a-home/what-to-know-about-buying-home-warranty/.
“How to Find The Best Home Appliance Insurance Policy.” Value Penguin, valuepenguin.com/home-insurance-appliances.
“What You Need to Know About Appliance Insurance.” The Home Service Club, 8 Oct. 2018, www.hscwarranty.com/blog/what-you-need-to-know-about-appliance-insurance/.
“When Does Homeowner’s Insurance Cover Appliances?” GETITC, www.getitc.com/syndicate/2018/03/20/when-does-home-insurance-cover-appliances.
