Your home is outfitted with specialized equipment including your HVAC and electrical systems, water heater, kitchen appliances, washer and dryer, home security system, and personal computers. The average lifespan of appliances today is 10 to 15 years, but within the first five years, many appliances have an issue that requires repairing or replacing. Having equipment breakdown coverage can protect you from having to pay the repair or replacement costs in certain instances.
What’s Covered with Equipment Breakdown Coverage?
Equipment breakdown coverage is an endorsement that can be added to your homeowners insurance policy for an additional premium. It helps pay for repair or replacement costs for appliances, equipment, and systems that are damaged by electrical or mechanical failure. Your standard homeowners insurance policy covers appliances and systems in your home when they are damaged by covered peril, such as a fire or lightning, but it does not cover damage by electrical or mechanical failure. This is where equipment breakdown coverage comes in. Keep in mind that equipment breakdown coverage does not cover normal wear and tear, age, poor maintenance, rust, or mold.
How Much Does Equipment Breakdown Coverage Cost?
Equipment breakdown coverage costs $25 to $50 annually for a standard plan that provides $100,000 of coverage. This coverage typically has a deductible separate from your homeowners insurance policy’s deductible. You will need to pay the equipment breakdown coverage deductible before your insurance company covers any costs for repair or replacement.
How Is This Coverage Different Than a Home Warranty?
The cost of a home warranty is often more expensive than equipment breakdown coverage. In some cases, a home warranty may offer more coverage, but it can also be limited on the type of services covered and how much is covered. It’s important to remember that it is difficult to protect your home against all types of equipment damages and issues so evaluate what options are best for your needs.